Quincy bought Teal Corp. common stock in an offering registered under the Securities Act of 1933. Worth & Co., CPAs, gave an unqualified opinion on Teal’s financial statements that were included in the registration statement filed with the SEC. Quincy sued Worth under the provisions of the 1933 Act that deal with omission of facts required to be in the registration statement. Quincy must prove that

  1. There was fraudulent activity by Worth.
  2. There was a material misstatement in the financial statements.
  3. Quincy relied on Worth’s opinion.
  4. Quincy was in privity with Worth.