Nova, Inc., sought to sell a new issue of common stock. It registered the issue with the Securities and Exchange Commission but included false information in both the registration statement and the prospectus. The issue was underwritten by Omega & Sons and was sold in its entirety by Periwinkle, Rameses, and Sheffield, Inc., a securities broker-dealer. Telford, who was unaware of the falsity of this information, purchased five hundred shares at $6 per share.
Three months later, the falsity of the information contained in the prospectus was made public, and the price of the shares fell to $1 per share. The following week, Telford brought suit against Nova, Inc.; Omega & Sons; and Periwinkle, Rameses, and Sheffield, Inc., under the Securities Act of 1933.
a. Who, if anyone, is liable under the 1933 Act? If liable, under which provisions?
b. What defenses, if any, are available to the various defendants?