Civil Liability Section 11 Liability Book Notes A.

A. Standing: Section 11 targets misstatements in the registration statement so courts have interpreted Section 11 as imposing a stringent tracing requirement. Plaintiffs seeking to bring a 11 claim must show that the specific shares they purchased were sold as part of the public offering under the registration statement that contained the alleged misstatement. Krim v. PcOrder.com o Section 11 provides a right of action to any person acquiring shares issued pursuant to an untrue registration statement. o Section 11s standing provisions limit putative plaintiffs to the narrow class of persons consisting of those who purchase securities that are the direct subject of the prospectus and registration statement. Traceability Standard o The traceability requirement is satisfied, as a matter of logic, when stock has only entered the market via a single offering Section 11 is available for anyone who purchased directly in the offering and any aftermarket purchasers who can demonstrate that their shares are traceable to the registration statement in question. Ruling: Aftermarket purchasers seeking Section 11 standing must demonstrate that their shares are traceable to the challenged registration statement. Class Notes: You have to show under Section 11 as a purchaser victim: o There is a material misrepresentation or omission in the registration statement. o