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Rule 159: Information Available to Purchaser at Time of Contract of Sale
Rule 159 applies to investors relying on Section 12(a)(2), (a section dealing with civil liability in connection with untrue statements made on prospectuses). If investors purchase securities from a company that provided accurate information on its prospectus at the time of contract of sale, information given to the investor after the time of contract will not be applicable to fraudulent prospectus claims. Section 12(a)(2) applies to incorrect or misleading information at the time of the contract of sale. Likewise, Rule 159 has the same application to Section 17(a)(2), which prevents companies engaging in interstate transactions to provide investors with untrue or misleading statements meant to deceive or defraud. As with Section 12(a)(2), if correct information is provided at the time of a contract of sale, additional information after the sale will not be taken into account in relation to the original information. |
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