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

An offering statement requires less disclosure compared to a registration statement.

The ________ imposes liability under Section 10(b)and Rule 10b-5 on an outsider who misappropriates information about a company, in violation of his or her fiduciary duty, and then trades in the securities of that company.

The SEC is concerned with regulating issues and trading of securities alone and cannot regulate the activities of securities brokers and advisors.

Distinguish between nonissuer exemption, intrastate offering exemption, and private placement exemption.

A(n)________ is an exemption from registration that permits local businesses to raise capital from local investors to be used in the local economy without the need to register with the SEC.

Section 10(b)of the Securities Exchange Act prohibits the use of manipulative and deceptive devices in contravention of the rules and regulations prescribed by the SEC.

Defendants cannot assert a due diligence defense against liabilities arising from the violation of Section 11 of the Securities Act of 1933.

Which of the following is true of a Regulation A offering?

The ________ is a federal agency that is created by the Securities Exchange Act of 1934 and it is empowered to administer federal securities laws.

Section 12 of the Securities Act of 1933 provides purchasers who have been injured by securities pursuant to an unwarranted exemption to rescind the securities purchase.

Interests or instruments that are expressly mentioned in securities acts are known as ________.

Which of the following is classified under "common securities?"

Insider trading in the purchase and sale of securities in the after markets is prohibited under the statute of the ________.

Debentures are an example of ________ securities.

Which of the following is true of exempt securities?

The Howey test is used to determine if an arrangement is an investment contract.

Which of the following must be included in the registration statement?

The nonissuer exemption permits local businesses to raise capital from local investors to be used in the local economy without the need to register with the SEC.

A registration statement need not contain details on how the proceeds from the offering will be used.

In order to be found guilty for violation of Rule 10b-5, intentional conduct (scienter)must be proven.