Diane prepared a registration for the first issuance of stock of the Ledmar Corporation. Diane took the assignment very seriously and spent a great deal of time preparing the statement. Two years after the statement was filed, the SEC began to
investigate the company and claims that the information in Diane's statement was misleading, because some of the information given to her by the corporation was false. Diane had tried to verify the information, but was not able to do so. An investor is now suing Diane claiming that she violated the 1933 act. Is Diane liable?
Diane will be able to avoid liability by asserting the defense of due diligence. It appears from the facts that she exercised due diligence here. An accountant is not held to a strict liability standard. Because Diane tried to but was unable to verify the information that was given to her, she appears to have been justified in relying upon it.
You might also like to view...
What is the overhead allocated to Product B using activity-based costing?
A) $135,000 B) $175,000 C) $292,500 D) $285,500
Employment, automotive, and real estate ads are the three major categories of ________ advertising.
A. special B. insert C. local display D. classified E. retail
Covore Inc., a start-up firm, receives the majority of the funds it requires to begin its operations from five individuals. In exchange for these funds, each individual receives a share of ownership in the firm. The funds provided to Covore Inc. by the individuals are an example of ________.
A. crowdfunding B. debt C. asset-based lending D. equity investment
Sweet Plantation, Inc. made a written contract with Candy, Inc. whereby Sweet Plantation agreed to supply all of Candy's sugar requirements for the next year at $.25 per pound. A dispute arose as to how much sugar Sweet is to supply. The parol evidence rule will bar Sweet's introduction of evidence concerning the intent of the requirements of Candy.
Answer the following statement true (T) or false (F)