Exam 23: Rules Governing the Issuance and Trading of Securities

Which of the following factors resulted in the federal regulation of securities in Congress?

Diane is the chief executive officer of a U.S.-based pharmaceutical firm. Over the years, she has been purchasing significant amounts of stock in the company. The rejection of the company's new drug, by the FDA, resulted in a huge drop in the company's stock value. Diane knew of the rejection before it was made public and sold her stock. Diane is guilty of .

The Division of supervises investigations and the initiation of injunctive actions.

If a payment is known to violate the FCPA, officers, directors, stockholders, employees, and U.S. agents of a corporation can be fined up to $ .

The Private Securities Litigation Reform Act of 1995 gives the Securities and Exchange Commission cease-and-desist powers and the power to impose substantial monetary penalties in administrative proceedings.

The Securities Exchange Act of 1934 regulates the .

Investors and companies can take advantage of the database, which includes proxy statements, annual corporate reports, and a multitude of other documents that are filed with the SEC.

Shelf registration under the Securities and Exchange Commission's Rule 415 allows .

If a payment is known to violate the FCPA, the corporation can be fined up to $ million.

Describe the Dodd-Frank legislation with regard to credit rating agencies.

Schedule B of the Securities Act of 1933 sets forth disclosure requirements for initial offerings by foreign issuers of stock on U.S. exchanges.

David, the chief executive officer of a bank in the United States, has been embezzling money from the bank's clients. In order to avoid being caught, David destroyed all the financial records. Due to these actions, David can be prosecuted under the .

The Dodd-Frank Act did not deal with executive compensation.

The 1990 Remedies Act allows the federal courts to bar anyone who has violated the fraud provisions of the federal securities laws from ever serving as an officer or director of a publicly held firm.

The 1995 National Securities Markets Improvement Act limited regulation of investment companies to the and did away with some state authority in this area.

Discuss how the Internet affects the marketplace for securities.

The Securities and Exchange Commission (SEC) was created under the Securities Investor Protection Act (SIPA) of 1970.

Which of the following is true of the Securities Litigation Uniform Standards Act of 1998?

The first element of the Howey test requires that the investor enter the transaction with a clear expectation of making a profit on the money invested.

The FCPA is jointly enforced by the and the .