Meri,an accountant,includes a false statement in a report for Novelty Paper Products,Inc.(NPPI)that is filed with the Securities and Exchange Com?mission.When Otho buys stock in NPPI and loses money on the investment,he files a suit against Meri,alleging fraud under the 1934 Securities Exchange Act.To avoid liability,Meri can show that she

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Meri's intent is not relevant in this case. Otho can still sue her for fraud if he relied on her false statement and suffered losses. However, if Meri can show that she was not aware her statement was false, she may be able to avoid liability under the 1934 Securities Exchange Act's scienter requirement, which requires a showing of intent or recklessness.

Meri,an Accountant,includes a False Statement in a Report for Novelty