Question 1

A writing signed by a shareholder, granting authority to another to vote the signer's stock at a specified shareholder meeting is a:

Accepted Answer

A)  tender offer. 
B)  short-term commercial paper. 
C)  registration. 
D)  proxy. 
A)  tender offer. 
B)  short-term commercial paper. 
C)  registration. 
D)  proxy.

Question 2

Under Rule 505, the issuer must:

Accepted Answer

A)  not advertise. 
B)  restrict the offering to thirty-five persons. 
C)  limit the offering to $1 million. 
D)  sell only to "accredited investors." 
A)  not advertise. 
B)  restrict the offering to thirty-five persons. 
C)  limit the offering to $1 million. 
D)  sell only to "accredited investors."

Question 3

"Shelf registrations" have to do with delayed sales of stock.

Accepted Answer

A) True 
 B)False

Question 4

All of the following are exempt from registration under the 1933 Act EXCEPT:

Accepted Answer

A)  government bonds. 
B)  securities issued by nonprofit medical facilities. 
C)  certificates of deposit issued by banks. 
D)  insurance company annuities. 
A)  government bonds. 
B)  securities issued by nonprofit medical facilities. 
C)  certificates of deposit issued by banks. 
D)  insurance company annuities.

Question 5

If Mark owns shares in General Custard Co., he may bring his proposal for a new subdivision, branching out into ice cream, before the shareholders if he:

Accepted Answer

A)  owns at least 5% of the GC Co. stock. 
B)  owns at least 10% of the GC Co. stock. 
C)  limits it to 5,000 words. 
D)  has not made a proposal yet this year. 
A)  owns at least 5% of the GC Co. stock. 
B)  owns at least 10% of the GC Co. stock. 
C)  limits it to 5,000 words. 
D)  has not made a proposal yet this year.

Question 6

The Foreign Corrupt Practices Act makes it illegal to offer a payment of money to a foreign official to influence a decision even if the payment is not made.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following are exempt transactions for issuers under the 1933 Act?

Accepted Answer

A)  Private placements 
B)  Limited offers not exceeding $5 million under Role 505 or $1 million under Rule 504 
C)  Limited offers solely to accredited investors 
D)  All of these. 
A)  Private placements 
B)  Limited offers not exceeding $5 million under Role 505 or $1 million under Rule 504 
C)  Limited offers solely to accredited investors 
D)  All of these.

Question 8

David is a director on a board of a corporation that is covered by the federal securities laws. He buys 1,000 shares of stock in the corporation based upon information he has received as a director. The purchase is:

Accepted Answer

A)  valid provided no fraudulent statements were made to the person from whom he purchased the shares. 
B)  invalid. 
C)  voidable regardless of whether a public announcement was made. 
D)  valid provided the purchase occurred after a public announcement of the information. 
A)  valid provided no fraudulent statements were made to the person from whom he purchased the shares. 
B)  invalid. 
C)  voidable regardless of whether a public announcement was made. 
D)  valid provided the purchase occurred after a public announcement of the information.

Question 9

Types of securities that are exempt from registration under the federal securities laws include:

Accepted Answer

A)  securities of domestic banks. 
B)  securities of a charitable organization. 
C)  bonds issued by a city. 
D)  All of these are exempt. 
A)  securities of domestic banks. 
B)  securities of a charitable organization. 
C)  bonds issued by a city. 
D)  All of these are exempt.

Question 10

Rule 10b-5:

Accepted Answer

A)  applies only to seller misconduct. 
B)  is an SEC antifraud rule. 
C)  applies only to securities listed on an exchange, not those sold over the counter. 
D)  All of these. 
A)  applies only to seller misconduct. 
B)  is an SEC antifraud rule. 
C)  applies only to securities listed on an exchange, not those sold over the counter. 
D)  All of these.

Question 11

Which of the following is NOT true about private placement exemptions that do not involve any public offering?

Accepted Answer

A)  Registration or disclosure is never required 
B)  General solicitation of purchasers is not allowed 
C)  Resale of securities is restricted 
D)  None of these 
A)  Registration or disclosure is never required 
B)  General solicitation of purchasers is not allowed 
C)  Resale of securities is restricted 
D)  None of these

Question 12

The Securities Enforcement Remedies and Penny Stock Reform Act of 1990 gives the SEC power to issue cease and desist orders and to impose criminal fines up to $1 million.

