Exam 20: Securities Regulation

Larry was working at his job at the landfill when he got off his tractor to take a break.He noticed some papers on the ground and went to throw them on a pile.As he held the papers he saw a confidential report from MegaCorp stating it would be announcing the development of a new super computer in two weeks.Larry has no relationship with MegaCorp.Larry mortgaged his house and borrowed all the money he could to purchase $300,000 worth of MegaCorp stock.Larry bought the stock for $32 a share.When the announcement was made public,MegaCorp's stock skyrocketed.Larry sold his stock a few weeks later and made a huge profit.Larry has:

Margo,treasurer of Zachariah Products,Inc.,bought 500 shares of her company's stock on February 23.Her son had health problems in May and she sold the stock at a profit to help pay his medical expenses.Margo:

Offerings under Regulation A of the Securities Act of 1933,although called private offerings,are really small public offerings.

The SEC regulates the securities industry but cannot create law.

A control security is stock which gives the owner a controlling interest in the company.