Asked by Breanna Clayton on May 19, 2024
Verified
Recovery of damages under Rule 10b-5 requires proof of:
A) reliance on a misstatement or omission.
B) materiality.
C) connection with the purchase or sale of a security .
D) All of these are required for recovery of damages.
Rule 10b-5
A regulation under the U.S. Securities and Exchange Act of 1934 which prohibits any act or omission resulting in fraud or deceit in connection with the sale of securities.
Misstatement
An incorrect statement or representation, often referring to inaccuracies in financial statements or reports.
Materiality
Refers to the importance or significance of information, actions, or facts in influencing decisions within a business, legal, or financial context.
- Assess the legal repercussions for non-compliance with securities legislation and the civil obligations emanating from these violations.
Verified Answer
MZ
malik zehraMay 21, 2024
Final Answer :
D
Explanation :
Rule 10b-5, promulgated under the Securities Exchange Act of 1934, is a key provision used to address securities fraud. For a plaintiff to recover damages under Rule 10b-5, they must prove reliance on a misstatement or omission, the materiality of the misstatement or omission, and a connection with the purchase or sale of a security. Therefore, all of these elements (A, B, and C) are required for recovery of damages.
Learning Objectives
- Assess the legal repercussions for non-compliance with securities legislation and the civil obligations emanating from these violations.