A Defense to an Action Based on Material Omissions and Untrue

question 52

Multiple Choice

A defense to an action based on material omissions and untrue statements contained in a registration statement is:

• A) innocent mistake.
• B) due diligence.
• C) constructive disclosure.
• D) reasonable diligence.

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Definitions:

Cash Flows

The movement of cash into or out of a business, project, or financial product as it generates income or pays expenses.

Operating Activity

Pertains to the core business activities of a company, such as selling goods or providing services, which generate revenue.

Income Taxes

Taxes imposed by the government on the income generated by individuals, businesses, and other entities within their jurisdiction.

Statement of Cash Flows

A financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company, showing how the company's operations are running, where its money is coming from, and how it is being spent.