Question 1

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

Accepted Answer

A)  corporations playing off one state against another by limiting their securities sales to states that had less stringent regulations 
B)  corporations' ability to thwart state efforts at regulation rather easily 
C)  securities being easily manipulated by issuers 
D)  the collapse of the stock market in 1929

Question 2

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 .

Accepted Answer

A)  false accounting 
B)  black marketeering 
C)  insider trading 
D)  influence peddling

Question 3

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

Accepted Answer

A)  Market Regulation 
B)  Corporation Finance 
C)  Enforcement 
D)  Investment Management

Question 4

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 $ .

Accepted Answer

A)  25,000 
B)  50,000 
C)  100,000 
D)  1 million

Question 5

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.

Accepted Answer

A) True 
 B)False

Question 6

The Securities Exchange Act of 1934 regulates the .

Accepted Answer

A)  actions of brokers and dealers who trade in securities 
B)  use of public utility and holding companies 
C)  public issuance of bonds 
D)  structure and operation of public investment companies

Question 7

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.

Accepted Answer

A)  NORM 
B)  EDGAR 
C)  MELVIN 
D)  ROGER

Question 8

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

Accepted Answer

A)  a quicker form of registration than would otherwise be permitted under the 1933 Act 
B)  a more thorough examination of a company's registration statement than would otherwise occur under the 1933 Act 
C)  the sale of a limited number of securities prior to registration 
D)  the sale of securities over a period of time rather than immediately

Question 9

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

Accepted Answer

A)  1 
B)  2 
C)  5 
D)  10

Question 10

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

Accepted Answer

The answer of Describe the Dodd-Frank legislation with regard to...

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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 .

Accepted Answer

A)  Securities Act of 1933 
B)  Sarbanes-Oxley Act of 2002 
C)  Foreign Corrupt Practices Act of 1977 
D)  International Securities Enforcement Corporation Act of 1990

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A)  New York Stock Exchange (NYS
E)  
B)  Federal Trade Commission (FT
C)  
C)  Securities and Exchange Commission (SE
C)  
D)  Federal Reserve Board (FR
B)

Question 16

Discuss how the Internet affects the marketplace for securities.

Accepted Answer

The answer of Discuss how the Internet affects the marketplace...

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A)  It is a safe harbor from liability for companies that make statements to the public about future risk factors. 
B)  It gives the Securities and Exchange Commission cease-and-desist powers and the power to impose substantial monetary penalties in administrative proceedings. 
C)  It is an amendment to the Private Securities Litigation Reform Act of 1995. 
D)  It sets national standards for securities class action lawsuits involving nationally traded securities.

Question 19

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.

Accepted Answer

A) True 
 B)False

Question 20

The FCPA is jointly enforced by the and the .

Accepted Answer

A)  United Nations; FTC 
B)  U.S. Justice Department; SEC 
C)  U.S. Department of Commerce; FTC 
D)  Department of Homeland Security; SEC

Exam 23: Rules Governing the Issuance and Trading of Securities

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

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 .