Under Rule 10b-5 of the Securities Act of 1934, _____.

Question

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Under Rule 10b-5 of the Securities Act of 1934 the plaintiff must prove that the accountant acted with scienter. The popularity of Rule 10b-5 among plaintiffs is somewhat diminished by the requirement that something more than negligence must be shown to make a defendant liable for damages. That something more was scienter. This means that there must have been an intentional or at least knowing misrepresentation before the accountant can be found liable under Rule 10b-5.