Randi, an accountant, includes a false statement in a report for Social Media Marketing, Inc., that is filed with the Securities and Exchange Com?mission. When Theo buys stock in Social Media Marketing and loses money on the investment, he files a suit against Randi, alleging fraud under the 1934 Securities Exchange Act. To avoid liability, Randi can show that she

Question

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To prove fraud under the 1934 Securities Exchange Act, the plaintiff must show that the defendant knowingly made a false statement with the intent to deceive. However, if Randi can show that she was not aware her statement was false at the time it was made, she may be able to avoid liability for fraud. Being an otherwise competent accountant or having intentions to defraud Social Media Marketing or profit on stock trades generally are not relevant in this case.

Randi, an Accountant, Includes a False Statement in a Report