Both §17(a) of the 1933 Securities Act and §10(b) of the 1934 Exchange Act impose liability for making material misrepresentations in the context of securities transactions. The similarities between the two provisions are so pronounced that one treatise on the subject has remarked that “[b]ecause Section 17(a) and Rule 10b-5 overlap with respect to imposing restrictions on any sale of securities…violation of one in connection with a sale of securities is also a violation of the other.”1
The Second Circuit, comparing the elements of a claim brought under Rule 10b-5 with a claim brought under §17(a), wrote that: “[w]ith respect to §17(a)(1), essentially the same elements must be established in connection with the offer or sale of a security [as under Rule 10b-5]“2
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