Question 1

Which of the following is TRUE regarding the Foreign Corrupt Practices Act of 1977?

Accepted Answer

A) It applies only to corporations whose securities are registered under the Securities Exchange Act of 1934. 
B) It applies only to corporations engaged in foreign commerce. 
C) The Act makes it illegal to bribe foreign officials to obtain business. 
D) All of these are correct. 
A) It applies only to corporations whose securities are registered under the Securities Exchange Act of 1934. 
B) It applies only to corporations engaged in foreign commerce. 
C) The Act makes it illegal to bribe foreign officials to obtain business. 
D) All of these are correct.

Question 2

The 1934 Act regulates tender offers and proxy solicitations.

Accepted Answer

A) True 
 B)False

Question 3

A registration statement requires all of the following EXCEPT:

Accepted Answer

A) financial statements certified by an independent accountant. 
B) description of the business. 
C) description of the management. 
D) projection of future growth potential. 
A) financial statements certified by an independent accountant. 
B) description of the business. 
C) description of the management. 
D) projection of future growth potential.

Question 4

The 1933 Act imposes only civil, not criminal, sanctions for violation of its provisions.

Accepted Answer

A) True 
 B)False

Question 5

Registration requirements are the same under the 1933 and 1934 Acts.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

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 8

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 9

Shelf registrations allow issuers to respond more quickly to market conditions, but the provision allowing it does not apply to all companies.

Accepted Answer

A) True 
 B)False

Question 10

The Securities Exchange Act of 1934 primarily deals with secondary transactions in stock.

Accepted Answer

A) True 
 B)False

Question 11

Registration calls for disclosure of which of the following?

Accepted Answer

A) A description of the registrant's properties and business. 
B) A description of the significant provisions of the security to be offered for sale and its relationship to the registrant's other capital securities. 
C) Financial statements certified by independent public accountants. 
D) All of these. 
A) A description of the registrant's properties and business. 
B) A description of the significant provisions of the security to be offered for sale and its relationship to the registrant's other capital securities. 
C) Financial statements certified by independent public accountants. 
D) All of these.

Question 12

The definition of "insider" is consistent between Rule 10b-5 and Section 16(b) of the 1934 Act.

Accepted Answer

A) True 
 B)False

Question 13

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 14

There are rigorously enforced restrictions regarding both number and qualification of investors who purchase securities under Regulation A.

Accepted Answer

A) True 
 B)False

Question 15

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 16

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

Accepted Answer

A) True 
 B)False

Question 17

A registration statement becomes public immediately on filing with the SEC, but a prospectus only becomes public upon signature of the chief financial officer.

Accepted Answer

A) True 
 B)False

Question 18

The 1934 Securities Exchange Act requires certain disclosure during a "tender offer." Which of the following best describes this requirement?

Accepted Answer

A) Whenever stock is acquired with intent to effect a takeover 
B) Whenever an offer for more than 5 percent of a class of registered equity securities is made 
C) Whenever 10 percent of a target corporation's stock is acquired 
D) Whenever the acquiring company acquires a "controlling interest" in the target 
A) Whenever stock is acquired with intent to effect a takeover 
B) Whenever an offer for more than 5 percent of a class of registered equity securities is made 
C) Whenever 10 percent of a target corporation's stock is acquired 
D) Whenever the acquiring company acquires a "controlling interest" in the target

Question 19

Insiders would violate the short-swing profits rule (Rule 16b) of the 1934 Act by buying stock on January 1 and selling on May 1.

Accepted Answer

A) True 
 B)False

Question 20

The Securities and Exchange Commission can seek civil injunctions and recommend that the Justice Department bring criminal prosecution against violators of federal securities laws.

Accepted Answer

A) True 
 B)False

Exam 43: Securities Regulation

Which of the following is TRUE regarding the Foreign Corrupt Practices Act of 1977?

The 1934 Act regulates tender offers and proxy solicitations.

A registration statement requires all of the following EXCEPT:

The 1933 Act imposes only civil, not criminal, sanctions for violation of its provisions.

Registration requirements are the same under the 1933 and 1934 Acts.

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

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:

Rule 10b-5:

Shelf registrations allow issuers to respond more quickly to market conditions, but the provision allowing it does not apply to all companies.

The Securities Exchange Act of 1934 primarily deals with secondary transactions in stock.

Registration calls for disclosure of which of the following?

The definition of "insider" is consistent between Rule 10b-5 and Section 16(b) of the 1934 Act.

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.

There are rigorously enforced restrictions regarding both number and qualification of investors who purchase securities under Regulation A.

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

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

A registration statement becomes public immediately on filing with the SEC, but a prospectus only becomes public upon signature of the chief financial officer.

The 1934 Securities Exchange Act requires certain disclosure during a "tender offer." Which of the following best describes this requirement?

Insiders would violate the short-swing profits rule (Rule 16b) of the 1934 Act by buying stock on January 1 and selling on May 1.

The Securities and Exchange Commission can seek civil injunctions and recommend that the Justice Department bring criminal prosecution against violators of federal securities laws.

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

51: The Legal Environment Of Business

52: Contracts.

53: Agency.

54: Sales

55: Negotiable Instruments

56: Unincorporated Business Association

57: Corporations

58: Debtor and Creditor Relation

59: Regulation of Business

60: Property.