Question

Fast Auditors prepared audited financial statements for Mega Company's registration statement in compliance with the 1933 Securities Act. John bought stock in Mega Company. It was discovered that the financial statements prepared for the registration statement contained some important omissions. John sued Fast Auditors to recover his investment when Mega Company turned out to be a bad investment. What must John prove to recover from Fast Auditors

Answer 1

As per the Securities Act of 1933, John must prove only that the registration statement contained some important omissions

Step-by-step explanation:

The Securities Act of 1933 also known as the "Truth in Securities" law. This law requires that companies have to submit information to the investors about the securities being offered for public sale.

It was the first major federal securities law passed.

President Roosevelt stated that the law was aimed at correcting some of the wrongdoings included insider trading, the sale of fraudulent securities, and other wrongdoings that some financial institutions and professional stock traders engaged in.

In the given question,

John must prove only that the registration statement contained some important omissions as per the Securities Act of 1933