In selling securities in his company, Cody complies with nearly all of the rules under the Securities Act of 1933. However, he deliberately overstates the value of the company in the prospectus, and he begins selling the shares one week before the effective date of the registration. Cody is subject

a. to prosecution by the Department of Justice and is liable for fines and damages if investors are harmed by his acts.
b. only to criminal prosecution by the state attorney general in the state where he committed the crime.
c. only to civil fines and damages imposed by the SEC.
d. only to civil fines and damages imposed by a state attorney general.

Answer: a. to prosecution by the Department of Justice and is liable for fines and damages if investors are harmed by his acts.