Juanita works for Chevco but owns no Chevco stock. She buys 10 shares of a new issue of company stock as a savings plan and afterward receives the signed registration statement, which contains an untrue statement of material fact. Because she works for Chevco, she recognizes the error. Can she sue the auditor?

Question

Quizplus · Accepted Answer

Section 11 of the Securities Act imposes strict liability on the issuer, underwriter, and auditors for any material misstatement or omission in a registration statement. Proof of reliance is not required, and the plaintiff need not prove that the fraud actually caused the loss.

Juanita Works for Chevco but Owns No Chevco Stock