Matty Is an Employee of ValCom but Doe Not Own

question 3

Multiple Choice

Matty is an employee of ValCom but doe not own any ValCom stock. At her five year employment anniversary, she decides to buy 50 shares of a new issue of company stock as a savings plan and afterward receives the signed registration statement.  Because of her employment at ValCom, she recognizes that the statement contains an untrue material fact. Can she sue the auditor?

• A) Yes, under Section 11, proof of reliance is usually not required.
• B) Yes, if she can prove she would not have bought the stock otherwise.
• C) No, because she did not rely on the statement.
• D) No, because there is no privity between Matty and the auditor.

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Definitions:

Assimilation

The cognitive process by which new information is integrated into existing schemas or frameworks, helping individuals to understand and interact with the world around them.

Sensorimotor

Refers to the stage in early childhood development where learning occurs through sensory experiences and manipulating objects.

Preoperational

The second stage in Piaget's theory of cognitive development, marked by the emergence of symbolic thought but lacking in the understanding of logic or operations.

Concrete Operational

A stage in Piaget's theory of cognitive development, typically occurring between ages 7 and 12, where children gain the ability to think logically about concrete objects and events.