When bringing suit against auditors under section 10(b)of the Securities Exchange Act of 1934,plaintiffs must allege and prove
A) the financial statements in the offering registration filing contained a material misstatement.
B) auditors were aware of material misstatements in the financial statements.
C) auditors were guilty of ordinary negligence and failed to discover material misstatements in the financial statements.
D) the plaintiffs purchased the specific securities through a public offering and thus have a right to sue.

Question

Quizplus · Accepted Answer

Under section 10(b) of the Securities Exchange Act of 1934, plaintiffs must prove that auditors acted with scienter, meaning they were aware of material misstatements or acted with reckless disregard for the truth.

When Bringing Suit Against Auditors Under Section 10(b)of the Securities