Series 79 practice questionhardDue Diligence Defense
Which type of document review is LEAST likely to provide evidence supporting an underwriter's due diligence defense under Section 11?
- AReview of the issuer’s most recent annual report (10-K)
- BReview of the CEO’s social media posts✓ Correct answer
- CReview of major customer contracts
- DReview of the company’s board minutes
Explanation
Why B — Review of the CEO’s social media posts
Social media posts by the CEO are less reliable as due diligence evidence compared to formal documents. The trap is thinking informal or non-reviewed sources are equivalent to official records.
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