Violations of the 1933 Act.

Three shareholders of iStorage sought to sell their stocks through World Trade Financial Corp. The shares were restricted securitiessecurities acquired in an unregistered, private sale. Restricted securities typically bear a "restrictive" legend (written statement) clearly stating that they cannot be resold in the public marketplace. This legend had been wrongly removed from the iStorage shares, however. Information about the company that was publicly available included the fact that, despite a ten-year life, it had no operating history or earnings. In addition, it had net losses of about $200,000 and its stocks were thinly traded (meaning the stock was infrequently traded and may be difficult to sell). Without investigating the company or the status of its stock, World Trade sold more than 2.3 million shares to the public on behalf of the three customers. Did World Trade violate the securities act of 1933? Discuss.

[World Trade Financial Corp. v. Securities and Exchange Commission, 739 F.3d 1243 (9th Cir. 2014)]