Exam 21: Investor Protection, Insider Trading, and Corporate Governance

Shoes & Sox Corporation is a public company whose shares are traded in the public securities markets and does not qualify for an exemption from registration requirements. With respect to financial and other significant information concerning its securities, the Securities Act of 1933

Under the Sarbanes-Oxley Act of 2002, chief corporate executives must certify the accuracy of information in corporate financial statements and reports that are filed with the Securities and Exchange Commission.

Fresh Fruit Company has assets of less than $10 million and fewer than fifty shareholders. Gourmand Pastries, Inc., has assets of more than $50 mil-lion and more than five hundred shareholders. The Securities Exchange Act of 1934 applies to

Securities offerings in unlimited amounts can be exempt from the registration requirements in certain circumstances.

Private, midsize-business, noninvestment company offers of securities are never exempt from the registration requirements.

Once a registration statement has been filed, a waiting period begins while the Securities and Exchange Commission reviews the statement.

Securities can be sold after the effective date of the registration statement without restrictions.

Exemptions from federal securities law are not automatically exempted from state laws.

The Securities and Exchange Commission does not regulate the content of proxy statements.