Question 1

Shares issued through reorganizations must be registered.

Accepted Answer

A) True 
 B)False

Question 2

The penalties for certification of false financial statements are up to $1 million in fines and/or 10 years.

Accepted Answer

A) True 
 B)False

Question 3

Crowd-funding:​

Accepted Answer

A) is now prohibited under the 1933 Act. 
B) is permitted with escrow holding for Internet portals. 
C) is a theory for prosecution of trading on false information. 
D) is a Rule 505 exemption. 
A) is now prohibited under the 1933 Act. 
B) is permitted with escrow holding for Internet portals. 
C) is a theory for prosecution of trading on false information. 
D) is a Rule 505 exemption.

Question 4

The JOBS act increased the amount of a Regulation A offering to which of the following?​

Accepted Answer

A) $5,000,000 
B) $10,000,000 
C) $50,000,000 
D) $100,000,000 
A) $5,000,000 
B) $10,000,000 
C) $50,000,000 
D) $100,000,000

Question 5

Under Section 14, a shareholder proposal in the proxy materials:

Accepted Answer

A) is limited to 500 words. 
B) must be made by a shareholder who owns at least 5 percent of the outstanding shares of the corporation. 
C) need not be included if management objects. 
D) All of the above 
A) is limited to 500 words. 
B) must be made by a shareholder who owns at least 5 percent of the outstanding shares of the corporation. 
C) need not be included if management objects. 
D) All of the above

Question 6

A tombstone ad can be run before the registration statement is effective.

Accepted Answer

A) True 
 B)False

Question 7

Hawkin and Snead is a partnership located in South Dakota that specializes in documentary films. Hawkin and Snead feel that they need additional capital to expand and their personal assets are fully tapped. The partners envision a sale of common stock shares only to South Dakota residents and they need about $10,000,000. They also realize that their pool of investors is large, but shallow. That is, they can recruit many potential share purchasers, but their investment amounts will be small. They feel they do not have the money for a national offering and full-blown SEC registration. Which of the following exemptions will suit Hawkin and Snead's needs best?

Accepted Answer

A) A Rule 504 offering 
B) A Rule 505 offering 
C) A Regulation A offering 
D) An intrastate offering 
E) None of the above 
A) A Rule 504 offering 
B) A Rule 505 offering 
C) A Regulation A offering 
D) An intrastate offering 
E) None of the above

Question 8

Section 12 violations:

Accepted Answer

A) carry only civil penalties. 
B) carry criminal penalties that are very different from Section 11 penalties. 
C) carry criminal penalties that are the same as Section 11 penalties. 
D) do not exist. 
A) carry only civil penalties. 
B) carry criminal penalties that are very different from Section 11 penalties. 
C) carry criminal penalties that are the same as Section 11 penalties. 
D) do not exist.

Question 9

To which of the following will the 10b prohibitions on insider trading apply?

Accepted Answer

A) An officer exercising stock options on the day before the company announces its earnings for the quarter. 
B) An officer exercising stock options on the day before the company reveals an SEC investigation. 
C) An officer exercising stock options on the day before the company announces an earnings reversal. 
D) An officer's son buying stock on the day before the company announces an earnings increase. 
E) All of the above are violations of 10b. 
A) An officer exercising stock options on the day before the company announces its earnings for the quarter. 
B) An officer exercising stock options on the day before the company reveals an SEC investigation. 
C) An officer exercising stock options on the day before the company announces an earnings reversal. 
D) An officer's son buying stock on the day before the company announces an earnings increase. 
E) All of the above are violations of 10b.

Question 10

Which of the following is not an exempt security under the 1933 Act?

Accepted Answer

A) Municipal bonds 
B) Insurance policies 
C) Promissory notes 
D) Annuities 
E) All of the above are exempt securities. 
A) Municipal bonds 
B) Insurance policies 
C) Promissory notes 
D) Annuities 
E) All of the above are exempt securities.

Question 11

Betty Furnish owns a consignment furniture business that she wishes to expand to several other cities. She does need capital to be able to do so and needs to raise $1 million. Betty says she cannot afford a full SEC registration. Can you offer Betty some suggestions for raising the capital?

Accepted Answer

Betty could try an intrastate offering i

Question 12

Under Section 14, shareholders can make proposals for action in the proxy materials.

Accepted Answer

A) True 
 B)False

Question 13

The intrastate registration exemption requires that 100 percent of the offerees be residents of the same state as the issuer.

