Exam 20: Securities Regulation

Pursuant to a public offering,a CPA firm prepared an unqualified opinion as to the financial statements of Merrick Co.After the offering,omissions and misstatements were found.The CPA firm is now being sued by the purchasers of the stock.The purchasers are alleging that the erroneous financial statements in the registration statement caused them to suffer a monetary loss.The CPA firm can avoid liability if it can prove:

Under the Sarbanes-Oxley Act,each company's CEO and CFO must certify that the:

Securities offered and sold entirely within one state by a corporation of that state are exempt from registration.

A criminal case under the Securities Act of 1933 is prosecuted by:

Under Section 14 of the 1934 Act or SEC rules:

The Securities Act of 1933 established the Securities and Exchange Commission.

The 1934 Act is primarily intended to:

Jackie learned of insider trading information while talking to Mark,a director of a large corporation.She took advantage of the information to buy stock and make a huge financial gain.If she is accused of violating securities law,what must the government prove in order to gain a conviction against Jackie?

What are the three primary ways the SEC creates law?

To recover for an alleged violation of SEC Rule 10(b)-5,a plaintiff is required to prove reliance on a misstatement or omission relative to the purchase of the security.

If a registration statement contains a material misstatement or omission:

Techno is planning a securities offering under Regulation D,Rule 506.Under this rule,Techno can:

Typically,exemptions from registration under the 1933 Act are based on either the type of security or the type of transaction.

Which of the following statements is correct?

The guiding principle of federal securities law is that:

Identify and explain three options that ease the process of complying with state securities requirements.

Countywide Metals is a small company that incorporates in the state in which it is doing business and plans to offer and sell $100,000 worth of stock only to residents of the county in which it is doing business.Discuss the requirements Countywide must meet for registering its securities.

Which of the following is a characteristic of a DPO?

If the final registration statement contains a material misstatement or omission,the purchaser of the security can recover damages from:

A defense to a civil action brought under Section 10(b)and Rule 10b-5 of the 1934 Act would be that the: