In order to be actionable under Rule 10b-5,misstatements or omissions must be made with:

Question

Quizplus · Accepted Answer

Misstatements or omissions must be made with scienter, which refers to an intent to deceive, manipulate, or defraud. This means that the person making the statement or omission must know that it is false or misleading and intend to deceive investors. Negligence or lack of due care may be sufficient to establish liability under other laws, but not under Rule 10b-5. Recklessness may also be sufficient in some cases, but it is not the required standard.

In Order to Be Actionable Under Rule 10b-5,misstatements or Omissions