New Zealand Legislation: Acts

58 Criminal liability for misstatement in advertisement or registered prospectus

• (1) Subject to subsection (2) of this section, 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) of this section 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) of this section, 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(b) of this Act, commits an offence.

  (4) No person shall be convicted of an offence under subsection (3) of this section 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 was substituted, as from 1 September 1983, by section 30 Securities Amendment Act 1982 (1982 No 147).

  Section 58 was substituted, as from 15 December 1994, by section 2(1) Securities Amendment Act (No 2) 1994 (1994 No 158). See section 2(2) and (3) Securities Amendment Act (No 2) 1994 relating to proceedings commenced but not completed before 15 December 1994.

  Subsection (5) was substituted, as from 1 December 2002, by section 16 Securities Amendment Act 2002 (2002 No 43).