c. A CPA audited the financial statements included in a registration statement for an issuance of securities to the public. If the financial statements contained an omission that caused a purchaser of the securities to sustain damages, the 1. Securities and Exchange Act of 1934 applies. 2. purchaser must prove that (s)he was damaged by the omission, but not negligence, privity or reliance. 3. CPA will be liable only for gross negligence. 4. due diligence defense is not available to the CPA