75. Prohibition against misleading and deceptive statements or omissions

(1) A Person must not issue a Prospectus if there is:

• (a) a misleading or deceptive statement in the Prospectus; or
• (b) any material omission from the Prospectus; or
• (c) a significant new matter or a significant change in circumstances is known to the Issuer before the Prospectus is issued.

(2) A Person does not contravene the prohibition in section 75(1) if that Person can prove the circumstances or matters specified in sections 76 or 77.

76. Defence of reasonable inquiries and reasonable belief

A Person does not commit a contravention of section 75(1), if that Person proves that he:

• (a) made all inquiries that were reasonable in the circumstances; and
• (b) after making such inquiries, believed on reasonable grounds that the Prospectus was not misleading or deceptive.

77. Defence of reasonable reliance on information given by another Person

(1) A Person does not commit a contravention of section 75(1) if the Person proves that reasonable reliance was placed by the person on information given by:

• (a) if the Person is not a natural Person, someone other than a member of the Governing Body, or Employee representative of the Person; or
• (b) if the Person is a natural Person, someone other than an Employee representative of the natural Person.

(2) For the purposes of this Part, a Person is not the representative of another Person merely because the Person performs a particular professional or advisory function for that other Person.

78. Statements about future matters

(1) A Person is taken to make a misleading or deceptive statement about a future matter by himself or through his representative, if he, at the time of making the statement or causing the statement to be made, did not have reasonable grounds for making the statement or causing the statement to be made.

(2) The onus for proving that reasonable grounds existed for the purposes of section 78(1) is on the Person who made the statement or caused the statement to be made.

(3) A Person referred to in section 78(2) may rely on the circumstances referred to in section 76 or 77 in order to prove that he had reasonable grounds for making the statement relating to the future matter.

79. Civil compensation

(1) Any Person prescribed in Rules made by the AFSA as being liable for a Prospectus is liable to pay compensation to another Person who has acquired Securities to which the Prospectus relates and who has suffered loss or damage arising from any untrue or misleading statement in the Prospectus or the omission from it of any material matter required to have been included in the Prospectus under these Regulations or Rules made thereunder.

(2) The AFSA may make Rules prescribing circumstances in which a Person who would otherwise be liable under section 79(1) will not be so liable.

(3) Nothing in this section affects the powers, rights or liabilities that any Person may have apart from this section including the power to institute proceedings under section 129 (Action for Damages).

80. Stop orders

If the AFSA is satisfied that an Offer of Securities to the Public would contravene or has contravened these Regulations or the Rules made for the purposes of these Regulations or it is necessary or desirable in the interest of the AIFC, the AFSA may issue a stop order directing that no offer, issue, sale or transfer of the Securities be made for such a period of time as it thinks appropriate.