Under the provisions of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, which of the following activities must be proven by a stock purchaser in a suit against a CPA?
I.
Intentional conduct by the CPA designed to deceive investors.
Choice "D" is correct. Under Rule 10b-5, a purchaser must prove scienter (either an intent to deceive or gross negligence, which is the reckless disregard for the truth); negligence is insufficient to establish scienter.
