Matty Is an Employee of ValCom but Doe Not Own

Multiple Choice

Matty is an employee of ValCom but doe not own any ValCom stock. At her five year employment anniversary, she decides to buy 50 shares of a new issue of company stock as a savings plan and afterward receives the signed registration statement.  Because of her employment at ValCom, she recognizes that the statement contains an untrue material fact. Can she sue the auditor?

A) Yes, under Section 11, proof of reliance is usually not required.
B) Yes, if she can prove she would not have bought the stock otherwise.
C) No, because she did not rely on the statement.
D) No, because there is no privity between Matty and the auditor.