2000 Minnesota Statutes

     80A.23 Civil liabilities. 

    Subdivision 1.  Any person who sells a security in 
 violation of sections 80A.08 or 80A.18, or of any condition 
 imposed under section 80A.11, subdivision 4, or 80A.12, 
 subdivisions 5 and 6, is liable to the person purchasing the 
 security, who may sue either in equity for rescission upon 
 tender of the security or at law for damages if that person no 
 longer owns the security.  In any action for rescission, the 
 purchaser shall be entitled to recover the consideration paid 
 for the security together with interest at the legal rate, 
 costs, and reasonable attorney's fees, less the amount of any 
 income received on the securities.  In an action at law, damages 
 shall be the consideration paid for the security together with 
 interest at the legal rate to the date of disposition, costs, 
 and reasonable attorney's fees, less the value of the security 
 at the date of disposition.  

    Subd. 2.  Any person who violates section 80A.01 in 
 connection with the purchase or sale of any security shall be 
 liable to any person damaged thereby who sold such security to 
 that person or to whom that person sold such security, and any 
 person who violates section 80A.03 in connection with the 
 purchase or sale of any security shall be liable to any person 
 damaged by the conduct prescribed by section 80A.03.  Any person 
 who violates section 80A.02 in connection with the purchase or 
 sale of any security shall be liable to any investment advisory 
 client who is damaged thereby.  Damages in an action pursuant to 
 this subdivision shall include the actual damages sustained plus 
 interest from the date of payment or sale, costs and reasonable 
 attorney's fees.  

    Subd. 3.  Every person who directly or indirectly controls 
 a person liable under subdivision 1 or 2, every partner, 
 principal executive officer or director of such person, every 
 person occupying a similar status or performing a similar 
 function, every employee of such person who materially aids in 
 the act or transaction constituting the violation, and every 
 broker-dealer or agent who materially aids in the act or 
 transaction constituting the violation, are also liable jointly 
 and severally with and to the same extent as such person.  There 
 is contribution as in cases of contract among the several 
 persons so liable.  

    Subd. 4.  No person shall be liable under subdivisions 1 to 
 3 who shall sustain 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 facts by reason of which the 
 liability is alleged to exist.  

    Subd. 5.  Any tender specified in this section may be made 
 at any time before entry of judgment.  Tender by a purchaser 
 shall require only notice of willingness to exchange the 
 security for the amount computed pursuant to subdivision 1.  
 Tender by a seller shall require only notice of willingness to 
 pay the amount specified in exchange for the security.  Any 
 notice may be given by service as in civil actions or by 
 certified mail to the last known address of the person liable.  

    Subd. 6.  Every cause of action under this statute survives 
 the death of any person who might have been a plaintiff or 
 defendant.  

    Subd. 7.  No person may commence an action under 
 subdivision 1 more than three years after the sale upon which 
 such action is based.  No person may commence an action under 
 subdivision 2 more than three years after the occurrence of the 
 act or transaction constituting the violation.  

    Subd. 8.  No purchaser may commence an action under 
 subdivision 1 if, before suit is commenced, the purchaser has 
 received a written offer to repurchase the security for cash 
 payable on delivery of the security equal to the consideration 
 paid, together with interest at the legal rate from the date of 
 payment, less the amount of any income received thereon or, if 
 the purchaser no longer owns the security, an offer to pay an 
 amount in cash equal to the damages computed in accordance with 
 subdivision 1 and the purchaser has failed to accept such offer 
 in writing within 30 days of its receipt.  No offer shall be 
 effective to prevent suit under this section unless a duplicate 
 copy thereof shall have been filed with the commissioner at 
 least 20 days prior to its delivery to the offeree and the 
 commissioner shall not have objected to the offer within that 
 time.  The offer shall be in the form and contain the 
 information the commissioner by rule or order prescribes.  If 
 the offer is not performed in accordance with its terms, suit by 
 the offeree under this section shall be permitted without regard 
 to this subdivision.  

    Subd. 9.  No person who has made or engaged in the 
 performance of any contract in violation of any provision of 
 this section or any rule or order hereunder or has acquired any 
 purported rights under any such contract with knowledge of the 
 facts by reason of which its making or performance was in 
 violation may base any suit on such violation under the contract.

    Subd. 10.  Any condition, stipulation or provision binding 
 any person to waive compliance with any provision of sections 
 80A.01 to 80A.31 or any rule or order hereunder in the purchase 
 or sale of any security is void.  

    Subd. 11.  The rights and remedies promulgated by sections 
 80A.01 to 80A.31 are in addition to any other right or remedy 
 that may exist at law or in equity, but sections 80A.01 to 
 80A.31 do not create any cause of action not specified in this 
 section or section 80A.05, subdivision 5.  No civil cause of 
 action may be based solely upon the failure of a broker-dealer 
 or agent to comply with the requirements of section 80A.04, 
 subdivision 1 or 3, except a cause of action arising under 
 section 45.027.  

    HIST: 1973 c 451 s 23; 1986 c 444; 1987 c 336 s 17