When Bringing Suit Against Auditors Under Section 10(b)of the Securities

question 1

Multiple Choice

When bringing suit against auditors under section 10(b) of the Securities Exchange Act of 1934,plaintiffs must allege and prove

• A) the financial statements in the offering registration filing contained a material misstatement.
• B) auditors were aware of material misstatements in the financial statements.
• C) auditors were guilty of ordinary negligence and failed to discover material misstatements in the financial statements.
• D) the plaintiffs purchased the specific securities through a public offering and thus have a right to sue.

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Definitions:

Comparative Advantage

The ability of an individual, company, or country to produce a good or service at a lower opportunity cost than competitors.

Labor-Intensive

A term describing a process or industry that requires a large amount of labor to produce its goods or services as compared to the amount of capital required.

Comparative Advantage

The capacity of a being to generate a product or offer a service at a reduced opportunity cost in comparison to another.

Cars

motor vehicles with wheels designed primarily for the transport of people rather than goods.