New Zealand Legislation: Acts

58 Criminal liability for misstatement in advertisement or registered prospectus

• (1) Subject to subsection (2), where an advertisement that includes any untrue statement is distributed,—

  • (a) the issuer of the securities referred to in the advertisement, if an individual; or

  • (b) if the issuer of the securities is a body, every director thereof at the time the advertisement is distributed—

  commits an offence.

  (2) No person shall be convicted of an offence under subsection (1) if the person proves either that the statement was immaterial or that he or she had reasonable grounds to believe, and did, up to the time of the distribution of the advertisement, believe that the statement was true.

  (3) Subject to subsection (4), where a registered prospectus that includes an untrue statement is distributed, every person who signed the prospectus, or on whose behalf the registered prospectus was signed for the purposes of section 41(1)(b), commits an offence.

  (4) No person shall be convicted of an offence under subsection (3) if the person proves either that the statement was immaterial or that he or she had reasonable grounds to believe, and did, up to the time of the distribution of the prospectus, believe that the statement was true.

  (5) Every person who commits an offence against this section is liable—

  • (a) on conviction on indictment to—

    • (i) imprisonment for a term not exceeding 5 years; or

    • (ii) a fine not exceeding $300,000 and, if the offence is a continuing one, to a further fine not exceeding $10,000 for every day or part of a day during which the offence is continued; or

  • (b) on summary conviction to—

    • (i) imprisonment for a term not exceeding 3 months; or

    • (ii) a fine not exceeding $300,000 and, if the offence is a continuing one, to a further fine not exceeding $10,000 for every day or part of a day during which the offence is continued.

  Section 58: substituted, on 15 December 1994, by section 2(1) of the Securities Amendment Act (No 2) 1994 (1994 No 158).

  Section 58(3): amended, on 1 May 2011, by section 32 of the Securities Amendment Act 2011 (2011 No 6).

  Section 58(5): substituted, on 1 December 2002, by section 16 of the Securities Amendment Act 2002 (2002 No 43).