Rule 10b-5 prohibits any person from making a misstatement or omission of a material fact in connection with:

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Rule 10b-5 prohibits any person from making a misstatement or omission of a material fact in connection with the purchase or sale of any security.One element of this action is that the purchaser or seller must rely on the misstatement or omission.However,in recent years,the courts have greatly eroded this notion of reliance and allowed plaintiffs to recover even though they had not read the report containing the omissions.

Rule 10b-5 Prohibits Any Person from Making a Misstatement or Omission