Section 12(a)(2) creates liability for any person who offers or sells a security through a prospectus or an oral communication containing a material misstatement or omission. The person is liable to the purchaser for rescission of the purchase or damages, provided that the purchaser did not know about the misstatement or omission at the time of the purchase. Court holdings imply that the cause of action only applies to purchasers in the initial offering, not secondary purchases, but this is not settled law yet. Investors suing under 12(a)(2) can only recover from sellers.