fraudulent conduct - material misstatement or omission materiality - statement or omission will be considered material if there is a substantial likelihood that a reasonable investor would consider it important in making investment decision state of mind (scienter) - must have had an intent to defraud, manipulate, or deceive (negligence is NOT enough); recklessness is sufficient in connection with the purchase or sale of a security by plaintiff in interstate commerce - telephone or mail is enough reliance - plaintiff must have relied on the information when deciding to purchase or sell; in cases based on omissions, reliance presumed if omission material damages - must show defendant's fraud caused the plaintiff's damages transactional causation - did the information cause the transaction loss causation - the cause of the loss must have had something to do with D's information For a private cause of action must show BOTH transactional and loss causation For a 10b-5 violation just need to show that the information was a brach of fiduciary obligation to violate 10b-5 must show there was a breach of duty owed to the corporation