Tom was hired to prepare and certify a registration statement for Blue Scales,Inc.The Securities and Exchange Commission (SEC)found some omissions of material facts in the registration statement.Which of the following statements is true of this scenario?
A) Tom cannot be held liable as the SEC is not a member of the limited class of intended users of his statements.
B) Tom cannot be held liable as the SEC is not in privity of contract with him.
C) Tom can be held liable under Section 11(a) of the Securities Act of 1933 regardless of his willfulness in making misstatements of facts.
D) Tom can avoid liability if he can show that he had reasonable grounds to believe that the statements made were true.

Question

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The Answer of Tom was hired to prepare and certify a registration statement for Blue Scales,Inc.The Securities and Exchange Commission (SEC)found some omissions of material facts in the registration statement.Which of the following statements is true of this scenario?
A) Tom cannot be held liable as the SEC is not a member of the limited class of intended users of his statements.
B) Tom cannot be held liable as the SEC is not in privity of contract with him.
C) Tom can be held liable under Section 11(a) of the Securities Act of 1933 regardless of his willfulness in making misstatements of facts.
D) Tom can avoid liability if he can show that he had reasonable grounds to believe that the statements made were true.

Tom Was Hired to Prepare and Certify a Registration Statement