In a standard open-market transaction where a loss results from an illegal act by management, the seller must have been aware of the fraudulent nature of the investment for there to be criminal intent. The transaction may qualify for this treatment if a broker makes reckless statements or circulates half-truths, false opinions or predictions. If a broker recommends the purchase, sale or exchange of any security, he or she generally is required to have reasonable grounds for believing that recommendation is appropriate for that client.