Will Peters prevail on his federal securities-law claims?
. The common stock of Wilson, Inc. is owned by 20 stockholders. Doe & Doe, CPAs audited Wilson's financial statements as of December 31, 2017. The audit firm rendered an unqualified opinion on the financial statements. Relying on Wilson's financial statements, which showed net income for 2017 of $1,500,000, Peters purchased 10,000 shares of Wilson stock for $200,000 on April 10, 2018. Wilson's financial statements contained material misstatements. Because Doe & Doe did not carefully follow professional auditing standards, it did not discover that the statements failed to reflect unrecorded expenses, which reduced Wilson's actual net income to $800,000. After disclosure of the corrected financial statements, Peters sold his shares for $100,000, which was the highest price he could obtain. Peters has brought an action against Doe & Doe under federal securities law and common law.
Answer the following, setting forth reasons for your conclusions:
- Will Peters prevail on his federal securities-law claims?
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