In an action alleging securities fraud--including insider trading--the SEC (Securities Exchange Commission) must prove the element of scienter, which is best described as which of the following? Proof that the defendant's alleged misrepresentation or omission was material. Proof that the defrauded investor actually relied on a misrepresentation or omission by the defendant. O Proof that the defendant intended that the defrauded investor rely upon his misrepresentations, or that he knew that the investor likely would. None of the above. Question 5 True or False? The federal securities laws recognize a general duty among all participants to forego transactions based on material, nonpublic information. True. O False. Question 6 In the watershed insider trading case Chiarella v. United States, the Supreme Court reached which of the following legal conclusions? O That the employee of the printing company was liable per se (automatically) because he traded on material, nonpublic information. O That the employee was liable for insider trading because he used information clearly marked as confidential in the documents provided to the printer. O That the employee was not liable for insider trading because he owed no duty of confidentiality to the company being acquired by the printing company's client. O None of the above.