Question 1

Issuers with offerings exceeding $100,000 must file a(n)________ with the SEC.

Accepted Answer

The answer of Issuers with offerings exceeding $100,000 must file...

Question 2

An offering circular must be provided to the investors immediately after the purchase of a Regulation A offering.

Accepted Answer

A) True 
 B)False

Question 3

The ________ is a federal statute that primarily regulates the issue of securities by companies and other businesses.

Accepted Answer

Securities

Question 4

Blue-sky laws are state laws that regulate the issuance and trading of securities.

Accepted Answer

A) True 
 B)False

Question 5

The ________ is a federal statute that permits the SEC to obtain a civil penalty of up to three times the illegal benefits received from insider trading.

Accepted Answer

A)  Securities Act 
B)  Securities Exchange Act 
C)  Insider Trading Sanctions Act 
D)  SEC Rule 506 
A)  Securities Act 
B)  Securities Exchange Act 
C)  Insider Trading Sanctions Act 
D)  SEC Rule 506

Question 6

Which of the following best defines an initial public offering?

Accepted Answer

A)  the issuance of an offering statement to the public prior to purchase 
B)  the filing of a registration statement by an issuer 
C)  the disclosure document released for public scrutiny 
D)  the sale of securities by an issuer to the public 
A)  the issuance of an offering statement to the public prior to purchase 
B)  the filing of a registration statement by an issuer 
C)  the disclosure document released for public scrutiny 
D)  the sale of securities by an issuer to the public

Question 7

A(n)________ is an exemption from registration which states that securities transactions not made by an issuer, an underwriter, or a dealer do not have to be registered with the SEC.

Accepted Answer

A)  intrastate offering exemption 
B)  private placement exemption 
C)  regulation A offering 
D)  nonissuer exemption 
A)  intrastate offering exemption 
B)  private placement exemption 
C)  regulation A offering 
D)  nonissuer exemption

Question 8

Which of the following is true of Section 24 of the Securities Act of 1933?

Accepted Answer

A)  It imposes civil liability on any person who violates the provisions of Section 5 of the act. 
B)  It imposes criminal liability on any person who willfully violates the 1933 act or the rules or regulations adopted. 
C)  It imposes civil liability on persons who intentionally defraud investors by making misrepresentations of material facts in the registration statement. 
D)  It exclusively regulates the sale of securities online. 
A)  It imposes civil liability on any person who violates the provisions of Section 5 of the act. 
B)  It imposes criminal liability on any person who willfully violates the 1933 act or the rules or regulations adopted. 
C)  It imposes civil liability on persons who intentionally defraud investors by making misrepresentations of material facts in the registration statement. 
D)  It exclusively regulates the sale of securities online.

Question 9

The sale of securities by an issuer to the public is known as an initial public offering.

Accepted Answer

A) True 
 B)False

Question 10

________ permits issuers to sell up to $5 million of securities to the public during a 12-month period, pursuant to a simplified registration process.

Accepted Answer

A)  SEC Rule 506 
B)  Section 12 of the Securities Act of 1933 
C)  Section 5 of the Securities Act of 1934 
D)  Regulation A 
A)  SEC Rule 506 
B)  Section 12 of the Securities Act of 1933 
C)  Section 5 of the Securities Act of 1934 
D)  Regulation A

Question 11

The Securities Act of 1933 is a federal statute that primarily regulates the issue of securities by companies and other businesses.

Accepted Answer

A) True 
 B)False

Question 12

EDGAR is the world's largest electronic securities exchange.

Accepted Answer

A) True 
 B)False

Question 13

________ requires securities offered to the public through the use of the mails or any facility of interstate commerce to be registered with the SEC by means of a registration statement and an accompanying prospectus.

Accepted Answer

A)  Section 24 of the Securities Act of 1933 
B)  Section 12 of the Securities Act of 1933 
C)  Section 5 of the Securities Act of 1933 
D)  SEC Rule 506 
A)  Section 24 of the Securities Act of 1933 
B)  Section 12 of the Securities Act of 1933 
C)  Section 5 of the Securities Act of 1933 
D)  SEC Rule 506

Question 14

Which of the following is true of Small Company Offering Registration (SCOR)form?

Accepted Answer

A)  SCOR forms can only be used for raising more than $1 million through sale of securities. 
B)  SCOR forms are available to both domestic and foreign companies. 
C)  SCOR forms that have been completed act as the offering circular for potential investors. 
D)  SCOR forms have to be completed by the issuee before purchasing securities. 
A)  SCOR forms can only be used for raising more than $1 million through sale of securities. 
B)  SCOR forms are available to both domestic and foreign companies. 
C)  SCOR forms that have been completed act as the offering circular for potential investors. 
D)  SCOR forms have to be completed by the issuee before purchasing securities.

Question 15

The ________ is a federal statute primarily designed to prevent fraud in the trading of securities after they are issued.

Accepted Answer

A)  Securities Act of 1933 
B)  Securities Exchange Act of 1934 
C)  Sarbanes-Oxley Act of 2002 
D)  Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 
A)  Securities Act of 1933 
B)  Securities Exchange Act of 1934 
C)  Sarbanes-Oxley Act of 2002 
D)  Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010

Question 16

Who among the following is considered a statutory insider?

