Question 1

What does "Regulation A" under the Securities Act of 1933 provide?

Accepted Answer

A)  exemption from registration for certain types of securities 
B)  exemption from registration for certain securities transactions 
C)  a simplified registration process for up to $5 million of securities sold to the public during a twelve-month period 
D)  state regulation in place of federal regulation for certain small offerings 
E)  that "tombstone ads" can be placed during the waiting period 
A)  exemption from registration for certain types of securities 
B)  exemption from registration for certain securities transactions 
C)  a simplified registration process for up to $5 million of securities sold to the public during a twelve-month period 
D)  state regulation in place of federal regulation for certain small offerings 
E)  that "tombstone ads" can be placed during the waiting period

Question 2

A person who discloses material nonpublic information to another person is called a "tippee."

Accepted Answer

A) True 
 B)False

Question 3

The National Association of Securities Dealers Automated Quotation System is an electronic stock market.

Accepted Answer

A) True 
 B)False

Question 4

For an investment contract,why is one of the requirements for the contract to be classified as a security that the arrangement be one where the profits are made through the efforts of others?

Accepted Answer

Where one must put his/her own efforts i

Question 5

Rule 10b-5,which prohibits securities fraud,applies only to the securities of companies listed on the major stock exchanges.

Accepted Answer

A) True 
 B)False

Question 6

In 2010,the United States Congress enacted the ________ Wall Street Reform and Consumer Protection Act to regulate hedge funds,derivatives,and abusive practices in the securities industry.

Accepted Answer

A)  Dodd-Frank 
B)  Dodd-Oxley 
C)  Sarbanes-Oxley 
D)  Sarbanes-Dodd 
E)  Sarbanes-Frank 
A)  Dodd-Frank 
B)  Dodd-Oxley 
C)  Sarbanes-Oxley 
D)  Sarbanes-Dodd 
E)  Sarbanes-Frank

Question 7

To establish a "due diligence" defense,the defendant must prove that after reasonable investigation,he or she had reasonable grounds to believe and did believe that,at the time the registration statement became effective,the statements contained therein were true and there was not omission of material facts.

Accepted Answer

A) True 
 B)False

Question 8

The business or party selling securities to the public is called the ________.

Accepted Answer

A)  incorporator 
B)  underwriter 
C)  originator 
D)  issuer 
E)  guarantor 
A)  incorporator 
B)  underwriter 
C)  originator 
D)  issuer 
E)  guarantor

Question 9

The Insider Trading Sanctions Act:

Accepted Answer

A)  permits the Securities and Exchange Commission to obtain a civil penalty of up to three times the illegal profits, gains, or losses avoided on insider trading. 
B)  permits a private party to obtain a civil penalty of up to three times the illegal profits, gains, or losses avoided on insider trading. 
C)  permits the Securities and Exchange Commission to obtain a civil penalty of up to two times the illegal profits, gains, or losses avoided on insider trading. 
D)  permits either the Securities and Exchange Commission or a private party to obtain a civil penalty of up to two times the illegal profits, gains, or losses avoided on insider trading. 
E)  allows insider trading to be prosecuted in state criminal courts. 
A)  permits the Securities and Exchange Commission to obtain a civil penalty of up to three times the illegal profits, gains, or losses avoided on insider trading. 
B)  permits a private party to obtain a civil penalty of up to three times the illegal profits, gains, or losses avoided on insider trading. 
C)  permits the Securities and Exchange Commission to obtain a civil penalty of up to two times the illegal profits, gains, or losses avoided on insider trading. 
D)  permits either the Securities and Exchange Commission or a private party to obtain a civil penalty of up to two times the illegal profits, gains, or losses avoided on insider trading. 
E)  allows insider trading to be prosecuted in state criminal courts.

Question 10

A(n)________ statement is a document that an issuer of securities files with the Securities and Exchange Commission that contains required information about the issuer,the securities to be issued,and other relevant information.

Accepted Answer

A)  origination 
B)  declaration 
C)  registration 
D)  certification 
E)  proclamation 
A)  origination 
B)  declaration 
C)  registration 
D)  certification 
E)  proclamation

Question 11

Is there a private right of action under Section 10b-5 of the Securities Exchange act of 1934?

Accepted Answer

A)  yes, the Act expressly provides for a private right of action 
B)  no, there is no such right under the Act 
C)  There is a private cause of action, but only if consent to sue is issued by the Securities and Exchange Commission. 
D)  There is no express private right of action, but courts have implied one. 
E)  yes, but only injunctions, not money damages, may be sought 
A)  yes, the Act expressly provides for a private right of action 
B)  no, there is no such right under the Act 
C)  There is a private cause of action, but only if consent to sue is issued by the Securities and Exchange Commission. 
D)  There is no express private right of action, but courts have implied one. 
E)  yes, but only injunctions, not money damages, may be sought

Question 12

You cannot be considered an insider unless you own at least fifty-one percent of a company's outstanding securities.

Accepted Answer

A) True 
 B)False

Question 13

Most states have enacted securities laws.

Accepted Answer

A) True 
 B)False

Question 14

Short-swing profits are profits made through the buying and selling of a security by a statutory insider occurring within ________.

Accepted Answer

A)  one month 
B)  three months 
C)  six months 
D)  nine months 
E)  twelve months 
A)  one month 
B)  three months 
C)  six months 
D)  nine months 
E)  twelve months

Question 15

Fred is an officer at Hill Corporation.Fred,with no inside information,buys four hundred shares of Hill stock in May at $40 per share,and in July,sells two hundred fifty shares at $60 per share.Is Fred liable for short-swing profits?

