NASAA Series 63Remedies and Administrative ProvisionsHard
A buyer accepts a written, bona fide rescission offer from an issuer and receives the full amount calculated under the Uniform Securities Act. Which statement best describes the legal effect of this acceptance?
- AThe issuer remains liable for punitive damages despite the rescission
- BThe rescission is not effective until the Administrator formally approves it
- CThe buyer retains the right to later sue for the same violation if she changes her mind
- DThe buyer waives any further right to sue the issuer for that same violation
Show answer & explanationAnswer & explanation
Correct answer: D. The buyer waives any further right to sue the issuer for that same violation
Once a buyer accepts a valid, bona fide rescission offer and receives full payment as calculated under Section 410, she is barred from later suing on that same transaction. This finality is a key incentive for issuers to make such offers proactively.
Why the other options are wrong
- A. Punitive damages are not part of the USA's civil remedy scheme in this context.
- B. Administrator approval is not required for a rescission offer to be valid or effective.
- C. Incorrect; acceptance of the offer extinguishes the right to sue for that violation.
Effect of Accepting a Rescission Offer
Accepting and receiving payment under a bona fide rescission offer bars the buyer from bringing further legal action for that same violation.
- Offer must be made in good faith and calculated correctly.
- Bars future suits only for the specific violation covered.
- Encourages issuers to self-correct registration/fraud violations proactively.
Memory trick: 'Accept the check, close the book — no second bite once rescission's took.'