In a leading securities law and CPA liabilities case, the U.S.Supreme Court ruled in 1976 in Hochfelder v.Ernst & Ernst that before CPAs could be held liable for Rule 10b-5 of the Securities Exchange Act of 1934, what would be required to be shown to the court was the auditor's:

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The U.S. Supreme Court ruled in Hochfelder v. Ernst & Ernst that before CPAs could be held liable for Rule 10b-5 of the Securities Exchange Act of 1934, the auditor's knowledge and intent to deceive must be proved. Ordinary or gross negligence or financial gain at the expense of the plaintiff were not sufficient to establish liability under Rule 10b-5.

In a Leading Securities Law and CPA Liabilities Case, the U.S.Supreme