Section 12(a)(1) of the Securities Act of 1933 imposes liability on sellers of securities who violate that Act's registration and prospectus delivery requirements. Because the statute refers to sellers, it seems unlikely that investors themselves might have liability under Section 12(a)(1). Things are not as they seem, however.
Samuels v. Lido Dao, 2024 WL 4815022 (N.D. Cal. Nov. 18, 2024), motion to certify appeal denied, 2025 WL 371797 (N.D. Cal. Feb. 3, 2025) involved a suit by an investor who bought cryptocurrency tokens on an exchange. The tokens were originally issued by an entity called Lido DAO. After losing money, the investor sued, alleging that the tokens were offered and sold without registration under the Securities Act. The defendants included four large institutional investors in Lido—Paradigm Operations, Andreessen Horowitz, Dragonfly Digital Management, and Robot Ventures. The plaintiff's theory was that Lido was a partnership and…
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