Question

One of the elements necessary to recover damages if there has been a material misstatement in a registration statement filed pursuant to the Securities Act of 1933 is that: issuer and plaintiff were in privity of contract with each other. the plaintiff knew the auditor. there was a material false or misleading statement in the financial statements. issuer failed to exercise due care in connection with the sale of the securities.

Answer 1

One of the elements necessary to recover damages if there has been a material misstatement in a registration statement filed pursuant to the Securities Act of 1933 is that:

there was a material false or misleading statement in the financial statements.

Step-by-step explanation:

A registration statement includes prospectus and other sets of documents, which a company files with the U.S. SEC (Securities and Exchange Commission) during a public offering of its securities. Section 11 of the Securities Act specifically provides that an accountant may be held liable to any purchaser of a security who relies on some materially misstated financial statements included in the registration statement.