Who bears liability for misleading statements found in a prospectus?

Liability for misleading statements in a prospectus primarily lies with the directors of the issuer. This is because the prospectus is essentially a document that provides potential investors with crucial information about the investment, and it must be accurate and not misleading. Directors are responsible for the contents of the prospectus and ensure that all information presented is truthful, complete, and compliant with regulatory requirements.

In the event of misleading statements, shareholders or regulatory authorities may have roles in addressing the consequences of such misrepresentations, but they do not hold liability specifically for the content of the prospectus itself. The writer of the summary may contribute to the prospectus, but ultimate legal responsibility falls on the directors, who are expected to provide oversight and ensure the integrity of the document. Therefore, the directors of the issuer are the ones who bear liability for any misleading statements made within it.