Accepted Answer

Fred is liable.Because a purch

Question 16

The purpose of the Uniform Securities Act is to coordinate federal and state securities laws.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is true about the Securities Act of 1933 small offering exemption?

Accepted Answer

A)  Sales of securities up to $5,000,000 qualify. 
B)  Sales can be made only to accredited investors. 
C)  Sales must all be made to investors in the same state. 
D)  There are no limits on the number or types of investors. 
E)  Even with the exemption, a simplified registration process must be followed. 
A)  Sales of securities up to $5,000,000 qualify. 
B)  Sales can be made only to accredited investors. 
C)  Sales must all be made to investors in the same state. 
D)  There are no limits on the number or types of investors. 
E)  Even with the exemption, a simplified registration process must be followed.

Question 18

Common stock,preferred stock,bonds,debentures,and warrants are examples of statutorily-defined securities.

Accepted Answer

A) True 
 B)False

Question 19

Under the Securities Act of 1933,in an "intrastate offering" exemption,there is no maximum dollar amount that can qualify.

Accepted Answer

A) True 
 B)False

Question 20

All but which of the following is exempt from registration with the Securities and Exchange Commission?

Accepted Answer

A)  securities issued by any government in the United States 
B)  securities issued by nonprofit issuers 
C)  insurance and annuity contracts issued by insurance companies 
D)  securities issued in a corporate reorganization in which one security is exchanged for another security 
E)  long-term notes and drafts that have a maturity date that exceeds one (1) year 
A)  securities issued by any government in the United States 
B)  securities issued by nonprofit issuers 
C)  insurance and annuity contracts issued by insurance companies 
D)  securities issued in a corporate reorganization in which one security is exchanged for another security 
E)  long-term notes and drafts that have a maturity date that exceeds one (1) year

Exam 32: Investor Protection,E-Securities Transactions,and Wall Street Reform

What does "Regulation A" under the Securities Act of 1933 provide?

A person who discloses material nonpublic information to another person is called a "tippee."

The National Association of Securities Dealers Automated Quotation System is an electronic stock market.

For an investment contract,why is one of the requirements for the contract to be classified as a security that the arrangement be one where the profits are made through the efforts of others?

Rule 10b-5,which prohibits securities fraud,applies only to the securities of companies listed on the major stock exchanges.

In 2010,the United States Congress enacted the ________ Wall Street Reform and Consumer Protection Act to regulate hedge funds,derivatives,and abusive practices in the securities industry.

The business or party selling securities to the public is called the ________.

The Insider Trading Sanctions Act:

A(n)________ statement is a document that an issuer of securities files with the Securities and Exchange Commission that contains required information about the issuer,the securities to be issued,and other relevant information.

Is there a private right of action under Section 10b-5 of the Securities Exchange act of 1934?

You cannot be considered an insider unless you own at least fifty-one percent of a company's outstanding securities.

Most states have enacted securities laws.

Short-swing profits are profits made through the buying and selling of a security by a statutory insider occurring within ________.

Fred is an officer at Hill Corporation.Fred,with no inside information,buys four hundred shares of Hill stock in May at $40 per share,and in July,sells two hundred fifty shares at $60 per share.Is Fred liable for short-swing profits?

The purpose of the Uniform Securities Act is to coordinate federal and state securities laws.

Which of the following is true about the Securities Act of 1933 small offering exemption?

Common stock,preferred stock,bonds,debentures,and warrants are examples of statutorily-defined securities.

Under the Securities Act of 1933,in an "intrastate offering" exemption,there is no maximum dollar amount that can qualify.

All but which of the following is exempt from registration with the Securities and Exchange Commission?

Legal Heritage and the Information Age

Constitutional Law for Business and E-Commerce

Courts and Jurisdiction

Judicial, Alternative, Administrative, and E-Dispute Resolution

Torts and Strict Liability

Criminal Law and Cyber Crimes

Intellectual Property and Cyber Piracy

Ethics and Social Responsibility of Business

Nature of Traditional and E-Contracts

Agreement and Consideration

Capacity and Legality

Genuineness of Assent and Statute of Frauds

Third-Party Rights and Discharge

Breach of Contract and Remedies

Digital Law and E-Commerce

Formation of Sales, Lease, and E-Contracts

Performance of Sales, Leases and E-Contracts

Remedies for Breach of Sales and Lease Contracts

Warranties and Product Liability

Creation and Transfer of Negotiable Instruments

Holder in Due Course and Liability of Parties

Banking System, E-Money, and Financial Reform

Credit and Secured Transactions

Bankruptcy and Reorganization

Agency Law

Small Business, Entrepreneurship, and Partnerships

Corporate Formation and Financing

Corporate Governance and Sarbanes-Oxley Act

Corporate Acquisitions and Multinational Corporations

Limited Liability Company and Limited Liability Partnership

Franchise and Special Forms of Business

Antitrust Law

Consumer Safety, Consumer Financial Protection, and Environmental Protection

Labor, Worker Protection, Employment, and Immigration Law

Equal Opportunity in Employment

Personal Property, Bailment, and Insurance

Real Property, Landlord-Tenant Law, and Land Use Regulation

Family Law, Wills, and Trusts

Accountants' Liability

International and World Trade Law

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