Exam 18: Securities Regulation

The ____ regulates trading in existing securities and imposes disclosure requirements on corporations that have issued publicly held securities.

The Insider Trading Sanctions Act holds that someone found guilty of insider trading may pay triple damages.

A debt is a financial obligation a firm. It is:

What law gives the SEC a basis for prosecuting insider trading?

Companies that make forecasts that are accompanied by "meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the forward-looking statement" are protected from litigation by:

In order to meet the requirements of the Howey test, an investor must not have direct control over the work that makes the investment a success or failure.

SEC Rule 10b-5 (securities fraud) applies only to registered securities.

Registration of a prospectus for a new stock offering becomes effective:

A share of stock represents the right to:

Debt instruments, such as bonds, may not be sold for a commission.

Securities differ from other assets in that they:

The FINRA, together with the SEC, regulates the action of persons who actually trade securities.

According to SEC rules, 10-K reports must be filed:

Private placement offerings are most common for large security issues sold to institutional investors.

Which class of securities is (are) exempt from the federal securities laws?

The primary dispute resolution mechanism between investors and brokers is:

The Investment Company Act (ICA):

The Securities Litigation Reform Act of 1995 raises the standards for plaintiffs bringing suit for misstatements of corporate officials in federal court.

Private placements under Rule 144A include large dollar security sales to big institutions.

Liability for securities fraud under SEC Rule 10b-5 may be imposed because a company did not release information.