[§485A-509]  Civil liability.  (a) 

Enforcement of civil liability under this section shall be subject to the

Securities Litigation Uniform Standards Act of 1998.

     (b)  A person is liable to the purchaser if the

person sells a security in violation of section 485A-301 or, by means of an

untrue statement of a material fact or an omission of a material fact necessary

to make the statement made, in light of the circumstances under which it is

made, not misleading, the purchaser not knowing the untruth or omission and the

seller not sustaining the burden of proof that the seller did not know and, in

the exercise of reasonable care, could not have known of the untruth or

omission.  An action under this subsection shall be governed by the following:

     (1)  The purchaser may maintain an action to recover

the consideration paid for the security, less the amount of any income received

on the security, and interest at the legal rate of interest, from the date of

the purchase, costs, and reasonable attorney's fees determined by the court,

upon the tender of the security, or for actual damages as provided in paragraph

(3);

     (2)  The tender referred to in paragraph (1) may be

made any time before entry of judgment.  Tender requires only notice in a

record of ownership of the security and willingness to exchange the security

for the amount specified.  A purchaser that no longer owns the security may

recover actual damages as provided in paragraph (3); and

     (3)  Actual damages in an action arising under this

subsection are the amount that would be recoverable upon a tender less the

value of the security when the purchaser disposed of it, and interest at the

legal rate of interest, from the date of the purchase, costs, and reasonable

attorney's fees determined by the court.

     (c)  A person shall be liable to the seller if

the person buys a security by means of an untrue statement of a material fact

or omission of a material fact necessary to make the statement made, in light

of the circumstances under which it is made, not misleading, the seller not

knowing of the untruth or omission, and the purchaser not sustaining the burden

of proof that the purchaser did not know, and in the exercise of reasonable

care, could not have known of the untruth or omission.  An action under this

subsection shall be governed by the following:

     (1)  The seller may maintain an action to recover the

security, and any income received on the security, costs, and reasonable

attorney's fees determined by the court, upon the tender of the purchase price,

or for actual damages as provided in paragraph (3);

     (2)  The tender referred to in paragraph (1) may be

made any time before entry of judgment.  Tender requires only notice in a

record of the present ability to pay the amount tendered and willingness to

take delivery of the security for the amount specified.  If the purchaser no

longer owns the security, the seller may recover actual damages as provided in

paragraph (3); and

     (3)  Actual damages in an action arising under this

subsection are the difference between the price at which the security was sold

and the value the security would have had at the time of the sale in the

absence of the purchaser's conduct causing liability, and interest at the legal

rate of interest, from the date of the sale of the security, costs, and

reasonable attorney's fees determined by the court.

     (d)  A person acting as a broker-dealer or

agent that sells or buys a security in violation of section 485A-401(a),

485A-402(a), or 485A-506 shall be liable to the customer.  The customer, if a

purchaser, may maintain an action for recovery of actual damages as specified

in subsection (b), or, if a seller, for a remedy as specified in subsection

(c).

     (e)  A person acting as an investment adviser

or investment adviser representative that provides investment advice for

compensation in violation of section 485A-403(a), 485A-404(a), or 485A-506

shall be liable to the client.  The client may maintain an action to recover

the consideration paid for the advice, interest at the legal rate of interest,

from the date of payment, costs, and reasonable attorney's fees determined by

the court.

     (f)  A person that receives directly or

indirectly any consideration for providing investment advice to another person

and that employs a device, scheme, or artifice to defraud the other person or

engages in an act, practice, or course of business that operates or would

operate as a fraud or deceit on the other person, shall be liable to the other

person.  An action under this subsection shall be governed by the following:

     (1)  The person defrauded may maintain an action to

recover the consideration paid for the advice and the amount of any actual

damages caused by the fraudulent conduct, interest at the legal rate of

interest from the date of the fraudulent conduct, costs, and reasonable

attorney's fees determined by the court, less the amount of any income received

as a result of the fraudulent conduct; and

     (2)  This subsection shall not apply to a

broker-dealer or its agents if the investment advice provided is solely incidental

to transacting business as a broker-dealer and no special compensation is

received for the investment advice.

     (g)  The following persons are liable jointly

and severally with and to the same extent as persons liable under subsections

(b) to (f):

     (1)  A person that directly or indirectly controls a

person liable under subsections (b) to (f), unless the controlling person

sustains the burden of proof that the person did not know, and in the exercise

of reasonable care could not have known, of the existence of conduct by reason

of which the liability is alleged to exist;

     (2)  An individual who is a managing partner,

executive officer, or director of a person liable under subsections (b) to (f),

including an individual having a similar status or performing similar

functions, unless the individual sustains the burden of proof that the

individual did not know and, in the exercise of reasonable care could not have

known, of the existence of conduct by reason of which the liability is alleged

to exist;

     (3)  An individual who is an employee of or associated

with a person liable under subsections (b) to (f) and who materially aids the

conduct giving rise to the liability, unless the individual sustains the burden

of proof that the individual did not know and, in the exercise of reasonable

care could not have known, of the existence of conduct by reason of which the

liability is alleged to exist; and

     (4)  A person that is a broker-dealer, agent,

investment adviser, or investment adviser representative that materially aids

the conduct giving rise to the liability under subsections (b) to (f), unless

the person sustains the burden of proof that the person did not know and, in

the exercise of reasonable care could not have known, of the existence of

conduct by reason of which liability is alleged to exist.

     (h)  Person liable under this section has a

right of contribution as in cases of contract against any other person liable

under this section for the same conduct.

     (i)  A cause of action under this section survives

the death of an individual who might have been a plaintiff or defendant.

     (j)  A person may not obtain relief:

     (1)  Under subsection (b) for violation of section

485A-301, or under subsection (d) or (e), unless the action is instituted

within one year after the violation occurred; or

     (2)  Under subsection (b), other than for violation of

section 485A-301, or under subsection (c) or (f), unless the action is

instituted within the earlier of two years after discovery of the facts

constituting the violation or five years after the violation.

     (k)  A person that has made, or has engaged in

the performance of, a contract in violation of this chapter or a rule adopted

or order issued under this chapter, or that has acquired a purported right

under the contract with knowledge of conduct by reason of which its making or

performance was in violation of this chapter, may not base an action on the

contract.

     (l)  A condition, stipulation, or provision

binding a person purchasing or selling a security or receiving investment

advice to waive compliance with this chapter or a rule adopted or order issued

under this chapter is void.

     (m)  The rights and remedies provided by this

chapter are in addition to any other rights or remedies that may exist. [L

2006, c 229, pt of §1]