On April 16, 2026, the First Department issued a decision in Glenmede Trust Co., N.A. v. Infinity Q Capital Mgt. LLC, 2026 NY Slip Op. 02330, holding that a person that signs a registration statement is liable for misstatements in it and cannot disclaim that responsibility, explaining:
Potter’s direct liability under section 11 rests on the fact that he signed the Registration Statement. There is no mechanism under the 1933 Act for a signatory to limit their responsibility for statements in a registration statement via a disclaimer. Thus, Potter is strictly liable for any misstatement in the operative Registration Statement.
The 1933 Act requires that certain classes of securities offered to the public be registered with the SEC (15 USC § 77e). The process requires an issuer to file a formal registration statement with the SEC that contains certain information. The registration statement must be signed by each issuer, its principal executive officer or officers, its principal financial officer, its comptroller or principal accounting officer, and the majority of its board of directors or persons performing similar functions.
In the event that any part of the registration statement contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, a purchaser of the securities offered pursuant to the registration statement has a cause of action against five enumerated categories of defendant:
(1) every person who signed the registration statement;
(2) every person who was a director of (or person performing similar functions) or partner in the issuer at the time of the filing of the part of the registration statement with respect to which his liability is asserted;
(3) every person who, with his consent, is named in the registration statement as being or about to become a director, person performing similar functions, or partner;
(4) every accountant, engineer, or appraiser, or any person whose profession gives authority to a statement made by him, who has with his consent been named as having prepared or certified any part of the registration statement, or as having prepared or certified any report or valuation which is used in connection with the registration statement, with respect to the statement in such registration statement, report, or valuation, which purports to have been prepared or certified by him;
(5) every underwriter with respect to such security.
The only category of persons under which Potter falls is signatory under subsection 1. Section 11 imposes strict liability on every person who signed the registration statement. We must give effect to the plain meaning of the statute. Subsection 4 above, which applies to experts’ certifications of discrete portions of a registration statement, illustrates that Congress knew how to allow for a limited scope certification where it chose to do so.
Defendants note that the signature page that precedes Potter’s in the Registration Statement states that the signatories on that page are signing pursuant to the requirements of the Securities Act, presumably a reference to section 6 of the Securities Act (15 USC § 77f [a]). There is no similar statement prior to Potter’s signature. However, liability depends on whether a person signed the Registration Statement, not on whether they were required to do so under another section of the Act. And Potter’s attempted disclaimer does not change this analysis.
Perhaps because section 11’s language is clear, there is not a great deal of apposite authority on this point. However, the most persuasive federal authority supports plaintiffs’ argument. In Obasi Inv., Ltd. v Tibet Pharms., Inc. (931 F3d 179 [3d Cir 2019]), the court considered the liability of the defendants whom the plaintiffs claimed were named as a director of the issuer under section 77k(a)(3). In analyzing the text, the court noted that unlike section 77k(a)(4) — the expert provision — section 77k(a)(3) did not contain the language limiting liability to just the statements or reports prepared by the director. That’s because liability under § 77k(a)(3) is not limited to particular statements within the registration statement, and that is the reason the language appears in 77k(a)(4) and not in 77k(a)(3). The same reasoning applies here: a signatory has no power via an exordium to unilaterally limit his or her liability under the Act.
Wang v Cloopen Group Holding Ltd. (661 F Supp 3d 208, 238 [SD NY 2023]) also provides closely analogous authority. In Wang, the defendants argued that one of them, DeVries, had signed the registration statement not in her personal capacity, but as an employee of the issuer. She argued that this limitation prevented her from being personally liable under section 11. The court disagreed, holding that the Cogency Defendants do not cite any authority for the proposition that a signatory to a registration statement is exempt from Securities Act liability because the signatory purported to sign the document on an employer’s behalf. Thus, the claims against DeVries under Sections 11 and 15 may proceed.
(Internal quotations and citations omitted).