Question 1

What are the three different forms of registration that apply to a state's application of blue sky laws?

Accepted Answer

Registration by notification allows issu

Question 2

According to the Securities Act of 1933,which of the following is considered legal during the prefiling period?

Accepted Answer

A)  selling a covered security 
B)  engaging in negotiations and agreements with underwriters 
C)  offering to sell a covered security 
D)  offering to buy a covered security 
E)  sellers soliciting offers for later acceptance 
A)  selling a covered security 
B)  engaging in negotiations and agreements with underwriters 
C)  offering to sell a covered security 
D)  offering to buy a covered security 
E)  sellers soliciting offers for later acceptance

Question 3

What is the civil liability under the Securities Act of 1933? Which sections of the Act directly apply to civil liability?

Accepted Answer

Civil liability under the 1933 Act usual

Question 4

State the new or proposed rules issued by the Securities and Exchange Commission (SEC)post the revitalization process initiated by the Sarbanes-Oxley Act of 2002.

Accepted Answer

The Sarbanes-Oxley Act (SOX)increases th

Question 5

A prospectus is filed during the

Accepted Answer

A)  prefiling period. 
B)  waiting period. 
C)  pre-effective period. 
D)  posteffective period. 
E)  elimination period. 
A)  prefiling period. 
B)  waiting period. 
C)  pre-effective period. 
D)  posteffective period. 
E)  elimination period.

Question 6

What are the sanctions recognized by the 1933 Securities Act in case of untrue or misleading information being provided to a potential investor?

Accepted Answer

In essence,the 1933 Securities Act requi

Question 7

Under Section 11,the plaintiff has to prove reliance on the false or misleading prospectus or communication.

Accepted Answer

A) True 
 B)False

Question 8

Restatements of financial reports have risen in number as a result of the Sarbanes-Oxley Act because companies have made efforts to maintain appropriate compliance with the law.

Accepted Answer

A) True 
 B)False

Question 9

Title II of the Jumpstart Our Business Startups (JOBS)Act of 2012 prohibits companies to advertise or share publicly that they are seeking investments.

Accepted Answer

A) True 
 B)False

Question 10

What are the provisions under Title II and Title III of the Jumpstart Our Business Startups (JOBS)Act of 2012?

Accepted Answer

Title II of the Jumpstart Our Business S

Question 11

The Sarbanes-Oxley Act requires that information pertaining to an insider's transaction be filed

Accepted Answer

A)  by mail, postmarked within five business days of the transaction. 
B)  electronically within two business days of the transaction. 
C)  by any effective means within 10 business days of the transaction. 
D)  by any effective means within 10 business days after the close of the calendar month in which the transaction occurred. 
E)  electronically on the day of the transaction. 
A)  by mail, postmarked within five business days of the transaction. 
B)  electronically within two business days of the transaction. 
C)  by any effective means within 10 business days of the transaction. 
D)  by any effective means within 10 business days after the close of the calendar month in which the transaction occurred. 
E)  electronically on the day of the transaction.

Question 12

Who is liable under the Section 11 civil liability provision dealing with registration statements?

Accepted Answer

The civil liability provision dealing wi

Question 13

According to the Securities and Exchange Commission (SEC),a person should be considered to be a temporary insider if that person conveys nonpublic information that was to have been kept confidential.This philosophy has become known as the

Accepted Answer

A)  quasi-insider theory. 
B)  implied-insider theory. 
C)  temporary insider theory. 
D)  misappropriation theory. 
E)  mosaic theory. 
A)  quasi-insider theory. 
B)  implied-insider theory. 
C)  temporary insider theory. 
D)  misappropriation theory. 
E)  mosaic theory.

Question 14

The Sarbanes-Oxley Act provides that whenever there is a restatement of the company's financial condition,then the executives

Accepted Answer

A)  would be morally rather than legally culpable for the bonuses paid as a result of the incorrect financial statements. 
B)  have to forfeit their salaries to cover for the amount of the bonuses paid to them on the basis of incorrect financial statements. 
C)  would not be legally bound to return any bonuses paid as a result of the incorrect financial statements. 
D)  must return the interest on any incentives payments as a result of the incorrect financial statements. 
E)  must return any bonuses paid as a result of the incorrect financial statements. 
A)  would be morally rather than legally culpable for the bonuses paid as a result of the incorrect financial statements. 
B)  have to forfeit their salaries to cover for the amount of the bonuses paid to them on the basis of incorrect financial statements. 
C)  would not be legally bound to return any bonuses paid as a result of the incorrect financial statements. 
D)  must return the interest on any incentives payments as a result of the incorrect financial statements. 
E)  must return any bonuses paid as a result of the incorrect financial statements.

