Question 1

Shelf registrations allow issuers to respond more quickly to market conditions,but the provision allowing it does not apply to all companies.

Accepted Answer

A) True 
 B)False

Question 2

Emilio paid $500,000 for the purchase of a franchise in a new professional soccer league.The franchise is in the form of a limited partnership under which Emilio is not permitted to actively participate in the management of the team.The promoters of the league are to do all of the management and to make all of the decisions regarding that management.Emilio will receive 15% of all gate receipts and revenue generated from the sale of licensed items such as jackets and coffee mugs.Is the franchise a security within the meaning of the federal securities laws?

Accepted Answer

The franchise fits the definition of a s

Question 3

A securities issuer that has reported continuously under the 1934 Act for at least three years is a(n):

Accepted Answer

A)  well-known seasoned issuer. 
B)  seasoned issuer. 
C)  unseasoned issuer. 
D)  None of these. 
A)  well-known seasoned issuer. 
B)  seasoned issuer. 
C)  unseasoned issuer. 
D)  None of these.

Question 4

In an election of directors,solicitations of proxies by a person other than the issuer must include an annual report with a written proxy statement.

Accepted Answer

A) True 
 B)False

Question 5

If a lawyer were being held liable for a misstatement in a registration statement,her defense(s)would be:

Accepted Answer

A)  she was only following directions. 
B)  she had reasonable grounds to believe,and did believe,her information was true. 
C)  she was under duress of a threat of loss of her job if she did not agree with the statement. 
D)  None of these would be valid defenses. 
A)  she was only following directions. 
B)  she had reasonable grounds to believe,and did believe,her information was true. 
C)  she was under duress of a threat of loss of her job if she did not agree with the statement. 
D)  None of these would be valid defenses.

Question 6

"Shelf registrations" allow delayed sales of stock.

Accepted Answer

A) True 
 B)False

Question 7

A defense to an action based on untrue statements contained in a registration statement is:

Accepted Answer

A)  innocent mistake. 
B)  due diligence. 
C)  constructive disclosure. 
D)  reasonable diligence. 
A)  innocent mistake. 
B)  due diligence. 
C)  constructive disclosure. 
D)  reasonable diligence.

Question 8

Micah buys a share of Betsy's Pizza,which is unregistered.If it was not exempt from registration,Micah may return the stock and get his money back.

Accepted Answer

A) True 
 B)False

Question 9

Every registration filed with the SEC is held in confidence until the business permits disclosure.

Accepted Answer

A) True 
 B)False

Question 10

If Terry makes tender offer to the owners of Pizza Village registered stock,he must file a statement with the SEC if he:

Accepted Answer

A)  owns 1% of Pizza Village stock. 
B)  will,after the acquisition,own 5% of all Pizza Village stock. 
C)  will,after the acquisition,own more than 5% of one class of Pizza Village voting stock. 
D)  will own more than half the stock in all classes. 
A)  owns 1% of Pizza Village stock. 
B)  will,after the acquisition,own 5% of all Pizza Village stock. 
C)  will,after the acquisition,own more than 5% of one class of Pizza Village voting stock. 
D)  will own more than half the stock in all classes.

Question 11

Under Rule 505,the issuer must:

Accepted Answer

A)  not advertise. 
B)  restrict the offering to thirty-five persons. 
C)  limit the offering to $1 million. 
D)  sell only to "accredited investors." 
A)  not advertise. 
B)  restrict the offering to thirty-five persons. 
C)  limit the offering to $1 million. 
D)  sell only to "accredited investors."

Question 12

The Securities Act of 1933 has two basic objectives,one of which is to:

Accepted Answer

A)  extend protection to investors trading in securities that are already issued and outstanding. 
B)  grant the SEC power to impose administrative,civil penalties up to $500,000. 
C)  regulate disclosure requirements on publicly held corporations. 
D)  prohibit misrepresentation,deceit,and other fraudulent acts and practices in the sale of securities generally,whether or not they are required to be registered. 
A)  extend protection to investors trading in securities that are already issued and outstanding. 
B)  grant the SEC power to impose administrative,civil penalties up to $500,000. 
C)  regulate disclosure requirements on publicly held corporations. 
D)  prohibit misrepresentation,deceit,and other fraudulent acts and practices in the sale of securities generally,whether or not they are required to be registered.

Question 13

Under the 1934 Act:

Accepted Answer

A)  criminal sanctions may be imposed on any person who willfully violates any provision of the Act (except the antibribery provision)or the SEC rules promulgated pursuant to the Act. 
B)  criminal sanctions may not be imposed. 
C)  conviction of an individual may result in imprisonment for up to 25 years. 
D)  a person who proves he had no knowledge of the rule is still subject to imprisonment. 
A)  criminal sanctions may be imposed on any person who willfully violates any provision of the Act (except the antibribery provision)or the SEC rules promulgated pursuant to the Act. 
B)  criminal sanctions may not be imposed. 
C)  conviction of an individual may result in imprisonment for up to 25 years. 
D)  a person who proves he had no knowledge of the rule is still subject to imprisonment.

