Clause 12

Where an offer or invitation in respect of shares or debentures, or units of shares or debentures, is made under a prospectus or a profile statement and —

a false or misleading statement is contained in —

the prospectus or the profile statement; or

any application form that is in or accompanies the prospectus or the profile statement;

there is an omission to state any information required to be disclosed under section 45 in respect of the prospectus, or under section 45A in respect of the profile statement; or

there is an omission to state a new circumstance that —

has arisen since the prospectus or the profile statement was registered by the Registrar; and

would have been required by section 45 to be included in the prospectus, or by section 45A to be included in the profile statement, if it had arisen before the prospectus or the profile statement was registered,the persons referred to in subsection (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 2 years or to both.(2) The persons guilty of the offence are —

the person making the offer or invitation to the public;

if the offer or invitation is made by a corporation, each director of the corporation;

a person named in the prospectus or the profile statement with his consent as a proposed director of the corporation;

an underwriter (but not a sub-underwriter) to the issue or sale of the shares or debentures, or units of shares or debentures, named in the prospectus or the profile statement with his consent;

a person named in the prospectus or the profile statement with his consent as having made a statement —

that is included in the prospectus or the profile statement; or

on which a statement made in the prospectus or the profile statement is based,but only in respect of the inclusion of that statement; and

a person who made the false or misleading statement, or omitted to state the information or circumstance, as the case may be.(3) A person shall not be taken to have contravened subsection (1) if the false or misleading statement, or omission, or new circumstance that is omitted from disclosure, is not materially adverse from the point of view of the investor.(4) For the purposes of subsection (1), a false or misleading statement about a future matter (including the doing of, or the refusal to do, an act) is taken to have been made if a person makes the statement without having reasonable grounds for making the statement.(5) Where a prospectus relating to any shares or debentures, or any unit of shares or debentures, in a corporation is issued and the prospectus omits to state any matter required to be stated as specified in the Fifth Schedule, each director of the corporation and other person responsible for the prospectus shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 2 years.(6) The defences specified in section 55B shall, with the necessary modifications, be available to any person who is liable for an offence under this section.”.