Exam 43: Securities Regulation

Which of the following is NOT true about private placement exemptions that do not involve any public offering?

The antifraud provisions of the 1934 Act would prohibit which of the following?

The Orange Grove Limited Partnership would like to make an offering of $2 million in limited partnership interests under either Rule 505 or Rule 506 of Regulation D of the Securities Act of 1933.Orange Grove plans to sell to 40 investors,eight of whom have net incomes in excess of $200,000 per year and net worth of more than $2 million.The 40 investors also include five mutual funds and three insurance companies.The other investors to whom Orange Grove plans to sell are not experienced investors.Is either Rule 505 or Rule 506 available to the Orange Grove Partnership?

Bonds are included in the definition of the term "security."

Types of securities that are exempt from registration under the federal securities laws include:

Parties To Go plans to sell $500,000 worth of stock in the next year.This stock will be exempt from registration under Regulation A as long as:

The 1934 Act regulates tender offers and proxy solicitations.

The Wall Street Reform and Consumer Protection Act of 2010:

In 2009,Congress enacted the Investor Protection and Securities Reform Act,which imposes new corporate governance and investor protection rules on privately and publicly held companies.

Rule 10b-5:

There are rigorously enforced restrictions regarding both number and qualification of investors who purchase securities under Regulation A.

Which of the following are exempt transactions for issuers under the 1933 Act?

The registration statement must be signed by:

The SEC may not advance the effective date of a registration statement.

Crowdfunding is exempt from registration requirements,subject to a $1 million cap.

The antifraud provisions of the 1933 Act pertain to both unregistered and registered securities.

The 1933 Securities Act defines the term "security." The courts have generally interpreted the statutory definition to include non-traditional forms of investments.The Supreme Court of the United States has adopted a two-tier analysis of what constitutes a security.Within this analysis the Court has used a three-part test to determine whether a non-traditional financial transaction constitutes an investment contract and thus a security.Explain: (a)the 1933 Act's statutory definition of security, (b)the courts' general interpretation of the 1933 Act's definition and (c)the Supreme Court's two-tier test.

Only the federal government is allowed to regulate the sale of securities.

Recovery of damages under Rule 10b-5 requires proof of:

The Foreign Corrupt Practices Act makes it illegal for an American company to pay money to a foreign official to influence a decision of that person in his official capacity.