Limitations On Liability Coverage Under Section 11

Law360, New York (September 8, 2008, 12:00 AM EDT) -- Several recent decisions, including a decision just last week by the United States Court of Appeals for the Eleventh Circuit, have held that a payment by an issuer to resolve liability under Section 11 of the Securities Act of 1933 is not a “loss” insured under a liability insurance policy.

Section 11 of the Securities Act of 1933 imposes liability for any misleading statement or omission of a material fact in a registration statement for a public offering of securities. Courts characterize Section 11 as imposing...
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