§11709. Liability for issuance of securities by certain carriers
A carrier issuing a security or assuming an obligation or liability that is void under section 11301 of this title and its directors, officers, attorneys, and other agents who participate in authorizing, issuing, hypothecating, or selling that security, or in authorizing the assumption of that obligation or liability, are jointly and severally liable for the damages sustained by a person who acquires for value, in good faith, and without notice that the issue or assumption is void (1) that security, or (2) a security under which an assumption or liability is void. If a security void under that section is acquired directly from the carrier issuing it, the holder may rescind the transaction and recover the consideration given for the security when it is surrendered to that carrier.
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| Revised Section | Source (U.S. Code) | Source (Statutes at Large) |
|---|---|---|
| 11709 | 49:20a(11) (2d and 3d sentences). | Feb. 4, 1887, ch. 104, |
The words "is void under section 11301 of this title" are substituted for "so made void" for clarity. The words "A carrier issuing . . . and its directors . . . who participate . . . are jointly and severally liable" are substituted for "may . . . hold jointly and severally liable . . . the carrier which issued . . . and its directors" for clarity. The words "full amount" are omitted as surplus. The words "such person may in a suit or action in any court of competent jurisdiction" are omitted as surplus in view of sections 1336 and 1337 of title 28. The words "If a security void under that section" are substituted for "In case any security so made void" for clarity. The words "to that carrier" are added for clarity.
Section Referred to in Other Sections
This section is referred to in section 11348 of this title.