Rule 10b-5 Under Section 10(b)of the Securities Exchange Act of 1934

question 31

Multiple Choice

Rule 10b-5 under Section 10(b) of the Securities Exchange Act of 1934 imposes liability on an accountant for violation of certain duties. Which of the following is an investor not required to prove to recover from a CPA?

• A)A material, factual misrepresentation or omission.
• B)Reliance by the plaintiff on the financial statements.
• C)Damages suffered as a result of reliance on the financial statements.
• D)The security price was artificially inflated as a result of the materially misstated financial statements.

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Definitions:

Guidelines

Recommended practices or principles designed to steer actions or decisions in specific situations.

Labor Relations

Is the process of dealing with employees who are represented by a union.

Represented

Pertains to something being symbolized, depicted, or stood for by someone or something else.

A Union

An organized association of workers formed to protect and further their rights and interests.