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Choice of Law |
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Civil liability |
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Washington Securities Act and
the Uniform Securities Act of 2002; Debenture Company Act modifications
2006 |
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No scienter, seller is
fiduciary, jury instructions. Shermer v Baker 1970 |
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Securities Act applies to
face-to-face business transactions involving the sale of stock of
private corporations. Clausing v DeHart (1973) |
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Supreme Court eliminates privity
and adopts "substantial contributing factor" test for seller liability.
Haberman v WPPSS 1987 |
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Supreme Court finds possible
fraud, negligent misrepresentation and securities violations by State of
Washington even though bond issuance was ultra vires. Hoffer v
State of Washington 1988. |
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Supreme Court refuses to
reconsider the "substantial contributing factor: test for "seller" even
though the US Supreme Court in Pinter followed the privity test.
Hoffer v State of Washington 1989 |
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Lawyers not substantially
contributing factor, business judgment rule not due diligence, reliance
on counsel no defense. Hines v Data Lines 1990 |
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Security seller a fiduciary,
discovery rule, apparent authority, definition of security. Douglass v. Stanger
2000 |
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Participant liability as employee of seller, broker-dealer and sales
person |
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Seller liability |
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Purpose is investor protection |
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No equitable estoppel or laches defense under Washington Securities Act.
G2Net v Freeyellow 2005 |
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Reasonable reliance added, subscription agreements disclaimers upheld,
Stewart v Steiner 2004 |
