Beth is an accountant with Consumer Sales Corporation.Doral buys Consumer stock and loses money on the investment.To recover from Beth under Section 10(b)of the Securities Exchange Act of 1934 and SEC Rule 10b-5,Doral must prove

Question

Quizplus · Accepted Answer

To recover under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, Doral must prove the following five elements: 1) scienter (intent to deceive or manipulate), 2) fraud (false statements or misleading omissions), 3) reliance (Doral relied on the false statements or omissions), 4) materiality (the false statements or omissions were important enough to affect a reasonable investor's decision), and 5) causation (the false statements or omissions caused Doral's losses). Therefore, the best choice is D as it includes all five required elements.

Beth Is an Accountant with Consumer Sales Corporation