Question 1

Parties who are involved with or who promote the initial sale of securities fall into one or more of four roles.Mention these roles.

Accepted Answer

The Securities Act of 1933 regulates any

Question 2

Which of the following statements is true of short-swing profits?

Accepted Answer

A)  Short-swing profits refer to any profits made by insiders who buy and sell company stock within a three-month time period. 
B)  The short-swing profits rule of Section 16 depends on misuse of information. 
C)  Short-swing profits refer to those profits that have been made within a six-month time period. 
D)  The short-swing profits policy takes into consideration order of purchase and sale in determining its legality. 
E)  Short-swing profits are calculated on the highest price in and the lowest price out during any fiscal period. 
A)  Short-swing profits refer to any profits made by insiders who buy and sell company stock within a three-month time period. 
B)  The short-swing profits rule of Section 16 depends on misuse of information. 
C)  Short-swing profits refer to those profits that have been made within a six-month time period. 
D)  The short-swing profits policy takes into consideration order of purchase and sale in determining its legality. 
E)  Short-swing profits are calculated on the highest price in and the lowest price out during any fiscal period.

Question 3

What must an expert prove to successfully present the defense of due diligence?

Accepted Answer

To establish the due diligence defense,t

Question 4

Which of the following is a major provision of the State blue sky laws?

Accepted Answer

A)  They impose another level of securities regulations and govern interstate securities transactions that are beyond federal laws. 
B)  They relax some of the regulatory burden for investments in smaller businesses or start-ups. 
C)  They provide protection of whistleblowers who reveal fraud. 
D)  They reformed the Federal Reserve. 
E)  They created the Public Company Accounting Oversight Board. 
A)  They impose another level of securities regulations and govern interstate securities transactions that are beyond federal laws. 
B)  They relax some of the regulatory burden for investments in smaller businesses or start-ups. 
C)  They provide protection of whistleblowers who reveal fraud. 
D)  They reformed the Federal Reserve. 
E)  They created the Public Company Accounting Oversight Board.

Question 5

A(n)______ is a person who learns of nonpublic information from an insider,and is generally viewed as a temporary insider.

Accepted Answer

A)  underwriter 
B)  controlling person 
C)  issuer 
D)  tippee 
E)  dealer 
A)  underwriter 
B)  controlling person 
C)  issuer 
D)  tippee 
E)  dealer

Question 6

According to the Securities Act of 1933,an issuer of securities who complies with the federal law must prepare a(n)

Accepted Answer

A)  issuer's statement. 
B)  registration statement. 
C)  licensing agreement. 
D)  statute of limitations. 
E)  secured promissory note. 
A)  issuer's statement. 
B)  registration statement. 
C)  licensing agreement. 
D)  statute of limitations. 
E)  secured promissory note.

Question 7

What are the common issues regarding litigation under Section 10(b)and Rule 10b-5 of the Securities Exchange Act of 1934?

Accepted Answer

The common issues regarding litigation u

Question 8

The Sarbanes-Oxley Act focuses on decreasing the independence of the auditors.

Accepted Answer

A) True 
 B)False

Question 9

The Securities and Exchange Commission's (SEC)right to conduct investigations is based on its

Accepted Answer

A)  quasi-executive power. 
B)  federal power. 
C)  quasi-judicial power. 
D)  constitutional right. 
E)  quasi-legislative power. 
A)  quasi-executive power. 
B)  federal power. 
C)  quasi-judicial power. 
D)  constitutional right. 
E)  quasi-legislative power.

Question 10

Prohibitions against insiders from engaging in short-swing profits are enforced by the

Accepted Answer

A)  Securities and Exchange Commission (SE
C) . 
B)  Federal Trade Commission (FT
C) . 
C)  Federal Reserve. 
D)  issuer of the security or by a person who owns a security of the issuer. 
E)  executive officers, accounting officers, and chief financial officers. 
A)  Securities and Exchange Commission (SE
C) . 
B)  Federal Trade Commission (FT
C) . 
C)  Federal Reserve. 
D)  issuer of the security or by a person who owns a security of the issuer. 
E)  executive officers, accounting officers, and chief financial officers.

