Choice "D" is correct. A defendant is liable under rule 10b-5 if the defendant either: (i) intentionally makes a misstatement in connection with the purchase or sale of stock or (ii) recklessly disregards the truth with respect to a statement in connection with the purchase or sale or stock and the plaintiff justifiably relies on the misstatement and suffers a loss. Here, Jay, knowing that the financial statements included material misstatements, intentionally gave an unqualified opinion. Thus, if the purchaser relied on the misstatements, Jay will be liable.Choice "c" is incorrect. Rule 10b-5 prohibits fraud or constructive fraud in the purchase of sale of stock. The rule does not impose liability for mere negligence.
Choice "a" is incorrect. Rule 10b-5 has no minimum liability threshold.
Choice "b" is incorrect. Rule 10b-5 liability can arise both from false statements of material fact and from omissions of material statements necessary to make statements made not misleading.