In which of the following ways can an accountant defeat the imposition of liability under Section 18(a)?
A) if he or she can show that the misleading statement was made to protect the company from bankruptcy
B) if he or she had acted out of recklessness
C) if he or she was an employee to the plaintiff
D) if he or she can show that the plaintiff had knowledge of the false statement

Question

Quizplus · Accepted Answer

Under Section 18(a) of the Exchange Act, an accountant can defeat the imposition of liability if he or she can show that the plaintiff had knowledge of the false statement. This defense is known as the "one-on-one conversation" defense, where if the plaintiff had a one-on-one conversation with the defendant and knew or should have known that the statement was false, then the defendant would not be liable. The other choices do not provide valid defenses for defeating liability under Section 18(a).

In Which of the Following Ways Can an Accountant Defeat