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Asked by Emily Feasel on May 27, 2024

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For an accountant to be civilly liable under Rule 10b-5, the accountant must have acted with scienter.

Scienter

A legal term that refers to the knowledge of the wrongful nature of one's actions, especially in fraud cases.

Rule 10b-5

A regulation under the Securities Exchange Act of 1934 that prohibits fraud, misrepresentation, and deceit in the trading of securities.

Civilly Liable

A term referring to the responsibility of a person to compensate for losses or damages caused by their actions in a civil lawsuit.

  • Understand the conditions under which an accountant may be civilly or criminally liable.
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CK
chandra kharelMay 31, 2024
Final Answer :
True
Explanation :
Under Rule 10b-5, for an accountant to be civilly liable, they must have acted with scienter, which means they had knowledge of the wrongdoing or were reckless in not knowing, indicating a level of intent or severe recklessness regarding the truth or falsity of their statements or omissions related to the securities transaction.

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