Negligence is an important element of Rule 10b-5 violation.

Name: Negligence is an important element of Rule 10b-5 violation.
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Negligence is not a required element for a Rule 10b-5 violation. The four required elements are: (1) a material misstatement or omission; (2) made with scienter (intent to deceive or reckless disregard for the truth); (3) in connection with the purchase or sale of securities; and (4) that the plaintiff's reliance on the misstatement or omission caused their financial loss.

Negligence Is an Important Element of Rule 10b-5 Violation