Question 1

Which state passed the first securities law?

Accepted Answer

A) California 
B) Kansas 
C) New York 
D) Arizona 
A) California 
B) Kansas 
C) New York 
D) Arizona B

Question 2

Section 404 of Sarbanes-Oxley is the section that requires certification of the adequacy of a company's internal controls.

Accepted Answer

A) True 
 B)False  True

Question 3

Ralph Newsome is an employee at Quest Industries. In the men's room he overhears two officers discussing a merger that they say will be announced in two days. Ralph purchases 1,000 shares of Quest. When the merger is announced, Quest's stock has a 15% bounce in value.

Accepted Answer

A) Ralph has engaged in insider trading. 
B) Ralph simply overheard a conversation and can trade on that information. 
C) Ralph is not an officer and can trade in advance of announcements. 
D) None of the above 
A) Ralph has engaged in insider trading. 
B) Ralph simply overheard a conversation and can trade on that information. 
C) Ralph is not an officer and can trade in advance of announcements. 
D) None of the above A

Question 4

A Section 12 violation results from making a material misstatement in a registration statement.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following actions can the SEC take if there is a violation of Section 14 on proxy solicitation?

Accepted Answer

A) An injunction preventing the vote with the proxies 
B) "Unwinding" the election results 
C) Order reimbursement of costs for second solicitation by the party who violated Section 14 
D) The SEC can take any of the above actions. 
A) An injunction preventing the vote with the proxies 
B) "Unwinding" the election results 
C) Order reimbursement of costs for second solicitation by the party who violated Section 14 
D) The SEC can take any of the above actions.

Question 6

Only directors can be held liable for a Section 11 violation.

Accepted Answer

A) True 
 B)False

Question 7

Blue sky laws never allow for a merit review standard; only federal regulations contain that type.

Accepted Answer

A) True 
 B)False

Question 8

A false prospectus is covered under Section 11.

Accepted Answer

A) True 
 B)False

Question 9

Under Sarbanes-Oxley, a company must file an 8-K if it has waived its code of ethics for a financial reporting officer.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not required for the intrastate exemption?

Accepted Answer

A) The investors and issuer must all be residents of the same state. 
B) Of the issuer's income, 100 percent must be earned in its resident state. 
C) Of the issuer's assets, 80 percent must be located in its resident state. 
D) Of the proceeds from the sale, 80 percent must be earned on operations in the state. 
E) All of the above are requirements. 
A) The investors and issuer must all be residents of the same state. 
B) Of the issuer's income, 100 percent must be earned in its resident state. 
C) Of the issuer's assets, 80 percent must be located in its resident state. 
D) Of the proceeds from the sale, 80 percent must be earned on operations in the state. 
E) All of the above are requirements.

Question 11

Why is the definition of "securities" so broad? Can anything be excluded from that definition?

Accepted Answer

The definition is broad to be as encompa

Question 12

Germany and France have eight exchanges each, by far the most outside of the United States.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is not an accredited investor for purposes of Regulation D?

Accepted Answer

A) Any bank 
B) Anyone who certifies that he can afford to lose the investment 
C) A purchaser of $150,000 or more of the securities 
D) Any person with income greater than $150,000 
A) Any bank 
B) Anyone who certifies that he can afford to lose the investment 
C) A purchaser of $150,000 or more of the securities 
D) Any person with income greater than $150,000

Question 14

Shares of stock issued pursuant to a corporate reorganization must be registered.

Accepted Answer

A) True 
 B)False

Question 15

Pump and dump is the act of hyping a stock in order to benefit from a sale once the hype affects the price.

Accepted Answer

A) True 
 B)False

Question 16

Who would be a tippee for purposes of insider trading?

Accepted Answer

A) A janitor who gathers information by reading files on corporate counsel's desk 
B) An MBA student who tracks the market very closely 
C) A broker who once worked in the pharmaceutical industry 
D) All of the above would be tippees. 
A) A janitor who gathers information by reading files on corporate counsel's desk 
B) An MBA student who tracks the market very closely 
C) A broker who once worked in the pharmaceutical industry 
D) All of the above would be tippees.

Question 17

Section 12 violations would include selling before the effective date.

Accepted Answer

A) True 
 B)False

Question 18

Section 10(b)applies to all securities sold in interstate commerce.