Accepted Answer

A)  Sharon Muller, an editor who was tipped by her friend to buy shares of KYU Corp. 
B)  Robert Morgan, a government employee who owns ten percent of all equity security of KYU Corp. 
C)  Jim Downey, a graphics engineer who quit KYU Corp. after five years of service 
D)  Kate Harris, a legal consultant to KYU Corp. 
A)  Sharon Muller, an editor who was tipped by her friend to buy shares of KYU Corp. 
B)  Robert Morgan, a government employee who owns ten percent of all equity security of KYU Corp. 
C)  Jim Downey, a graphics engineer who quit KYU Corp. after five years of service 
D)  Kate Harris, a legal consultant to KYU Corp.

Question 17

Scissorwire Inc. sells shares of its stock to the public, with each share valued at $16. After a year, the company incurs a loss and the price of the stock drops to $5. The company reveals that it had deliberately not registered with the SEC before going public and that it has no money to pay the investors. Which of the following holds well in this context?

Accepted Answer

A)  Scissorwire Inc. can register with the SEC at any point after the dip in shares. 
B)  The U.S. government can file a criminal lawsuit against Scissorwire Inc. to seek criminal penalties. 
C)  The investors have been negligent in not verifying registration before purchase of shares and cannot rescind their purchase. 
D)  Scissorwire Inc. is liable for the violation of the Securities Exchange Act of 1934. 
A)  Scissorwire Inc. can register with the SEC at any point after the dip in shares. 
B)  The U.S. government can file a criminal lawsuit against Scissorwire Inc. to seek criminal penalties. 
C)  The investors have been negligent in not verifying registration before purchase of shares and cannot rescind their purchase. 
D)  Scissorwire Inc. is liable for the violation of the Securities Exchange Act of 1934.

Question 18

Rule 506-known as the private placement exemption-allows issuers to raise capital from an unlimited number of ________ without having to register the offering with the SEC.

Accepted Answer

accredited

Question 19

Which of the following is true of registration statements?

Accepted Answer

A)  A registration statement must be accompanied by financial statements certified by certified public accountants.. 
B)  A registration statement once submitted, cannot be amended. 
C)  The SEC judges the merits of the securities based on the registration statement. 
D)  The registration statement need not reveal how a company plans on using the proceeds from the offering. 
A)  A registration statement must be accompanied by financial statements certified by certified public accountants.. 
B)  A registration statement once submitted, cannot be amended. 
C)  The SEC judges the merits of the securities based on the registration statement. 
D)  The registration statement need not reveal how a company plans on using the proceeds from the offering.

Question 20

SEC Rule 506 is known as the ________.

Accepted Answer

A)  nonissuer exemption 
B)  intrastate offering exemption 
C)  private placement exemption 
D)  interstate offering exemption 
A)  nonissuer exemption 
B)  intrastate offering exemption 
C)  private placement exemption 
D)  interstate offering exemption

Exam 17: Investor Protection, E-Securities, and Wall Street Reform

Issuers with offerings exceeding $100,000 must file a(n)________ with the SEC.

An offering circular must be provided to the investors immediately after the purchase of a Regulation A offering.

The ________ is a federal statute that primarily regulates the issue of securities by companies and other businesses.

Blue-sky laws are state laws that regulate the issuance and trading of securities.

The ________ is a federal statute that permits the SEC to obtain a civil penalty of up to three times the illegal benefits received from insider trading.

Which of the following best defines an initial public offering?

A(n)________ is an exemption from registration which states that securities transactions not made by an issuer, an underwriter, or a dealer do not have to be registered with the SEC.

Which of the following is true of Section 24 of the Securities Act of 1933?

The sale of securities by an issuer to the public is known as an initial public offering.

________ permits issuers to sell up to $5 million of securities to the public during a 12-month period, pursuant to a simplified registration process.

The Securities Act of 1933 is a federal statute that primarily regulates the issue of securities by companies and other businesses.

EDGAR is the world's largest electronic securities exchange.

________ requires securities offered to the public through the use of the mails or any facility of interstate commerce to be registered with the SEC by means of a registration statement and an accompanying prospectus.

Which of the following is true of Small Company Offering Registration (SCOR)form?

The ________ is a federal statute primarily designed to prevent fraud in the trading of securities after they are issued.

Who among the following is considered a statutory insider?

Rule 506-known as the private placement exemption-allows issuers to raise capital from an unlimited number of ________ without having to register the offering with the SEC.

Which of the following is true of registration statements?

SEC Rule 506 is known as the ________.

Legal Heritage and the Digital Age

Ethics and Social Responsibility of Business

Courts, Jurisdiction, and Administrative Agencies

Judicial, Alternative, and E-Dispute Resolution

Constitutional Law for Business and E-Commerce

Torts and Strict Liability

Criminal Law and Cyber Crimes

Intellectual Property and Cyber Piracy

Formation of Traditional and E-Contracts

Performance and Breach of Traditional and E-Contracts

E-Commerce and Digital Law

UCC Sales and Lease Contracts and Warranties

Credit, Secured Transactions, and Bankruptcy

Small Business and General and Limited Partnerships

Limited Liability Companies, Limited Liability Partnerships, and Special Forms of Business

Corporations and the Sarbanes-Oxley Act

Agency Law

Equal Opportunity in Employment

Employment Law and Worker Protection

Labor Law and Immigration Law

Antitrust Law and Unfair Trade Practices

Consumer Protection

Environmental Protection

Land Use Regulation and Real Property

International and World Trade Law

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