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Unformatted text preview: See defenses on page 118 SEE LEGAL TERMS ON PAGE 115 CLIENTS UNDER TORT LAW Ordinary negligence / Gross negligence / Fraud Due care OR contributory negligence is best defense THIRD PARTIES UNDER COMMON LAW Primary Beneficiaries – Ultramares v. Touche (PG 119) Primary Beneficiary can sue for ordinary negligence. ALSO FORESEEABLE BENEFICIARIES. LIABILITY UNDER SECURITIES LAW SECURITIES ACT OF 1933 – IPO’S Claim must allege material false or misleading financials Does not have to show reliance Does not have to prove negligence SECURITIES ACT OF 1934 – CENTERS ON AUDITED F/S CONTAINED IN ANNUAL REPORTS OR SUBMITTED TO THE SEC AS PART OF FORM 10-K REPORTS. SECTIONS 10 & 10b-5 ARE CALLED THE ANTIFRAUD PROVISIONS OF THE 34 ACT. SARBANES-OXLEY ACT OF 2002 MINIMIZING THE RISK OF LITIGATION...
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