To recover damages under section 10 (b) of the securities exchange act and the corresponding sec rule 10b-5, a buyer or seller of a security must prove:

For action brought under Section 10 (b)

1.) There was a material misrepresentation or omission

2.) The plaintiff suffered damages

3.) The plaintiff relied on the fraudulent statement and

4.) existence of scienter

Both 10 (b) and 10b-5 cover registered and unregistered securities, and not just original issuances.