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Title 15, Commerce and TradeRelease 119-102

§77www Liability for Misleading Statements

Title 15 › CHAPTER 2A — SECURITIES AND TRUST INDENTURES › SUBCHAPTER III — TRUST INDENTURES › § 77www

Last updated Aug 21, 2026|Official source

Summary

Holds people who file reports or documents with the Commission responsible when those papers contain false or misleading statements about important facts or leave out important facts. Anyone who did not know the statement was false and who relied on it to buy or sell the related security can sue for the losses caused by that reliance. The person sued can avoid liability by proving they acted in good faith and did not know the statement was false or missing. A court can hear the case, require a cost bond, and award reasonable costs and lawyers’ fees to either side based on the merits. Suits must be started within one year after the wrong was discovered and no later than three years after the claim first arose. These remedies are in addition to other legal rights under the securities laws, but a person cannot recover more than their actual damages, even across multiple lawsuits.

Full Legal Text

Title 15, §77www

Commerce and Trade, Source: USLM XML via OLRC

(a)Any person who shall make or cause to be made any statement in any application, report, or document filed with the Commission pursuant to any provisions of this subchapter, or any rule, regulation, or order thereunder, which statement was at the time and in the light of the circumstances under which it was made false or misleading with respect to any material fact, or who shall omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, shall be liable to any person (not knowing that such statement was false or misleading or of such omission) who, in reliance upon such statement or omission, shall have purchased or sold a security issued under the indenture to which such application, report, or document relates, for damages caused by such reliance, unless the person sued shall prove that he acted in good faith and had no knowledge that such statement was false or misleading or of such omission. A person seeking to enforce such liability may sue at law or in equity in any court of competent jurisdiction. In any such suit the court may, in its discretion, require an undertaking for the payment of the costs of such suit and assess reasonable costs, including reasonable attorneys’ fees, against either party litigant, having due regard to the merits and good faith of the suit or defense. No action shall be maintained to enforce any liability created under this section unless brought within one year after the discovery of the facts constituting the cause of action and within three years after such cause of action accrued.
(b)The rights and remedies provided by this subchapter shall be in addition to any and all other rights and remedies that may exist under the Securities Act of 1933 [15 U.S.C. 77a et seq.] or the Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.], or otherwise at law or in equity; but no person permitted to maintain a suit for damages under the provisions of this subchapter shall recover, through satisfaction of judgment in one or more actions, a total amount in excess of his actual damages on account of the act complained of.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

References in Text

The Securities Act of 1933, referred to in subsec. (b), is act
May 27, 1933, ch. 38, title I, 48 Stat. 74, which is classified generally to subchapter I (§ 77a et seq.) of this chapter. For complete classification of this Act to the Code, see section 77a of this title and Tables. The Securities Exchange Act of 1934, referred to in subsec. (b), is act
June 6, 1934, ch. 404, 48 Stat. 881, which is classified principally to chapter 2B (§ 78a et seq.) of this title. For complete classification of this Act to the Code, see section 78a of this title and Tables.

Amendments

2010—Subsec. (b). Pub. L. 111–203 substituted “Securities Act of 1933 or the Securities Exchange Act of 1934” for “Securities Act of 1933, or the Securities Exchange Act of 1934, or the Public Utility Holding Company Act of 1935”.

Statutory Notes and Related Subsidiaries

Effective Date

of 2010 AmendmentAmendment by Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an

Effective Date

note under section 5301 of Title 12, Banks and Banking.

Executive Documents

Transfer of Functions

For

Transfer of Functions

of Securities and Exchange Commission, with certain exceptions, to Chairman of such Commission, see Reorg. Plan No. 10 of 1950, §§ 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat. 1265, set out under section 78d of this title.

Reference

Citations & Metadata

Citation

15 U.S.C. § 77www

Title 15, Commerce and Trade

Last Updated

Aug 21, 2026

Release point: 119-102