Question 11

What provisions have been made by the Sarbanes-Oxley Act to provide protection for whistleblowers?

Accepted Answer

The Sarbanes-Oxley Act provides protecti

Question 12

Liability traditionally has been imposed against violators even though they lacked any wrongful intent.

Accepted Answer

A) True 
 B)False

Question 13

The Uniform Securities Act has been the model for blue sky laws since 1956.

Accepted Answer

A) True 
 B)False

Question 14

Section 10(b)and Rule 10b-5 are usually referred to as the ______ provisions of the 1934 Act.

Accepted Answer

A)  civil 
B)  discretionary 
C)  general duties 
D)  antifraud 
E)  rulemaking 
A)  civil 
B)  discretionary 
C)  general duties 
D)  antifraud 
E)  rulemaking

Question 15

A defrauding seller usually benefits from an increase in the value of the securities.

Accepted Answer

A) True 
 B)False

Question 16

The process of registration created by the Uniform Securities Act is known as

Accepted Answer

A)  registration by coordination. 
B)  registration by notification. 
C)  registration by qualification. 
D)  registration by pronouncement. 
E)  registration by announcement. 
A)  registration by coordination. 
B)  registration by notification. 
C)  registration by qualification. 
D)  registration by pronouncement. 
E)  registration by announcement.

Question 17

The Public Company Accounting Oversight Board was created by the

Accepted Answer

A)  Securities Act of 1933. 
B)  Securities Exchange Act of 1934. 
C)  Security Fraud Enforcement Act. 
D)  Sarbanes-Oxley Act. 
E)  Sherman Act. 
A)  Securities Act of 1933. 
B)  Securities Exchange Act of 1934. 
C)  Security Fraud Enforcement Act. 
D)  Sarbanes-Oxley Act. 
E)  Sherman Act.

Question 18

The Securities Act of 1933 is a disclosure law with respect to the initial sale of securities to the public.

Accepted Answer

A) True 
 B)False

Question 19

What was the purpose of the Private Securities Litigation Reform Act of 1995? What are some of the provisions of the Act?

Accepted Answer

The Private Securities Litigation Reform

Question 20

A plaintiff in a Rule 10b-5 suit is required to prove damages in order to prevail.

Accepted Answer

A) True 
 B)False

Exam 17: Financial and Securities Regulations

Parties who are involved with or who promote the initial sale of securities fall into one or more of four roles.Mention these roles.

Which of the following statements is true of short-swing profits?

What must an expert prove to successfully present the defense of due diligence?

Which of the following is a major provision of the State blue sky laws?

A(n)______ is a person who learns of nonpublic information from an insider,and is generally viewed as a temporary insider.

According to the Securities Act of 1933,an issuer of securities who complies with the federal law must prepare a(n)

What are the common issues regarding litigation under Section 10(b)and Rule 10b-5 of the Securities Exchange Act of 1934?

The Sarbanes-Oxley Act focuses on decreasing the independence of the auditors.

The Securities and Exchange Commission's (SEC)right to conduct investigations is based on its

Prohibitions against insiders from engaging in short-swing profits are enforced by the

What provisions have been made by the Sarbanes-Oxley Act to provide protection for whistleblowers?

Liability traditionally has been imposed against violators even though they lacked any wrongful intent.

The Uniform Securities Act has been the model for blue sky laws since 1956.

Section 10(b)and Rule 10b-5 are usually referred to as the ______ provisions of the 1934 Act.

A defrauding seller usually benefits from an increase in the value of the securities.

The process of registration created by the Uniform Securities Act is known as

The Public Company Accounting Oversight Board was created by the

The Securities Act of 1933 is a disclosure law with respect to the initial sale of securities to the public.

What was the purpose of the Private Securities Litigation Reform Act of 1995? What are some of the provisions of the Act?

A plaintiff in a Rule 10b-5 suit is required to prove damages in order to prevail.

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