Pennsylvania Statutes Title 70 P.S. Securities § 1-501. Civil liabilities

(a) Any person who:  (i) offers or sells a security in violation of section 407(c)   1 or at any time when such person has committed a material violation of section 301,  2 or any regulation relating to either section 301 or 407(c), or any order under this act of which he has notice;  or (ii) offers or sells a security in violation of sections 401, 403, 404   3 or otherwise by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, the purchaser not knowing of the untruth or omission, and who does not sustain the burden of proof that he did not know and in the exercise of reasonable care could not have known of the untruth or omission, shall be liable to the person purchasing the security from him, who may sue either at law or in equity to recover the consideration paid for the security, together with interest at the legal rate from the date of payment, less the amount of any income or distributions, in cash or in kind, received on the security, upon the tender of the security, or for damages if he no longer owns the security.  Damages are the amount that would be recoverable upon a tender less the value of the security when the purchaser disposed of it, plus interest at the legal rate from the date of disposition.  Tender shall require only notice of willingness to exchange the security for the amount specified.  Any notice may be given by service as in civil actions or by certified mail addressed to the last known address of the person liable.

(b) Any person who purchases a security in violation of sections 401, 403, 404 or otherwise by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading, shall be liable to the person selling the security to him, who may sue either at law or in equity to recover the security, plus any income or distributions, in cash or in kind, received by the purchaser thereon, upon tender of the consideration received, or for damages if the purchaser no longer owns the security.  Damages are the excess of the value of the security when the purchaser disposed of it, plus interest at the legal rate from the date of disposition, over the consideration paid for the security.  Tender requires only notice of willingness to pay the amount specified in exchange for the security.  Any notice may be given by service as in civil actions or by certified mail to the last known address of the person liable.

(c) Any person who wilfully participates in any act or transaction in violation of section 402   4 shall be liable to any other person who purchases or sells any security at a price which was affected by the act or transaction for the damages sustained as a result of such act or transaction.  Damages shall be the difference between the price at which the other person purchased or sold securities and the market value which the securities would have had at the time of his purchase or sale in the absence of the act or transaction, plus interest at the legal rate.

(d) Any investment adviser who violates section 405   5 shall be liable to the other party to the investment advisory contract for all fees paid under such contract to the investment adviser, less any profits earned by such party through transactions effected as a result of advice given under the contract, plus interest at the legal rate.  In addition, either party may, at any time, declare the contract null and void as of the date of such declaration.

(e) Any person who violates section 406   6 shall be liable to the person who purchases a security from him or sells a security to him in violation of section 406, for damages equal to the difference between the price at which such security was purchased or sold and the market value which such security would have had at the time of the purchase or sale if the information known to the defendant had been publicly disseminated prior to that time and a reasonable time had elapsed for the market to absorb the information, plus interest at the legal rate, unless the defendant proves that the plaintiff knew the information or that the plaintiff would have purchased or sold at the same price even if the information had been revealed to him.

(f) Any investment adviser who violates section 301   7 shall be liable to the client for all fees paid, directly or indirectly, to the investment adviser for investment advisory services during the period of such violation.

(g) Any person who violates section 404(a)(1) through (4)   8 or any material provision of section 404(a)(7) or otherwise makes any untrue statement of a material fact or omits stating a material fact necessary in order to make statements made, in the light of the circumstances under which they are made, not misleading (the person not knowing of the untruth or omission) and who does not sustain the burden of proof that he did not know and, in the exercise of reasonable care, could not have known of the untruth or omission, shall be liable to the person purchasing the security.  The person purchasing the security may sue either at law or in equity to recover the consideration paid for the security, together with interest at the legal rate from the date of payment, less the amount of income or distribution, in cash or in kind, received on the security, upon the tender of the security or for damages if the person no longer owns the security.  Damages are the amount that would be recoverable upon a tender, less the value of the security when the person disposed of it, plus interest at the legal rate from the date of disposition.  Tender shall require only notice of willingness to exchange the security for the amount specified.  Any notice may be given by service as in civil actions specified in the Pennsylvania Rules of Civil Procedure.  A person who is liable under this section and any offeror or seller of the security liable under subsection (a) are jointly and severally liable to the person purchasing the security.

1 70 P.S. § 1-407(c).
2 70 P.S. § 1-301.
3 70 P.S. §§ 1-401, 1-403 and 1-404.
4 70 P.S. § 1-402.
5 70 P.S. § 1-405.
6 70 P.S. § 1-406.
7 70 P.S. § 1-301.
8 70 P.S. § 1-404.

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