Question 15

Securities laws are designed to give potential investors sufficient information so that they can make intelligent investment decisions based on factual information.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following statements is true of creating liabilities under Section 18?

Accepted Answer

A)  There is a liability under section 18 for simple negligence. 
B)  The plaintiff in a Section 18 case must prove reliance on the false or misleading filing of documents. 
C)  Inaccuracy of filing is sufficient to impose liability under Section 18. 
D)  The defendant's good faith is considered a defense under Section 18. 
E)  Freedom from fraud is an invalid defense under an action based on Section 18. 
A)  There is a liability under section 18 for simple negligence. 
B)  The plaintiff in a Section 18 case must prove reliance on the false or misleading filing of documents. 
C)  Inaccuracy of filing is sufficient to impose liability under Section 18. 
D)  The defendant's good faith is considered a defense under Section 18. 
E)  Freedom from fraud is an invalid defense under an action based on Section 18.

Question 17

An insider is a person who owns at least 75 percent of a security.

Accepted Answer

A) True 
 B)False

Question 18

In the context of providing untrue or misleading information to potential investors,proof of negligence will support an injunction.

Accepted Answer

A) True 
 B)False

Question 19

The registration statement to be filed with the Securities and Exchange Commission (SEC)includes

Accepted Answer

A)  statements which allow the holder to buy securities at a specified price within a designated time limit. 
B)  a written promise to repay a specified sum of money plus interest at a specified rate and length of time to fulfill the promise. 
C)  statements that show ownership of a bond, stock or other security. 
D)  an annual report on the activities of an organization distributed among its stakeholders. 
E)  a detailed disclosure of financial information about the issuer and the controlling individuals involved in the offering of securities for sale to the public. 
A)  statements which allow the holder to buy securities at a specified price within a designated time limit. 
B)  a written promise to repay a specified sum of money plus interest at a specified rate and length of time to fulfill the promise. 
C)  statements that show ownership of a bond, stock or other security. 
D)  an annual report on the activities of an organization distributed among its stakeholders. 
E)  a detailed disclosure of financial information about the issuer and the controlling individuals involved in the offering of securities for sale to the public.

Question 20

The Sarbanes-Oxley Act limits personal loans from a company to its executives to one loan of no more than $10,000,amortized over five years,at a time.

Accepted Answer

A) True 
 B)False

Exam 17: Financial and Securities Regulations

What are the three different forms of registration that apply to a state's application of blue sky laws?

According to the Securities Act of 1933,which of the following is considered legal during the prefiling period?

What is the civil liability under the Securities Act of 1933? Which sections of the Act directly apply to civil liability?

State the new or proposed rules issued by the Securities and Exchange Commission (SEC)post the revitalization process initiated by the Sarbanes-Oxley Act of 2002.

A prospectus is filed during the

What are the sanctions recognized by the 1933 Securities Act in case of untrue or misleading information being provided to a potential investor?

Under Section 11,the plaintiff has to prove reliance on the false or misleading prospectus or communication.

Restatements of financial reports have risen in number as a result of the Sarbanes-Oxley Act because companies have made efforts to maintain appropriate compliance with the law.

Title II of the Jumpstart Our Business Startups (JOBS)Act of 2012 prohibits companies to advertise or share publicly that they are seeking investments.

What are the provisions under Title II and Title III of the Jumpstart Our Business Startups (JOBS)Act of 2012?

The Sarbanes-Oxley Act requires that information pertaining to an insider's transaction be filed

Who is liable under the Section 11 civil liability provision dealing with registration statements?

According to the Securities and Exchange Commission (SEC),a person should be considered to be a temporary insider if that person conveys nonpublic information that was to have been kept confidential.This philosophy has become known as the

The Sarbanes-Oxley Act provides that whenever there is a restatement of the company's financial condition,then the executives

Securities laws are designed to give potential investors sufficient information so that they can make intelligent investment decisions based on factual information.

Which of the following statements is true of creating liabilities under Section 18?

An insider is a person who owns at least 75 percent of a security.

In the context of providing untrue or misleading information to potential investors,proof of negligence will support an injunction.

The registration statement to be filed with the Securities and Exchange Commission (SEC)includes

The Sarbanes-Oxley Act limits personal loans from a company to its executives to one loan of no more than $10,000,amortized over five years,at a time.

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