Accepted Answer

A) True 
 B)False

Question 19

A tombstone ad:

Accepted Answer

A) is permitted in Regulation D offerings. 
B) is an offer to sell securities. 
C) can be run prior to the effective date of the registration. 
D) All of the above 
A) is permitted in Regulation D offerings. 
B) is an offer to sell securities. 
C) can be run prior to the effective date of the registration. 
D) All of the above

Question 20

Registration statements must include audited financial statements.

Accepted Answer

A) True 
 B)False

Which state passed the first securities law?

Section 404 of Sarbanes-Oxley is the section that requires certification of the adequacy of a company's internal controls.

Ralph Newsome is an employee at Quest Industries. In the men's room he overhears two officers discussing a merger that they say will be announced in two days. Ralph purchases 1,000 shares of Quest. When the merger is announced, Quest's stock has a 15% bounce in value.

A Section 12 violation results from making a material misstatement in a registration statement.

Which of the following actions can the SEC take if there is a violation of Section 14 on proxy solicitation?

Only directors can be held liable for a Section 11 violation.

Blue sky laws never allow for a merit review standard; only federal regulations contain that type.

A false prospectus is covered under Section 11.

Under Sarbanes-Oxley, a company must file an 8-K if it has waived its code of ethics for a financial reporting officer.

Which of the following is not required for the intrastate exemption?

Why is the definition of "securities" so broad? Can anything be excluded from that definition?

Germany and France have eight exchanges each, by far the most outside of the United States.

Which of the following is not an accredited investor for purposes of Regulation D?

Shares of stock issued pursuant to a corporate reorganization must be registered.

Pump and dump is the act of hyping a stock in order to benefit from a sale once the hype affects the price.

Who would be a tippee for purposes of insider trading?

Section 12 violations would include selling before the effective date.

Section 10(b)applies to all securities sold in interstate commerce.

A tombstone ad:

Registration statements must include audited financial statements.

Introduction to Law

Business Ethics and Social Responsibility

The Court System and Dispute Resolution

Business and the Constitution

Administrative Law

International Law

Business Crime

Business Torts

Environmental Regulation and Sustainability

Contracts and Sales: Introduction and Formation

Contracts and Sales: Performance, Remedies, and Rights

Business Marketing and Products: Ads and Product Safety

Business Competition: Antitrust Law

Business and Intellectual Property Law

Agency Law

Governance and Structure: the Law of Business Associations

Business and Employees: Employment Regulation

Business and Employees: Employment Discrimination

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Exam 17: Governance and Regulation: Securities Law

Which state passed the first securities law?

Section 404 of Sarbanes-Oxley is the section that requires certification of the adequacy of a company's internal controls.

Ralph Newsome is an employee at Quest Industries. In the men's room he overhears two officers discussing a merger that they say will be announced in two days. Ralph purchases 1,000 shares of Quest. When the merger is announced, Quest's stock has a 15% bounce in value.

A Section 12 violation results from making a material misstatement in a registration statement.

Which of the following actions can the SEC take if there is a violation of Section 14 on proxy solicitation?

Only directors can be held liable for a Section 11 violation.

Blue sky laws never allow for a merit review standard; only federal regulations contain that type.

A false prospectus is covered under Section 11.

Under Sarbanes-Oxley, a company must file an 8-K if it has waived its code of ethics for a financial reporting officer.

Which of the following is not required for the intrastate exemption?

Why is the definition of "securities" so broad? Can anything be excluded from that definition?

Germany and France have eight exchanges each, by far the most outside of the United States.

Which of the following is not an accredited investor for purposes of Regulation D?

Shares of stock issued pursuant to a corporate reorganization must be registered.

Pump and dump is the act of hyping a stock in order to benefit from a sale once the hype affects the price.

Who would be a tippee for purposes of insider trading?

Section 12 violations would include selling before the effective date.

Section 10(b)applies to all securities sold in interstate commerce.

A tombstone ad:

Registration statements must include audited financial statements.

Introduction to Law

Business Ethics and Social Responsibility

The Court System and Dispute Resolution

Business and the Constitution

Administrative Law

International Law

Business Crime

Business Torts

Environmental Regulation and Sustainability

Contracts and Sales: Introduction and Formation

Contracts and Sales: Performance, Remedies, and Rights

Business Marketing and Products: Ads and Product Safety

Business Competition: Antitrust Law

Business and Intellectual Property Law

Agency Law

Governance and Structure: the Law of Business Associations

Business and Employees: Employment Regulation

Business and Employees: Employment Discrimination

Filters