20. Auditors have greater liability under the Securities Act of 1933 than under either common law or the Securities Exchange Act of 1934, which of the following is an explanation for this greater liability? a. The auditor is liable for treble damages under the Securities Act of 1933. b. The plaintiff does not have to prove that the financial statements were misstated . The plaintiff does not have to prove that they relied on the financial statements d. The plaintiff does not have to prove that damages were suffered. 21. In order to prevail against auditors under the Securities Exchange Act of 1934, the plaintiff must prove the auditor acted in such a manner as to: a. Breach the terms of the engagement letter b. Violate the AICPA Code of Conduct c. Demonstrate intention to deceive (scienter) d. Demonstrate ordinary negligence during the audit examination 22. Securities intermediaries often act in multiple capacities. Broker-dealers as well as mutual finds give investment advice; Investment funds as well as broker-dealers buy and sell securities Which one of the following is NOT correct a. Broker-dealers that give investment advice and do not receive special compensation for b. Mutual funds, private equity funds and hedge funds are investment pools in which c. Fund advisers who manage registered mutual funds must register as "investment d. Fund advisers who manage unregistered private funds do not have to register as "fund the advisory services are exempt from regulation as investment advisors investors entrust their money to professional fund management advisers" with the SEC advisers" with the SEC 23. Broker-dealers who participate in public offerings have many responsibilities under the Securities Act of 1933 and should follow specific guidelines. Which of the following is NOT correct The trading practice rules prohibit price stabilization activities during public distribution as this is deemed to constitute price manipulation FINRA views as excessive any underwriting compensation that is above 20 percent The amount of securities taken by the underwriter should not exceed 10 percent of the offered securities Underwriters cannot divert hot IPOs to venture capitalists who might later send future business to the company, so called "spinning a. b. c. d. 24. Congress took an integrated approach to the matter of whistle-blowing by prohibiting retaliation against whistleblowers and encouraging the act of whistle-blowing under which act? a. b. c. d. The Sarbanes-Oxley Act The Private Securities Litigation Reform Act False Claims Act of 1963 Federal Sentencing Guidelines Act