The Securities Act has the following liability provisions:
Section 11(a) imposes liability “in case any part of the registration statement, when such part became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading.” It allows buyers to sue the parties responsible for preparing the registration statement (essentially, the issuer, the officers signing the registration statement, the directors of the issuer, underwriters, auditors and other experts (this would include credit rating agencies whose ratings are included in the registration statement for offerings of debt securities)) for losses sustained as a result of material misstatements or omissions in the registration statement. Because Section 11 imposes liability in connection with use of a registration statement, it is not applicable to exempt or private offerings.
Section 17(a)(2) prohibits any person involved in the offer or sale of a security from using material misstatements or omissions to obtain money or property. Essentially, this section prohibits fraud in the offer or sale of securities.