Worldwide News Ltd, a foreign company based in the United States, issued a prospectus in Australia which it offered ordinary shares to the Australian public. The purpose of the issue was to finance the expansion of the company into television broadcasting. The prospectus stated that the company was an applicant for a new television broadcasting licence and, if granted, the company claimed there would be substantial earnings arising from this new business venture. The prospectus included a report from an auditor who confirmed that the income and profit forecasts were fair and reasonable based on the information provided by the directors. The prospectus also included an advice from the directors of Worldwide News Ltd that there was no chance of the company being unsuccessful in its application of this licence. Worldwide New Ltd's application for the licence failed and it now appears that the company's solicitors' advice was negligent in that it failed to take into account the rules regarding foreign ownership of television broadcasting licences in Australia. Over two million shares were issued pursuant to the prospectus offer which is still open for subscription.

(a) Who, if anyone, faces liability for the statements in the prospectus and what are the possible outcomes? Answer with reference to the Corporations Act 2001 (Cth); and

(b) What causes of legal action are open to ASIC, the regulator? Answer with reference to the Corporations Act 2001 (Cth).