Exam 43: Securities Regulation

The registration statement must be signed by:

Steve 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 Steve 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. Steve 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?

All fifty states have enacted similar statutes regulating tender offers.

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

If a stock offering is made only to "accredited investors," there is no limit on the amount of the offering for the exemption to apply.

The federal government alone regulates the sale of securities.

Under SEC requirements adopted in 2010, disclosure of any directorships held by each director and nominee at any time during the past seven years at any public company or registered investment company must be made to shareholders.

"Insider trading" rules pertain to:

The Orange Grove Limited Partnership would like to make an offering of $2 million in limited partnership interests under either Rule 505 or Rule 506 of Regulation D of the Securities Act of 1933. Orange Grove plans to sell to 40 investors, eight of whom have net incomes in excess of $200,000 per year and net worth of more than $2 million. The 40 investors also include five mutual funds and three insurance companies. The other investors to whom Orange Grove plans to sell are not experienced investors. Is either Rule 505 or Rule 506 available to the Orange Grove Partnership?

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

If a limited offering of $1.6 million worth of shares is made only to banks, they will not be required to receive any disclosure materials.

In 1992, the SEC issued new rules tightening the registration and reporting system for small business issuers, which increase the cost for such issuers wishing to trade their securities publicly.

The 1934 Act applies only to stock traded on a national exchange for companies whose corporate assets exceed $10 million.

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

Which of the following is correct about the sanctions and penalties under the 1934 Act, as amended?

SEC rules concerning fraud in securities transactions apply to:

In 2006, the SEC abolished the requirement that a registration statement disclose compensation paid to senior executives and directors.

The effective date of a registration statement is the thirtieth day after filing, after which investors can access it using EDMOND.

A basic objective of the Securities Act of 1933 is:

Registration calls for disclosure of which of the following?