Rescission Offer

Tavis Orrell sells Marguerite Sable 500 shares of a security that is properly registered and effective in State R. Orrell himself has never been registered as an agent in State R and no exclusion applies to him. The shares fall sharply and Sable sues under the Uniform Securities Act. Her civil remedy is:

1. A.unavailable, because the security itself was lawfully registered and effective in State RRegistration of the security satisfies only one of the Act's two registration requirements. The person selling must also be registered.
2. B.unavailable unless she proves that Orrell defrauded herFraud is a separate prong. A sale in violation of the registration provisions is actionable on its own.
3. C.available, because the sale was made in violation of the Act's registration provisions governing personsCorrect. Selling as an unregistered agent is a registration violation, and the buyer gets the statutory rescission remedy.
4. D.limited to filing a complaint with the Administrator, since private suits lie only for fraudThe Act creates a private right of action for registration violations, not merely for fraud.

Why: The civil liability section reaches any person who offers or sells a security "in violation of" the Act's registration provisions, and those provisions cover the registration of PERSONS as well as of securities. A sale made by an unregistered agent is such a violation, so the buyer has the statutory remedy even though the security itself was lawfully registered. She may recover the consideration paid plus interest at the rate the Administrator specifies, less any income received on the security, on tender of the security back to the seller. No showing of fraud is required.

Perpetua Vane bought stock from Kettleby Rowe Securities in a sale that violated the Uniform Securities Act. Her lawyer tells her she has a claim under the Act's civil liability section, and separately notes that the same conduct would support a common-law fraud claim in State M, which permits a broader measure of damages. Under the Uniform Securities Act, the existence of the statutory remedy:

1. A.bars the common-law claim, because a detailed statutory remedy is the exclusive route for a securities purchaserThe Act contains no exclusivity clause. It says the opposite: its remedies are in addition to any others existing at law or in equity.
2. B.does not displace the common-law claim, because the rights and remedies under the Act are in addition to any others that exist at law or in equityCorrect. The Act's cumulative-remedies provision preserves every other right the investor has; the statutory action supplements common-law fraud, contract and agency claims.
3. C.suspends the common-law claim until the statutory action has been finally decidedNo such stay exists in the Act. Nothing sequences the two theories.
4. D.requires her to elect between the statutory and the common-law claim before filing suitThe Act imposes no election of remedies. The bar on double recovery operates at judgment, not at filing, and it does not force her to abandon a theory in advance.

Why: The Uniform Securities Act states that the rights and remedies it creates are IN ADDITION TO any other rights or remedies that may exist at law or in equity. The statute supplements the common law; it does not replace it. Vane may plead the statutory claim and a common-law fraud claim arising from the same sale. The Act imposes no election of remedies at the pleading stage and does not stay one claim pending the other. What she cannot do is collect twice for the same loss, but that is an ordinary rule against double recovery, not a limit the Act imposes on which theories she may advance.

Ellery bought securities on March 3 in a sale that violated the Uniform Securities Act. Before any suit is filed, the seller mails Ellery a written rescission offer that complies with the Act in every respect, and Ellery receives it on September 14. He decides on October 22 that he would rather sue than accept the offer. Under the Uniform Securities Act, Ellery's position is that he:

1. A.May still accept the offer, because the acceptance period runs for two years from the date of the saleTwo years relates to limitation periods, not to the acceptance window for a rescission offer.
2. B.May still sue, because the 30-day acceptance period runs from the date the offer was mailed rather than receivedMeasuring from mailing would make the deadline earlier, not later, so this could not preserve his claim.
3. C.Has lost both the right to accept the offer and the right to sue, because a compliant rescission offer must be accepted within 30 days of receiptCorrect. September 14 plus 30 days is October 14, and October 22 falls outside the window.
4. D.May still sue, because a rescission offer is merely a settlement proposal that cannot extinguish a statutory right of actionThe Act gives a compliant rescission offer exactly that effect if the buyer does not accept it in time.

Why: A buyer who receives a compliant written rescission offer must accept it within 30 days of receipt. Ellery received the offer on September 14, so the deadline was October 14; deciding on October 22 leaves him past both the acceptance window and his right to sue on that sale.

A broker-dealer that sold securities in violation of the Act sends the buyer a written offer to buy the securities back with interest — a letter of rescission. The buyer must accept or reject the offer within...

1. A.30 days, or the right to sue is lostCorrect — the buyer has 30 days to accept a rescission offer or forfeits the right to sue.
2. B.60 daysThe statutory response window is 30 days, not 60.
3. C.3 yearsThree years is a civil statute-of-limitations figure, not the response window for a rescission letter.
4. D.10 business daysTen business days is the investment adviser discretionary-authority window, not the rescission period.

Why: The buyer has 30 days to accept a rescission offer. If the buyer does not accept within 30 days, the buyer forfeits the right to sue over that sale.