Exam 41: Investor Protection, e-Securities, and Wall Street Reform

Section 12 of the Securities Act of 1933 provides purchasers who have been injured by securities pursuant to an unwarranted exemption to rescind the securities purchase.

How does Section 16(b)of the Securities Exchange Act of 1934 protect the interests of a corporation? Explain with an example.

Which of the following is true of small offering exemption?

SEC Rule 506 is known as the ________.

Utilities Inc.decided to go public with an initial public offering.It sold securities,some of which were bought by James Jefferson.Six months later,James sold the shares he had purchased to Martha Graham and Mark Franco.Two years later,James bought back these shares from Martha and Mark and made a profit out of both transactions.Who is the issuer in this scenario?

Scissorwire Inc.sells shares of its stock to the public,with each share valued at $16.After a year,the company incurs a loss and the price of each share drops to $5.The company reveals that it had deliberately not registered with the SEC before going public and that it has no money to pay the investors.Which of the following holds well in this context?

________ permits issuers to sell up to $5 million of securities to the public during a 12-month period,pursuant to a simplified registration with the SEC.

There are no resale restrictions on securities that come under Regulation A.

Regulation A offerings can be sold without registration with the SEC only if an offering statement is provided prior to the purchase of the securities.

A 10 percent shareholder of an equity security of a reporting company is considered a statutory insider.

Which of the following best defines an initial public offering?

State securities laws are often referred to as ________.

The ________ is a federal statute that primarily regulates the issuance of securities by companies and other businesses.

________ requires securities offered to the public through the use of the mails or any facility of interstate commerce to be registered with the SEC by means of a registration statement and an accompanying prospectus.

Which of the following is true of Section 11 of the Securities Act of 1933?

During the review of a registration statement,the SEC does not pass judgment on the merits of the securities offered.

An offering statement requires less disclosure compared to a registration statement.

A(n)________ is submitted along with the registration statement to the SEC and also used as a selling tool to help prospective investors evaluate the financial risk of an investment.

The courts apply the ________ in determining whether an arrangement is an investment contract.

Which of the following is an example of exempt securities?