Bruno may be in trouble. He wanted to finance the construction of a new $10M health club venture, incorporated as Get Healthy, Inc. In following SEC’s registration process requirements, he filed a registration statement before seeking out investors. He also provided interested potential investors with the required prospectus. Later on the information in the registration statement and the prospectus proved to be false and misleading, with the assets and income being vastly overstated. To add to his problems, the health club venture was going very poorly and investors were looking to get their money back, arguing that Bruno had violated the Securities Act of 1933. Bruno responded that the investors should have protected themselves, stating that none of them made any effort to check on information contained in the prospectus or to investigate the future profitability of the health club venture. Bruno says that he also plans to rely on the so-called due diligence defense because he acted carefully throughout the above, although a couple of mistakes were made. Do you think Bruno is correct?