Which of the following is true of Rule 10b-5?
A)Privity of contract is necessary for filing a lawsuit under this rule.
B)Civil lawsuits are not permitted under this rule.
C)Only purchasers and sellers of securities can sue under this rule.
D)Ordinary negligence is a violation of this rule.

Question

Quizplus · Accepted Answer

Rule 10b-5, promulgated under the Securities Exchange Act of 1934, is designed to protect investors by prohibiting any act or omission resulting in fraud or deceit in connection with the purchase or sale of any security. The rule is specifically applicable to purchasers and sellers of securities, allowing them to sue for damages in cases of fraud.

Which of the Following Is True of Rule 10b-5