Mays bought McCovey Corp.common stock in an offering registered under the Securities Act of 1933.Hart & Co.,CPAs,gave an unqualified opinion on McCovey's financial statements that were included in the registration statement filed with the Securities and Exchange Commission.Mays sued Hart under the provisions of the 1933 Act that deal with omission of facts required to be in the registration statement.Mays must prove that
A) there was fraudulent activity by Hart.
B) the financial statements contained a material misstatement.
C) Mays relied on Hart's opinion.
D) Mays was in privity with Hart.

Question

Quizplus · Accepted Answer

Under the Securities Act of 1933, to establish liability for an omission or misstatement in a registration statement, the plaintiff must prove that the financial statements contained a material misstatement or omission. Fraud or reliance does not need to be proven.

Mays Bought McCovey Corp