Series 79: Reasonable Investigation

Taken from our FINRA Investment Banking Exam

Definition of the term Reasonable Investigation...

the standard that due diligence must meet to establish a due diligence defense. In the case of a registration statement containing misstatements or omissions of material fact, Rule 176 lists circumstances relevant to determining whether a person’s investigation was reasonable, including the person’s role in the offering and whether the person reasonably relied on information from officers or employees of the issuer.

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