Explain the remedies that are available to an investor who has been indiced to take shares by false statements made in a prospectus
ANSWER
The remedies available to a subscriber include:
• Compensation for any loss or damage occasioned by the untrue statements
• Damages for loss or liability arising. This remedy is available to the investor in the false statements were negligently or fraudulently misrepresented.
• Rescission of contract: The innocent party has the right to rescind thecontract if the false statements were innocently, fraudulently or negligently made. The right is exercisable at the earliest possible instance.
• Damages against the company for breach of contract.
• Indemnity: This remedy which entails monetary compensation is available ifthe false statements were innocently made. However, it is only available where the innocent misrepresentation occasion direct financial loss.