Dart Corp. engaged Jay Associates, CPAs, to assist in a public stock offering. Jay audited Dart’s financial statements and gave an unqualified opinion, despite knowing that the financial statements contained misstatements. Jay’s opinion was included in Dart’s registration statement. Larson purchased shares in the offering and suffered a loss when the stock declined in value after the misstatements became known.

If Larson succeeds in the Section 10(b) and Rule 10b-5 suit, Larson would be entitled to

  1. Only recover the original public offering price.
  2. Only rescind the transaction.
  3. The amount of any loss caused by the fraud.
  4. Punitive damages.