• Negligence
  1. A duty of care existed.
  2. That duty of care was breached.
  3. The injury was proxmately caused by the defendant's breach of the duty of care.
  4. The plaintiff suffered an injury.
• Fraud
  1. misrepresentation of a material fact
  2. intent to deceive or reckless disregard for the truth(constructive knowledge)=scienter
  3. justifiable reliance by the injured party
  4. innocent party is injured

	Client	Known Party	Foreseen Party	Foreseenable Party
Breach of Contract	Yes	Yes	No	No
Negligence	Yes	Yes	Yes	No
Gross Negligence	Yes	Yes	Yes	Yes
Fraud	Yse	Yes	Yes	Yes

	Known Party	Foreseen Party	Foreseenable Party
Ultramares Rule	Liable	Not Liable	Not Liable
Restatement second	Liable	Liable	Not Liable

Plaintiff's Burden of Proof

	Gross negligence	Fraud
Privity of Contract	No	No
Reliance	Yes	Yes
Negligence	No	No
Material misstatements of facts	Yes	Yes
Deceive	No	Yes
Reckless	Yes	No
Loss	Yes	Yes

Burden of proof

	1933 Act Section 11	1934 Act Rule 10b-5 Fraud	1934 Act Section 18 Negligence
Purchaser	Yes	Yes	Yes
Damages	Yes	Yes	Yes
Material misrepresentation	Yes	Yes	Yes
Reliance on Reports	No	Yes	Yes
Scienter	No	Yes	No

Defense

	1933 Act Section 11	1934 Act Rule 10b-5 Fraud	1934 Act Section 18 Negligence
Due diligence	Yes	No	No
Good faith	No	No	Yes
Plantiff knows material misrepresentation	Yes	Yes	Yes
Lack of causation	Yes	Yes	Yes

Common law liabilities	Actual Damages	Punitive Damages
Breach of Contract	Yes	No
Negligence	Yes	No
Gross negligence	Yes	Maybe
Fraud	Yes	Yes

1933 Acts	Securities Act
1934 Acts	Securities Exchange Act

• Accountant's Liabilities
  • Civil Liabilities

    "mislead" presentation or "material misstatements or omissions"

  • Criminal Liabilities

    "intentionally misrepresentation"

• Burden of proof