Which of the following statements about the Securities Act of 1933 is not true?
A) The plaintiff must prove damages or an economic loss.
B) The plaintiffs must prove they read and relied upon the financial statements.
C) Any purchaser of securities may sue auditors.
D) The plaintiffs need not prove that the materially misstated financial statements are the direct cause of the loss.

Question

Quizplus · Accepted Answer

The statement "The plaintiffs must prove they read and relied upon the financial statements" is not true. Under the Securities Act of 1933, a plaintiff may recover damages without proving reliance on the financial statements. This is known as strict liability, where the mere act of issuing materially misstated financial statements is enough to make the issuer liable.

Which of the Following Statements About the Securities Act of 1933