Seller Liability Under Section 12(2) of the Securities Act of 1933

This Note discusses which persons courts should deem to be"sellers" under section 12(2) according to their relationships to the challenged transaction. Part II examines the divergent approaches that courts have developed to identify seller status in the absence of legislative history. Part III analyzes the three major approaches and compares the scope of liability under each analysis. Last, part IV concludes that significant differences exist among these approaches and that courts uniformly should adopt a modified version of the proximate cause-substantial factor analysis ...

This part examines each of the three approaches in particular situations and compares the results under each approach. This comparison shows first, that the strict privity approach is too narrow and does not sufficiently meet the needs of purchasers; second, that the aiding and abetting approach is too broad and violates the express language of the statute; and last, that the proximate cause-substantial factor approach is the most reasonable and practicable standard for the courts to employ if properly refined.