What would be Nixon best defense to such an action

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Question - Nixon & Co., CPAs, issued an unmodified opinion on the 2015 financial statements of Madison Corp. these financial statements were included in Madison's annual report and Form 10-K filed with the SEC. Nixon did not detect material misstatements in the financial statements as a result of negligence in the performance of the audit. Based upon the financial statements, Harry Corp. purchased stock in Madison. Shortly thereafter, Madison became insolvent, causing the price of the stock to decline drastically. Harry has commenced legal action against Nixon for damages based upon Section 10 (b) and Rule 10b-5 of the Securities Exchange Act of 1934. What would be Nixon's best defense to such an action? Explain.

Reference no: EM133062732

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