Fact Pattern 22-1 Rodney Is Unhappy Because Stock He Recently Purchased Pursuant to Purchased

Multiple Choice

Fact pattern 22-1
Rodney is unhappy because stock he recently purchased pursuant to an initial public offering has lost value.He would like to get his money back.While he has not real basis for believing that the issuance of stock was illegal,he believes that if he sues,his money will be returned because that would be less expensive than litigation.He decides that his best bet is to sue the issuer in federal court under Section 12 of the 1933 Act alleging that the securities he purchased were offered without an effective registration statement and by mean dos a noncomplying prospectus.He consults,Benny,a recent law school graduate who just passed the bar,regarding his plan.Benny really needs to make some money and is considering filing a lawsuit for Rodney.Benny figures that if the plan does not work,he can always just drop the lawsuit.
-Refer to fact pattern 22-1.What concerns should Rodney have regarding expenses of the litigation?

A) His only expense should be hiring Benny which should be fairly low since Benny is a recent graduate.
B) In addition to the expense of hiring Benny,he would have to pay a nonrefundable fee of $500 that is charged by federal law for instituting securities litigation.
C) In addition to the expense of hiring Benny,he would have to pay a nonrefundable fee of $1,000 that is charged by federal law for instituting securities litigation.
D) If the judge rules that the action was brought for an improper purpose,he could be charged with paying the defendant's attorneys fees and costs incurred in the case.