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

Which of the following is an example of exempt securities?

The law permits no more than 75 nonaccredited investors to purchase securities pursuant to a private placement exemption.

A business or party buying securities to the public is called an issuer.

________ is a provision of the Securities Act of 1933 that imposes civil liability on persons who intentionally defraud investors by making misrepresentations or omissions of material facts in the registration statement.

The Securities Exchange Act of 1934 is a federal statute primarily designed to prevent fraud in the subsequent trading of securities.

Explain how the SEC governs trading in securities when inside information about a company is possessed by an outsider to the company.Provide an example.

Small Company Offering Registration is a method for small companies to sell up to $1 million of securities during a 12-month period to the public by using a question-and-answer disclosure form called Form U-7.

A whistleblower bounty program allows a person who provides information that leads to a successful SEC action in which more than $1 million is recovered to receive 65 percent to 80 percent of the money collected.

During the ________ period,the issuer cannot offer to sell securities or sell securities.

The JOBS Act permits securities of an issuer to be sold to the public using an intermediary's funding portal,which is an Internet website.

Bonds are examples of ________.

Civil liability under Section 11 is imposed on those who intentionally defraud investors.

The SEC is an agency composed of twenty-five members who are appointed by the president.

Which of the following is true of Section 11 of the Securities Act of 1933?

Prior to the 1920s and 1930s,the securities markets in this country were regulated by the federal government.

The ________ period begins when the registration statement becomes active and runs until the issuer either sells all of the securities or withdraws them from sale.

The issuance of securities by an issuer is called an initial private offering (IPO).

The STOCK Act allows federal pensions to members of Congress who are convicted of felonies involving public corruption.

A(n)________ fund is a private investment company that invests in a wide range of risky investments.

A Form 8-K is a(n)________ report that has to be filed by a reporting company as required by the Securities Exchange Act of 1934.