Civil liability for misstatements in prospectus: directors, promoters and experts face compensation obligations for investor losses.

Civil liability for misstatements in prospectus requires the company and specified persons - directors at issue, named or agreed directors, promoters, those who authorised the issue, and experts - to pay compensation to subscribers who sustain loss from misleading statements, inclusions or omissions. Two defences excuse liability: prior withdrawal of consent to be a director before issue, or issuance without knowledge followed by prompt public notice. If the prospectus was issued with intent to defraud, those persons are personally liable without limitation for subscribers' losses.

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