Exam 23: Rules Governing the Issuance and Trading of Securities

The Fed, with the approval of the Financial Stability Oversight Council, has the power to break up large firms and require such firms to increase their reserves against future losses.

The Securities Investor Protection Act of 1970 gives the Securities and Exchange Commission authority to regulate the finances of public investment companies that invest in and trade in securities.

Supreme Motors, a car manufacturer in the U.S., decides to move to Delaware to avoid a hostile takeover bid. Delaware is known to have strong antitakeover laws. Which of the following defense strategies is Supreme Motors using?

The maximum penalty for securities fraud under the Sarbanes-Oxley Act is ________ in prison.

Which of the following is true of the Dodd-Frank Act with regard to regulating executive compensation?

Credit rating agencies evaluated and rated billions in mortgage securities, and both the private sector and governments at all levels relied on these ratings.

Hedge funds larger than $250 million must register with the Securities and Exchange Commission and provide some information as to trades and their individual portfolios.

State securities laws are also referred to as "blue sky" laws.

The Sarbanes-Oxley Act of 2002 requires CEOs and CFOs to certify financial reports.

The Foreign Corrupt Practices Act of 1977 is aimed at ________.

The ________ regulates the trading in securities once they are issued.

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 Market Reform Act of 1990 authorizes the Securities and Exchange Commission to regulate trading practices during ________.

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

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

Describe the criminal penalties under the Sarbanes-Oxley Act of 2002.

During the posteffective period, the registration statement usually becomes effective ________ after it is filed.

________ supervises investigations and the initiation of injunctive actions.

Which of the following is true of the Dodd-Frank Act with regard to derivatives?

The Private Securities Litigation Reform Act of 1995 ________.