Exam 45: Securities Regulation

Individuals who steal valuable nonpublic information in breach of a fiduciary duty to their employers and trade in securities on that information are guilty of insider trading as misappropriators.

At least 30 days must elapse from the date of a company's filing a registration statement with the SEC to the date the registration becomes effective.

All private offerings of securities valued less than $100,000 are exempt from the SEC registration requirements.

The Securities Act of 1933 prohibits "bad investment" offerings to the public.

Companies whose securities are listed on a national securities exchange and unlisted companies with assets in excess of $10 million and 500 or more shareholders are exempt from the reporting requirements of the Securities Exchange Act of 1934.

Because of the widespread economic impact of the 2008 crisis, Congress passed The Dodd-Frank Act in 2012 to encourage investment in companies, especially smaller companies, by providing easier access of small firms to capital markets.

A prospectus sets forth:

The Sarbanes-Oxley Act of 2002 contains a "clawback provision" which requires the CEO and CFO to reimburse the issuer for any bonus or incentive-based compensation received during the 12-month period following the issuance of the restated financial statements.

The Securities Exchange Act of 1934 is concerned with the secondary distribution of securities in the national securities markets and in the over-the-counter markets.

The Private Securities Litigation Reform Act allows shelters from private liability for issuers who: ______.

Individuals who steal valuable nonpublic information in breach of a fiduciary duty to their employer and trade in securities on that information are guilty of insider trading as: ______.

Investors who lack inside information and have sold their stock during the relevant time period may recover damages from insiders who have made use of the undisclosed information.

A registration statement sets forth the key information contained in the prospectus.