Exam 21: Public and Private Offerings of Securities.

Fact Pattern 21-3 Yolanda has filed the registration statement, in connection with a public offering of stock in ABC Corgi, a company dedicated to the production of clothing and toys highlighting the highly prized Welsh Corgi breed of dog. The registration statement is not yet effective. Yolanda would like to move forward with promoting the company as much as possible. She asks for advice regarding activities in which she could legally participate. She is particularly interested in making presentations to large institutional investors. -Refer to Fact Pattern 21-3.Which of the following is true regarding Yolanda's situation?

Proxies give the proxy holder the right to vote the shares owned by the person who signs the proxy card.

Which of the following is NOT considered a traditional shelf offering?

Any transaction that involves an investment of money in a common enterprise with profits to come solely from the efforts of others is deemed to be a(n)__________ and thus a security.

In CASE 21.1 Lawson v.FMR,LLC (2014),the question before the U.S.Supreme Court was whether the __________ Act whistleblower protections extended to __________ of __________ contractors of __________ corporations.

Under the Sarbanes-Oxley Act,discriminating against or discharging an informant is:

CASE 21.3In re Lehman Bros.Mortgage-Backed Securities Litigation (2011)involved a question of whetherrating agencies that helped select a pool of mortgages for a mortgage-backed security were "underwriters" under the 1933 Act or "controlling persons" under section 15 of the 1933 Act.How did the court rule?

"Crowdfunding" is an internet-based,fund-raising method certain startups and other small businesses can use to raise relatively small amounts of money from a large number of individuals.

Fact Pattern 21-1 Joan enjoys cross stitching, and her husband, John, makes items using a woodworking process. They would like to make more items and open a small shop selling their handiwork, but they need additional capital with which to purchase raw materials, rent space, and advertise. Joan and John discuss the idea with their neighbors during the annual neighborhood picnic. A number of the neighbors say that they would like to invest in the project. This was entirely the initial idea of the neighbors, and Joan and John did not coerce them in any way. Joan and John, however, quickly draw up contracts that the neighbors signed providing that each investor would receive a certain interest in the shop. An attorney who lived in the neighborhood and specialized in family law asked if there were some laws that John and Joan needed to satisfy in order to seek investors. The neighborhood consensus, however, was that, so long as no one was misled and acted voluntarily, no problem existed. John and Joan proceeded with the shop and made a significant amount of profit. Disagreements arose among the neighbors, however, regarding exactly who was entitled to what. -Refer to Fact Pattern 21-1.Which of the following is true regarding the application of federal securities laws to John and Joan's situation?

A __________ offering of securities is a subsequent offering by a person other than the issuer.

Mere promotion of a security makes a person a seller and,therefore,liable under section 5 of the 1933 Act based upon the sale of a security without an effective registration statement or by means of a noncomplying prospectus.

A company that decides to abandon a proposed public offering due,for example,to a lack of investor interest,must wait at least eighteen months before shifting to a private offering.

A prospectus is a selling document as well as a disclosure document.

The __________ is the private offering counterpart to the prospectus.

Which of the following is NOT true regarding the Sarbanes-Oxley Act?

Which of the following activities are NOT regulated by the 1934 Act?

If an issuer makes successive sales within a limited period of time,the SEC may __________ the successive sales,resulting in the loss of a private-offering exemption.

The Sarbanes-Oxley Act created the Public Company Accounting Oversight Board.

Shelf registration under the Securities Act of 1933 allows registration of a number of securities at one time for issuance later.

Investment banking firms are prohibited by federal law from underwriting public offerings of securities.