Ivor and Associates, CPAs, audit the financial statements of Jaymo Corporation.
As a result of Ivor's negligence in conducting the audit, the financial statements include material misstatements.
Ivor was unaware of this fact. The financial statements and Ivor's unqualified opinion are included in a registration statement and prospectus for an original public offering of stock by Jaymo. Thorp purchases shares in the offering. Thorp receives a copy of the prospectus prior to the purchase, but does not read it. The shares decline in value as a result of the misstatements in Jaymo's financial statements becoming known.
Under which of the following Acts is Thorp most likely to prevail in a lawsuit against Ivor?
Securities Act of 1933, Section 11
Securities Exchange Act of 1934, Section 10
(B., Rule 10b-5
A. Yes Yes
B. Yes No
C. No Yes
D. No No