Why is the prospectus important in an IPO? This is a multiple answer question type. There are multiple correct/incorrect answers. Choosing an incorrect answer will result in a grade penalty. For each correct answer you get 1.5-1.9 times the points that you would lose from an incorrect answer. The total score cannot be negative. A. The underwriter can be held legally liable for misrepresentation if it failed to perform a reasonable due diligence investigation B. Prospective investors can use the prospectus as a basis for determining the value of the stock. C. The issuing firm can be held legally liable for misrepresentation D. The Securities and Exchange Commission (SEC) verifies the accuracy of the prospectus during the registration period. E. The prospectus is only distributed to preferred clients of the underwriter