Whitlow & Company is a brokerage firm registered under the Securities Exchange Act of 1934. The Act requires such a brokerage firm to file audited financial statements with the SEC annually. Mitchell & Moss, Whitlow's CPAs, performed the annual audit for the year ended December 31, 200X, and rendered an unqualified opinion, which was filed with the SEC along with Whitlow's financial statements. During 200x Charles, the president of Whitlow & Company, engaged in a huge embezzlement scheme that eventually bankrupted the shareholders of Whitlow & Company, including Thaxton who had recently purchased several shares of stock of Whitlow & Company after reviewing the company's 200x audit report. Thaxton sues Mitchell & Moss for negligence but admits that the accountants had no knowledge of the fraud.
REQUIRED: What liability to Thaxton, if any, does Mitchell & Moss have under the Securities Exchange Act of 1934?

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The Answer of Whitlow & Company is a brokerage firm registered under the Securities Exchange Act of 1934. The Act requires such a brokerage firm to file audited financial statements with the SEC annually. Mitchell & Moss, Whitlow's CPAs, performed the annual audit for the year ended December 31, 200X, and rendered an unqualified opinion, which was filed with the SEC along with Whitlow's financial statements. During 200x Charles, the president of Whitlow & Company, engaged in a huge embezzlement scheme that eventually bankrupted the shareholders of Whitlow & Company, including Thaxton who had recently purchased several shares of stock of Whitlow & Company after reviewing the company's 200x audit report. Thaxton sues Mitchell & Moss for negligence but admits that the accountants had no knowledge of the fraud.
REQUIRED: What liability to Thaxton, if any, does Mitchell & Moss have under the Securities Exchange Act of 1934?

Whitlow & Company Is a Brokerage Firm Registered Under the Securities