What rights do investors have for misrepresentations made in a prospectus?
If a registered public fund publishes a prospectus or any amendment to it that contains misrepresentations relating to any disclosures required under the ACT, a person who purchased any shares pursuant to the prospectus or amendment to it, is deemed to have relied on the misrepresentation and shall have specific rights. These include rescission for the purchase or damages against the fund. However, no person is liable if he/she proves that the purchaser bought the shares offered by the prospectus or amendment to it with knowledge of the misrepresentation.
