Ness,a broker,advises Ollie to invest in Penny Stock Inc.When the share price of Penny's stock drops,Ollie accuses Ness of fraud,claiming reliance on the broker's advice.The reliance that gives rise to liability for fraud requires

Question

Quizplus · Accepted Answer

For liability for fraud to arise, the plaintiff must prove that the defendant made a misrepresentation of fact that the defendant knew was false or was reckless as to its truth, and that the plaintiff reasonably relied on that misrepresentation. Therefore, choice B is the correct answer as the misrepresentation of fact is essential for it to be considered fraud. The other choices are not necessary components of reliance in fraud.

Ness,a Broker,advises Ollie to Invest in Penny Stock Inc