Accepted Answer

A) True 
 B)False

Question 14

Under Sarbanes-Oxley, every board audit committee must have at least one financial expert.

Accepted Answer

A) True 
 B)False

Question 15

Who would have standing to bring a civil suit under section 10(b)?

Accepted Answer

A) Purchaser of shares 
B) Contractor with firm who loses business 
C) Person who refrained from buying because of overly pessimistic information 
D) Person who refrained from selling because of overly optimistic information 
E) All of the above 
A) Purchaser of shares 
B) Contractor with firm who loses business 
C) Person who refrained from buying because of overly pessimistic information 
D) Person who refrained from selling because of overly optimistic information 
E) All of the above

Question 16

Lund was the CEO of Verit Co. Lund was contacted by Horowitz, the CEO and Chairman of the Board of P & F. Horowitz told Lund of an opportunity P & F had to buy into a Las Vegas casino. Lund immediately purchased 10,000 shares of P & F. Three days after Lund's purchase, P & F announced its intentions to enter into a joint venture for a Las Vegas casino. Lund was then able to sell his shares for considerable profit. Discuss the propriety of Lund's actions under the 1934 Act.

Accepted Answer

Lund is a tippee. Th

Question 17

Regulation A offerings:

Accepted Answer

A) still require registration. 
B) are available for offerings up to $10 million. 
C) are now part of Regulation D. 
D) None of the above 
A) still require registration. 
B) are available for offerings up to $10 million. 
C) are now part of Regulation D. 
D) None of the above

Question 18

The trend in international markets is away from regulating insider trading.

Accepted Answer

A) True 
 B)False

Question 19

Selling securities before the effective date of the registration statement is a Section 12 violation.

Accepted Answer

A) True 
 B)False

Question 20

While Australia has always been supportive of securities regulation efforts internationally, it does not have an exchange.

Accepted Answer

A) True 
 B)False

Shares issued through reorganizations must be registered.

The penalties for certification of false financial statements are up to $1 million in fines and/or 10 years.

Crowd-funding:

The JOBS act increased the amount of a Regulation A offering to which of the following?

Under Section 14, a shareholder proposal in the proxy materials:

A tombstone ad can be run before the registration statement is effective.

Section 12 violations:

To which of the following will the 10b prohibitions on insider trading apply?

Which of the following is not an exempt security under the 1933 Act?

Betty Furnish owns a consignment furniture business that she wishes to expand to several other cities. She does need capital to be able to do so and needs to raise $1 million. Betty says she cannot afford a full SEC registration. Can you offer Betty some suggestions for raising the capital?

Under Section 14, shareholders can make proposals for action in the proxy materials.

The intrastate registration exemption requires that 100 percent of the offerees be residents of the same state as the issuer.

Under Sarbanes-Oxley, every board audit committee must have at least one financial expert.

Who would have standing to bring a civil suit under section 10(b)?

Regulation A offerings:

The trend in international markets is away from regulating insider trading.

Selling securities before the effective date of the registration statement is a Section 12 violation.

While Australia has always been supportive of securities regulation efforts internationally, it does not have an exchange.

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

Exam 17: Governance and Regulation: Securities Law

Shares issued through reorganizations must be registered.

The penalties for certification of false financial statements are up to $1 million in fines and/or 10 years.

Crowd-funding:​

The JOBS act increased the amount of a Regulation A offering to which of the following?​

Under Section 14, a shareholder proposal in the proxy materials:

A tombstone ad can be run before the registration statement is effective.

Section 12 violations:

To which of the following will the 10b prohibitions on insider trading apply?

Which of the following is not an exempt security under the 1933 Act?

Betty Furnish owns a consignment furniture business that she wishes to expand to several other cities. She does need capital to be able to do so and needs to raise $1 million. Betty says she cannot afford a full SEC registration. Can you offer Betty some suggestions for raising the capital?

Under Section 14, shareholders can make proposals for action in the proxy materials.

The intrastate registration exemption requires that 100 percent of the offerees be residents of the same state as the issuer.

Under Sarbanes-Oxley, every board audit committee must have at least one financial expert.

Who would have standing to bring a civil suit under section 10(b)?

Regulation A offerings:

The trend in international markets is away from regulating insider trading.

Selling securities before the effective date of the registration statement is a Section 12 violation.

While Australia has always been supportive of securities regulation efforts internationally, it does not have an exchange.

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

Crowd-funding:

The JOBS act increased the amount of a Regulation A offering to which of the following?