Asked by ZnonEmpire candy on Jul 19, 2024
Verified
The Reform Act's safe harbor under the 1933 Act eliminates civil liability based on an untrue statement or omission if a forward-looking statement is:
A) material.
B) made without actual knowledge that it was false or misleading.
C) unidentified as a forward-looking statement
D) based on an expert's opinion.
Reform Act
Legislation intended to bring about changes or improvements in a specific area, often used to reference specific historic statutes that reformed political processes.
Safe Harbor
Safe harbor refers to a legal provision to reduce or eliminate liability in certain situations, provided that the actions taken meet specified criteria.
Civil Liability
The legal responsibility of one party to another for damages or losses caused, typically resolved through the payment of compensatory damages or other remedies.
- Recognize the behaviors and activities that are forbidden by the laws against fraud and bribery in securities legislation.
Verified Answer
AA
Abhinav AnandJul 20, 2024
Final Answer :
B
Explanation :
The safe harbor provision under the Reform Act protects against civil liability for forward-looking statements if they were made without actual knowledge that the statement was false or misleading. This encourages companies to provide future projections and plans without the fear of litigation, provided they genuinely believe in their statements at the time they are made.
Learning Objectives
- Recognize the behaviors and activities that are forbidden by the laws against fraud and bribery in securities legislation.