Exam 8: Securities Law Considerations When Obtaining Venture Financing

In SEC v. Ralston Purina (1953), the U.S. Supreme Court took an important step toward defining a public offering for the purposes of Section 4(2)of the Securities Act of 1933.

It is usually easier to transfer ownership in a proprietorship relative to a corporation.

The efforts to regulate the trading of securities takes place under which of the following securities laws?

Ventures that reach the survival stage of their life cycles and seek first-round financing are typically organized as:

Investor liability in a limited liability company (LLC)is limited to the owners' investments.

Offerings and sales of securities are regulated under the Securities Act of 1933 and state blue-sky laws.

Which of the following statements about registering securities with the SEC is not true?

State securities regulations are referred to as:

Which of the following statements about Regulation A is not true?

SEC Regulation D took effect in 1932 and provides the basis for safe harbor as a private placement.

Which of the following exemptions involves a public, and not a private, offering?

SEC Regulation D requires the registration of securities with the SEC.

The Investment Advisers Act of 1940 provides a definition of an investment company.

Investor liability in a proprietorship or corporation is unlimited.

Which of the following statements about Regulation A is not true?

Regulation A allows for registration exemptions on private security offerings so long as all investors are considered to be financially sophisticated.

The basic types of transaction exemptions from registration with the SEC are:

Security exemptions from registration with the SEC do not include which of the following?

One of the monetary requirements for individuals or natural persons as accredited investors as defined in Rule 501 of Regulation D is individual annual income greater than $500,000.

Accredited investors are specifically protected by the Securities Act of 1933 from investing in unregistered securities issues.