Statutory provision that imposes liability on any person who offers or sells a security for any untrue statement of material fact or omission of a material fact necessary in order to make the statements, in light of the circumstances under which they were made, not misleading. This section is like Rule 10b-5 in that it prohibits people from making untrue statements in order to sell securities, but it is stricter because the person making the untrue statement has to prove he or she didn’t know it was false.
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