1.Which of the following is NOT a requirement for the business judgment rule to apply?

A.The board of directors must make an informed decision.

B.The board of directors must be members of a duly constituted executive committee or shareholder litigation committee.

C.The board of directors must have no conflicts of interest.

D.The board of directors must have a rational basis for believing that their decision is in the best interests of the corporation.

2.In Tricontinental Industries, Inc. v. PricewaterhouseCoopers, LLP, the Court dismissed plaintiff's claims because:

A.Plaintiff failed to plead that defendant acted with scienter.

B.Plaintiff failed to plead that the primary purpose of defendant's client in hiring defendant was to influence or benefit plaintiff.

C.Defendant demonstrated that it had performed a reasonable investigation and had reasonable grounds to believe that the client's financial statements contained no misstatements or omissions of material fact.

D.Plaintiff failed to plead that the transaction at issue involved the sale or purchase of a "security."

3.Luis Rojas purchased the securities of the All-Wet Corporation (AWC), whose stock is traded on the New York Stock Exchange.Rojas believes he lost over $100,000 on those securities after AWC's president subsequently admitted that AWC's financial statements contained net earnings figures which were significantly overstated. Casey Stengel, a certified public accountant, had audited those financial statements and had issued an unqualified opinion that they complied with GAAP. Rojas has now brought an action against Stengel under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5. To succeed, Rojas must prove that:

A.Rojas was a foreseeable user of the financial statements audited by Stengel.

B.Stengel's actions materially aided and abetted the wrongful acts of AWC.

C.Stengel acted with scienter.

D.Rojas was in privity of contract with AWC and/or Stengel.