Accepted Answer

A) True 
 B)False

Question 13

The exemption from registration for transactions not involving any public offering is the so-called private placement provision found in Section 4(2) of the Act and SEC Rule:

Accepted Answer

A)  10b-5. 
B)  504. 
C)  505. 
D)  506. 
A)  10b-5. 
B)  504. 
C)  505. 
D)  506.

Question 14

A defense to an action based on untrue statements contained in a registration statement is:

Accepted Answer

A)  innocent mistake. 
B)  due diligence. 
C)  constructive disclosure. 
D)  reasonable diligence. 
A)  innocent mistake. 
B)  due diligence. 
C)  constructive disclosure. 
D)  reasonable diligence.

Question 15

The SEC has adopted rules requiring an issuer's chief executive and chief financial officers to certify the financial and other information contained in the issuer's annual and quarterly reports.

Accepted Answer

A) True 
 B)False

Question 16

The rule that prohibits schemes and devices to defraud investors is Rule:

Accepted Answer

A)  504. 
B)  14a-3. 
C)  10b-5. 
D)  16(b). 
A)  504. 
B)  14a-3. 
C)  10b-5. 
D)  16(b).

Question 17

The rule that prohibits the solicitation of a proxy unless each person solicited has been furnished with a written proxy statement containing specified information is Rule:

Accepted Answer

A)  10b-5. 
B)  16(b). 
C)  14a-3. 
D)  505. 
A)  10b-5. 
B)  16(b). 
C)  14a-3. 
D)  505.

Question 18

A "private placement" involves no public offering and is exempt from registration.

Accepted Answer

A) True 
 B)False

Question 19

Bonds are not included in the definition of the term "security."

Accepted Answer

A) True 
 B)False

Question 20

Registration with the SEC ensures a potential investor as to the financial soundness of the business represented by the stock.

Accepted Answer

A) True 
 B)False

Exam 43: Securities Regulation

A writing signed by a shareholder, granting authority to another to vote the signer's stock at a specified shareholder meeting is a:

Under Rule 505, the issuer must:

"Shelf registrations" have to do with delayed sales of stock.

All of the following are exempt from registration under the 1933 Act EXCEPT:

If Mark owns shares in General Custard Co., he may bring his proposal for a new subdivision, branching out into ice cream, before the shareholders if he:

The Foreign Corrupt Practices Act makes it illegal to offer a payment of money to a foreign official to influence a decision even if the payment is not made.

Which of the following are exempt transactions for issuers under the 1933 Act?

David is a director on a board of a corporation that is covered by the federal securities laws. He buys 1,000 shares of stock in the corporation based upon information he has received as a director. The purchase is:

Types of securities that are exempt from registration under the federal securities laws include:

Rule 10b-5:

Which of the following is NOT true about private placement exemptions that do not involve any public offering?

The Securities Enforcement Remedies and Penny Stock Reform Act of 1990 gives the SEC power to issue cease and desist orders and to impose criminal fines up to $1 million.

The exemption from registration for transactions not involving any public offering is the so-called private placement provision found in Section 4(2) of the Act and SEC Rule:

A defense to an action based on untrue statements contained in a registration statement is:

The SEC has adopted rules requiring an issuer's chief executive and chief financial officers to certify the financial and other information contained in the issuer's annual and quarterly reports.

The rule that prohibits schemes and devices to defraud investors is Rule:

The rule that prohibits the solicitation of a proxy unless each person solicited has been furnished with a written proxy statement containing specified information is Rule:

A "private placement" involves no public offering and is exempt from registration.

Bonds are not included in the definition of the term "security."

Registration with the SEC ensures a potential investor as to the financial soundness of the business represented by the stock.

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remedies

Relationship of Principal and Agent

Relationship With Third Parties

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature, Formation, and Powers

Financial Structure

Management Structure

Fundamental Changes

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Consumer Protection

Employment Law

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

the Legal Environment of Business

Contracts

Agency

Sales

Negotiable Instruments

Unincorporated Business Associations

Corporations

Debtor and Creditor Relations

Regulation of Business

Property