Which of the Following Is an Accurate Statement Regarding Rule

question 66

Multiple Choice

Which of the following is an accurate statement regarding Rule 10b-5 of the Securities Exchange Act of 1934?

• A) The Supreme Court has ruled that liability under Rule 10b-5 does not extend to aiders or abettors who participated in financial statement misstatements that were not the primary defendants.
• B) Federal court decisions have clarified that Rule 10b-5 applies only to direct sellers.
• C) Hochfelder and subsequent court decisions have increased the liability of auditors under Rule 10b-5.
• D) According to most recent court decisions, poor judgment is proof of fraud.

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Definitions:

Federal Deficits

The financial situation in which the government's expenditures exceed its revenues in a given fiscal year.

Public Capital

Assets owned by the public sector or government, including infrastructure like roads, bridges, schools, and hospitals that are used for public services.

Income Redistribution

The transfer of income from certain individuals or groups to others through government policies like taxation and social benefits.

Government Securities

Financial instruments issued by a government to finance its expenditure, including bonds, bills, and notes.