Ewan, the chief executive officer of Furniture Inc., intentionally understates the amount of the firm's debts in information provided to investors as part of an issue of stock. Gary buys the stock and suffers a loss. Ewan may be subject to

Question

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Ewan's intentional understatement of the firm's debts to investors constitutes securities fraud, which can lead to both government prosecution (for violating securities laws) and a private investor's suit (for the losses suffered due to the fraudulent information provided).

Ewan, the Chief Executive Officer of Furniture Inc