Vermont § 5509 - Civil liability

§ 5509. Civil liability

• (a) Enforcement of civil liability under this section is subject to the Securities Litigation
  Uniform Standards Act of 1998. (b) A person is liable to the purchaser if the person sells a security in violation of
  sections 5301, 5501, or 5502 of this chapter, the purchaser not knowing the untruth
  or omission or deceptive nature of the conduct and the seller not sustaining the burden
  of proof that the seller did not know and, in the exercise of reasonable care, could
  not have known of the untruth or omission or deceptive nature of the conduct. An action
  under this subsection is governed by the following: (1) The purchaser may maintain an action to recover the consideration paid for the security,
  less the amount of any income received on the security, and interest at the legal
  rate of interest from the date of the purchase, costs, and reasonable attorney’s fees
  determined by the court, upon the tender of the security, or for actual damages as
  provided in subdivision (3) of this subsection. (2) The tender referred to in subdivision (1) of this subsection may be made any time
  before entry of judgment. Tender requires only notice in a record of ownership of
  the security and willingness to exchange the security for the amount specified. A
  purchaser that no longer owns the security may recover actual damages as provided
  in subdivision (3) of this subsection. (3) Actual damages in an action arising under this subsection are the amount that would
  be recoverable upon a tender less the value of the security when the purchaser disposed
  of it, and interest at the legal rate of interest from the date of the purchase, costs,
  and reasonable attorney’s fees determined by the court. (c) A person is liable to the seller if the person buys a security in violation of section
  5501 or 5502 of this chapter, the seller not knowing of the untruth or omission or
  deceptive nature of the conduct, and the purchaser not sustaining the burden of proof
  that the purchaser did not know, and in the exercise of reasonable care could not
  have known, of the untruth or omission or deceptive nature of the conduct. An action
  under this subsection is governed by the following: (1) The seller may maintain an action to recover the security, and any income received
  on the security, costs, and reasonable attorney’s fees determined by the court, upon
  the tender of the purchase price, or for actual damages as provided in subdivision
  (3) of this subsection. (2) The tender referred to in subdivision (1) of this subsection may be made any time
  before entry of judgment. Tender requires only notice in a record of the present ability
  to pay the amount tendered and willingness to take delivery of the security for the
  amount specified. If the purchaser no longer owns the security, the seller may recover
  actual damages as provided in subdivision (3) of this subsection. (3) Actual damages in an action arising under this subsection are the difference between
  the price at which the security was sold and the value the security would have had
  at the time of the sale in the absence of the purchaser’s conduct causing liability,
  the interest at the legal rate of interest from the date of the sale of the security,
  the costs, and the reasonable attorney’s fees determined by the court. (d) A person acting as a broker-dealer or agent that sells or buys a security in violation
  of subsection 5401(a) or 5402(a) or section 5506 of this chapter is liable to the
  customer. The customer, if a purchaser, may maintain an action for recovery of actual
  damages as specified in subdivisions (b)(1) through (3) of this section, or, if a
  seller, for a remedy as specified in subdivisions (c)(1) through (3) of this section. (e) A person acting as an investment adviser or investment adviser representative that
  provides investment advice for compensation in violation of subsection 5403(a) or
  5404(a) or section 5506 of this chapter is liable to the client. The client may maintain
  an action to recover the consideration paid for the advice, interest at the legal
  rate of interest from the date of payment, costs, and reasonable attorney’s fees determined
  by the court. (f) A person that receives directly or indirectly any consideration for providing investment
  advice to another person and that employs a device, scheme, or artifice to defraud
  the other person or engages in an act, practice, or course of business that operates
  or would operate as a fraud or deceit on the other person or otherwise violates section
  5502 of this chapter is liable to the other person. An action under this subsection
  is governed by the following: (1) The person wronged may maintain an action to recover the consideration paid for the
  advice and the amount of any actual damages caused by the fraudulent conduct, interest
  at the legal rate of interest from the date of the fraudulent conduct, costs, and
  reasonable attorney’s fees determined by the court, less the amount of any income
  received as a result of the fraudulent conduct. (2) This subsection does not apply to a broker-dealer or its agents if the investment
  advice provided is solely incidental to transacting business as a broker-dealer and
  no special compensation is received for the investment advice. (g) The following persons are liable jointly and severally with and to the same extent
  as persons liable under subsections (b) through (f) of this section: (1) a person that directly or indirectly controls a person liable under subsections (b)
  through (f) of this section, unless the controlling person sustains the burden of
  proof that the person did not know, and in the exercise of reasonable care could not
  have known, of the existence of conduct by reason of which the liability is alleged
  to exist; (2) an individual who is a managing partner, executive officer, or director of a person
  liable under subsections (b) through (f) of this section, including an individual
  having a similar status or performing similar functions, unless the individual sustains
  the burden of proof that the individual did not know and, in the exercise of reasonable
  care could not have known, of the existence of conduct by reason of which the liability
  is alleged to exist; (3) an individual who is an employee of or associated with a person liable under subsections
  (b) through (f) of this section and who materially aids the conduct giving rise to
  the liability, unless the individual sustains the burden of proof that the individual
  did not know and, in the exercise of reasonable care could not have known, of the
  existence of conduct by reason of which the liability is alleged to exist; and (4) a person that is a broker-dealer, agent, investment adviser, or investment adviser
  representative that materially aids the conduct giving rise to the liability under
  subsections (b) through (f) of this section, unless the person sustains the burden
  of proof that the person did not know and, in the exercise of reasonable care could
  not have known, of the existence of conduct by reason of which liability is alleged
  to exist. (h) A person liable under this section has a right of contribution as in cases of contract
  against any other person liable under this section for the same conduct. (i) A cause of action under this section survives the death of an individual who might
  have been a plaintiff or defendant. (j) A person may not obtain relief: (1) under subsection (b) of this section for violation of section 5301 of this chapter,
  or under subsection (d) or (e) of this section, unless the action is instituted within
  one year after the violation occurred; or (2) under subsection (b) of this section, other than for violation of section 5301 of
  this chapter, or under subsection (c) or (f) of this section, unless the action is
  instituted within the earlier of two years after discovery of the facts constituting
  the violation or five years after the violation. (k) A person that has made, or has engaged in the performance of, a contract in violation
  of this chapter or a rule adopted or order issued under this chapter, or that has
  acquired a purported right under the contract with knowledge of conduct by reason
  of which its making or performance was in violation of this chapter, may not base
  an action on the contract. (l) A condition, stipulation, or provision binding a person purchasing or selling a security
  or receiving investment advice to waive compliance with this chapter or a rule adopted
  or order issued under this chapter is void. (m) The rights and remedies provided by this chapter are in addition to any other rights
  or remedies that may exist, but this chapter does not create a cause of action not
  specified in this section or subsection 5411(e) of this chapter. (Added 2005, No. 11, § 1, eff. July 1, 2006.)