Question 14

Rule 10b-5 applies to:

Accepted Answer

A)  any purchase or sale of any security. 
B)  only the purchase or sale of securities registered under the 1934 Act. 
C)  only publicly traded securities. 
D)  only securities that are involved in a secondary distribution. 
A)  any purchase or sale of any security. 
B)  only the purchase or sale of securities registered under the 1934 Act. 
C)  only publicly traded securities. 
D)  only securities that are involved in a secondary distribution.

Question 15

A writing signed by a shareholder,granting authority to another to vote the signer's stock at a specified shareholder meeting is a:

Accepted Answer

A)  tender offer. 
B)  short-term commercial paper. 
C)  registration. 
D)  proxy. 
A)  tender offer. 
B)  short-term commercial paper. 
C)  registration. 
D)  proxy.

Question 16

The Securities Enforcement Remedies and Penny Stock Reform Act of 1990 granted the SEC power:

Accepted Answer

A)  to issue cease-and-desist orders. 
B)  to impose civil penalties up to $1,000,000. 
C)  to bring civil actions for specified violations of the 1934 Act against aiders and abettors. 
D)  All of these. 
A)  to issue cease-and-desist orders. 
B)  to impose civil penalties up to $1,000,000. 
C)  to bring civil actions for specified violations of the 1934 Act against aiders and abettors. 
D)  All of these.

Question 17

The Securities Exchange Act of 1934 primarily deals with secondary transactions in stock.

Accepted Answer

A) True 
 B)False

Question 18

The 1933 Securities Act differs from the 1934 Act in that the latter deals with issuing stock and the former has to do with trading stock that has already been issued.

Accepted Answer

A) True 
 B)False

Question 19

The SEC's computer system that performs automated collection,validation,indexing,acceptance,and dissemination of reports required to be filed with the SEC is known as:

Accepted Answer

A)  SEC-ELS. 
B)  ELMER. 
C)  EDGAR. 
D)  EDMOND. 
A)  SEC-ELS. 
B)  ELMER. 
C)  EDGAR. 
D)  EDMOND.

Question 20

SEC rules concerning fraud in securities transactions apply to:

Accepted Answer

A)  the issuance or sale of all securities,even those exempted by the 1933 Act. 
B)  only securities registered under the 1934 Act. 
C)  only securities registered under the 1933 Act. 
D)  only publicly traded securities. 
A)  the issuance or sale of all securities,even those exempted by the 1933 Act. 
B)  only securities registered under the 1934 Act. 
C)  only securities registered under the 1933 Act. 
D)  only publicly traded securities.

Exam 43: Securities Regulation

Shelf registrations allow issuers to respond more quickly to market conditions,but the provision allowing it does not apply to all companies.

A securities issuer that has reported continuously under the 1934 Act for at least three years is a(n):

In an election of directors,solicitations of proxies by a person other than the issuer must include an annual report with a written proxy statement.

If a lawyer were being held liable for a misstatement in a registration statement,her defense(s)would be:

"Shelf registrations" allow delayed sales of stock.

A defense to an action based on untrue statements contained in a registration statement is:

Micah buys a share of Betsy's Pizza,which is unregistered.If it was not exempt from registration,Micah may return the stock and get his money back.

Every registration filed with the SEC is held in confidence until the business permits disclosure.

If Terry makes tender offer to the owners of Pizza Village registered stock,he must file a statement with the SEC if he:

Under Rule 505,the issuer must:

The Securities Act of 1933 has two basic objectives,one of which is to:

Under the 1934 Act:

Rule 10b-5 applies to:

A writing signed by a shareholder,granting authority to another to vote the signer's stock at a specified shareholder meeting is a:

The Securities Enforcement Remedies and Penny Stock Reform Act of 1990 granted the SEC power:

The Securities Exchange Act of 1934 primarily deals with secondary transactions in stock.

The 1933 Securities Act differs from the 1934 Act in that the latter deals with issuing stock and the former has to do with trading stock that has already been issued.

The SEC's computer system that performs automated collection,validation,indexing,acceptance,and dissemination of reports required to be filed with the SEC is known as:

SEC rules concerning fraud in securities transactions apply to:

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

A: Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance,breach,and Discharge

Contract Remedies

Relationship of Principal and Agent

Relationship With Third Parties

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits,collections,and Funds Transfers

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature,formation,and Powers

Financial Structure

Management Structure

Fundamental Changes

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Consumer Protection Double

Employment Law

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property,property Insurance,bailments,and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

Legal Terminology: Understanding Criminal and Civil Law Systems

Contract Law Terminology

Exploring the Legal Concepts of Agency and Fiduciary Duty

Understanding Key Legal Concepts in Sales and Contracts

Understanding the Terminology of Banking and Finance: Key Concepts and Definitions

Exploring Legal Concepts and Processes in Business Partnerships

Understanding Corporate Law: A Guide to Ultra Vires Acts, Subscribers, Debt Securities, and More

Understanding Key Terms in Secured Transactions and Bankruptcy Law

Legal Topics and Terms

Legal Topics in Property Ownership and Management