Question

Who would have standing to bring a civil suit under section 10(b)? a. purchaser of shares b. contractor with firm who loses business c. person who refrained from buying because of overly pessimistic information d. person who refrained from selling because of overly optimistic information e. all of the above

Answer 1

Answer:

The correct answer is letter "A": purchaser of shares.

Explanation:

Shareholders or investors who purchase shares of a company's stock can file lawsuits for violations of Section 10(b) of the Securities Exchange Act of 1934. These lawsuits are usually raised when the stock price falls and the shareholders allege it is caused because the company has disclosed improper information to the public.  

The plaintiffs must prove that the company made a substantial misstatement or omission with the intention to deceive, manipulate or defraud the purchase or sale of a security.