Delaware Code Title 6 Sec. 73-605 – Civil liabilities
(a) Any person who:
(1) Offers or sells a security in violation of § 73-302, § 73-301 or § 73-210(b) of this title, or of any rule or order under § 73-211 of this title which requires the affirmative approval of sales literature before it is used, or of any condition imposed under § 73-204(d) of this title.
(2) Offers, sells or purchases a security by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statement made, in the light of the circumstances under which they are made, not misleading (the buyer or seller not knowing of the untruth or omission), and who does not sustain the burden of proof that the person did not know, and in the exercise of reasonable care could not have known of the untruth or omission, is liable to the person buying or selling the security from or to him or her, who may sue either at law or in equity to recover the consideration paid for the security, together with the interest at the legal rate from the date of payment costs, and reasonable attorneys’ fees, less the amount of any income received on the security, upon the tender of the security, or for damages if he or she no longer owns the security.
Terms Used In Delaware Code Title 6 Sec. 73-605
- Agent: means any individual, other than a broker-dealer, who represents a broker-dealer or issuer in effecting or attempting to effect purchases or sales of securities. See Delaware Code Title 6 Sec. 73-103
- Broker-dealer: means any person engaged in the business of effecting transactions in securities for the account of others or for the broker-dealer's own account. See Delaware Code Title 6 Sec. 73-103
- Contract: A legal written agreement that becomes binding when signed.
- Contribution: means any cash, property, services rendered or a promissory note or other obligation to contribute cash or property or to perform services, which a partner contributes to a limited partnership in the capacity as a partner. See Delaware Code Title 6 Sec. 17-101
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Defendant: In a civil suit, the person complained against; in a criminal case, the person accused of the crime.
- Director: means the Investor Protection Director, the principal executive officer of the Investor Protection Unit designated in § 73-102 of this title. See Delaware Code Title 6 Sec. 73-103
- Knowledge: means a person's actual knowledge of a fact, rather than the person's constructive knowledge of the fact. See Delaware Code Title 6 Sec. 17-101
- Partner: means a limited or general partner. See Delaware Code Title 6 Sec. 17-101
- Person: means an individual, a corporation, a partnership, an association, a joint stock company, a trust where the interests of the beneficiaries are evidenced by a security, an unincorporated organization, a government, or a political subdivision of a government. See Delaware Code Title 6 Sec. 73-103
- Plaintiff: The person who files the complaint in a civil lawsuit.
- Security: means any note; stock; treasury stock; bond; debenture; evidence of indebtedness; certificate of interest or participation in any profit-sharing agreement; collateral-trust certificate; preorganization certificate or subscription; transferable share; investment contract, including pyramid promotion which includes any plan or operation for the sale or distribution of property, services, or any other thing of value wherein a person for a consideration is offered an opportunity to obtain a benefit which is based in whole or in part on the inducement, by himself or herself or by others, of additional persons to purchase the same or a similar opportunity; voting-trust certificate; certificate of deposit for a security; certificate of interest of participation in an oil, gas or mining title or lease or in payments out of production under such a title or lease; options on commodities; viatical settlement investment; or, in general, any interest or instrument commonly known as a "security" or any certificate of interest or participation in, temporary or interim certificate, for, receipt for guarantee of, or warrant or right to subscribe to or purchase, any of the aforegoing. See Delaware Code Title 6 Sec. 73-103
- State: means the District of Columbia or the Commonwealth of Puerto Rico or any state, territory, possession, or other jurisdiction of the United States other than the State of Delaware. See Delaware Code Title 6 Sec. 17-101
(b) Every person who directly or indirectly controls a seller or buyer liable under subsection (a) of this section, every partner, officer, or director of such a seller or buyer, every person occupying a similar status or performing similar functions, every employee of such seller or buyer who materially aids in the sale, and every broker-dealer or agent who materially aids in the sale or purchase are also liable jointly and severally with and to the same extent as the seller or buyer, unless the nonseller or nonbuyer who is so liable sustains the burden of proof that the person did not know, and in exercise of reasonable care could not have known, of the existence of the facts by reason of which the liability is alleged to exist. There is contribution as in cases of contract among the several persons so liable.
(c) Any tender specified in this section may be made at any time before entry of judgment.
(d) Every cause of action under this chapter survives the death of any person who might have been a plaintiff or defendant.
(e) No person may sue under this section more than 3 years after the contract of sale. No person may sue under this section if the buyer received a written offer, before suit and at a time when the buyer owned the security, or if a seller received a written offer before suit, to refund the consideration paid together with interest at the legal rate from the date of payment, less the amount of any income received on the security, and the seller failed to accept the offer within 30 days of its receipt, or if the buyer received such an offer before suit and at a time when the buyer did not own the security, unless the buyer rejected the offer in writing within 30 days of its receipt.
(f) No person who has made or engaged in the performance of any contract in violation of any provision of this chapter or any rule or order hereunder, or who has acquired any purported right under any such contract with knowledge of the facts by reason of which its making or performance was in violation may base any suit on the contract.
(g) Any condition, stipulation, or provision binding any person acquiring any security to waive compliance with any provision of this chapter or any rule or order hereunder is void.
(h) The rights and remedies provided by this chapter are in addition to any other rights or remedies that may exist at law or in equity.
6 Del. C. 1953, § ?7323; 59 Del. Laws, c. 208, § ?1; 68 Del. Laws, c. 181, §§ ?13, 22; 70 Del. Laws, c. 186, § ?1; 70 Del. Laws, c. 560, § ?1; 71 Del. Laws, c. 162, § ?25; 78 Del. Laws, c. 175, §§ ?75, 107 118;