What elements must a plaintiff prove in order to win action under Rule 10b-5 of the Securities Exchange Act of 1934? What was the significance of the outcome of the Ernst & Ernst v. Hochfelder case for auditors\' liability?

accounts were fictitious, and funds pertaining to the firm were used for personal cause in E & E versus H case. Supreme Court gave a judgement on the E & E for negligent behavior. But E & E defended that his behavior did not come under section 10 (b) rule 5. however the fourth element of the section 10(b) - 5 describes that scienter includes gross negligence and reckless behavior of an individual. therefore, the significant outcome was that the lower court made decisions adhering to the Supreme Court. it recognized the behavior, and necessary actions were taken