Attorneys Only: Answer this Question
A fortune 500 CFO admits to having deliberately treated $4 billion in operating expenses as assets, thereby allowing the corporation to show profits instead of losses, The auditor never detected this. The corps stock dropped 95% and bond covenants related to billions in debt are breached. At its peak price last year, the CFO sold stock acquired through stock options for $15 million, generating a $10 million gain.
What provision(s) of the securities law will probably be the basis for a class-action lawsuit by stockholders?