2006 Code of Virginia § 13.1-522 - Civil liabilities

13.1-522. Civil liabilities.

A. Any person who: (i) sells a security in violation of 13.1-502, 13.1-504A, 13.1-507 (i) or (ii), 13.1-510 (e) or (f), or (ii) sells a security bymeans of an untrue statement of a material fact or any omission to state amaterial fact necessary in order to make the statement made, in the light ofthe circumstances under which they were made, not misleading (the purchasernot knowing of such untruth or omission), and who shall not sustain theburden of proof that he did not know, and in the exercise of reasonable carecould not have known, of such untruth or omission, shall be liable to theperson purchasing such security from him who may sue either at law or inequity to recover the consideration paid for such security, together withinterest thereon at the annual rate of six percent, costs, and reasonableattorneys' fees, less the amount of any income received on the security, uponthe tender of such security, or for the substantial equivalent in damages ifhe no longer owns the security.

B. Any person who (i) engages in the business of advising others, forcompensation, either directly or through publications or writings, as to thevalue of securities or as to the advisability of investing in, purchasing, orselling securities, or who, for compensation and as a part of a regularbusiness, issues or promulgates analyses or reports concerning securities inwillful and material violation of 13.1-503, subsection A of 13.1-504, orof any rule or order under 13.1-505.1, or (ii) receives, directly orindirectly, any consideration from another person for advice as to the valueof securities or their purchase or sale, whether through the issuance ofanalyses, reports or otherwise and employs any device, scheme, or artifice todefraud such other person or engages in any act, practice or course ofbusiness which operates or would operate as a fraud or deceit on such otherperson, shall be liable to that person who may sue either at law or in equityto recover the consideration paid for such advice and any loss due to suchadvice, together with interest thereon at the annual rate of six percent fromthe date of payment of the consideration plus costs and reasonable attorney'sfees, less the amount of any income received from such advice and any othereconomic advantage.

C. Every person who directly or indirectly controls a person liable undersubsection A or B of this section, including every partner, officer, ordirector of such a person, every person occupying a similar status orperforming similar functions, every employee of such a person who materiallyaids in the conduct giving rise to the liability, and every broker-dealer,investment advisor, investment advisor representative or agent who materiallyaids in such conduct shall be liable jointly and severally with and to thesame extent as such person, unless able to sustain the burden of proof thathe did not know, and in the exercise of reasonable care could not have known,of the existence of the facts by reason of which the liability is alleged toexist. There shall be contribution as in cases of contract among the severalpersons so liable.

D. No suit shall be maintained to enforce any liability created under thissection unless brought within two years after the transaction upon which itis based; provided, that, if any person liable by reason of subsection A, Bor C of this section makes a written offer, before suit is brought, to refundthe consideration paid and any loss due to any investment advice provided bysuch person, together with interest thereon at the annual rate of sixpercent, less the amount of any income received on the security or resultingfrom such advice, or to pay damages if the purchaser no longer owns thesecurity, no purchaser or user of the investment advisory service shallmaintain a suit under this section who has refused or failed to accept suchoffer within thirty days of its receipt.

E. Any tender specified in this section may be made at any time before entryof judgment.

F. Any condition, stipulation or provision binding any person acquiring anysecurity or receiving any investment advice to waive compliance with anyprovision of this chapter or of any rule or order thereunder shall be void.

G. The rights and remedies provided by this chapter shall be in addition toany and all other rights and remedies that may exist at law or in equity.

(Code 1950, 13-150; 1956, c. 428; 1987, c. 678; 1997, c. 279.)

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