Question 1

Securities acquired under Rules 506,505 and 404 exemption from registration are considered restricted securities,and their resale may require registration.

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following powers is not available to the SEC pursuant to the Remedies Act?

Accepted Answer

A)  The SEC may start administrative proceedings against any person or entity regulated by the SEC. 
B)  The SEC may start administrative proceedings against any person or entity not regulated by the SEC. 
C)  The SEC may order an accounting and disgorgement of ill-gotten gains. 
D)  All of the above powers are available to the SEC under the Remedies Act. 
A)  The SEC may start administrative proceedings against any person or entity regulated by the SEC. 
B)  The SEC may start administrative proceedings against any person or entity not regulated by the SEC. 
C)  The SEC may order an accounting and disgorgement of ill-gotten gains. 
D)  All of the above powers are available to the SEC under the Remedies Act. D

Question 3

Which exemption to registration requirements exempts offerings of less than $5 million to no more than 35 nonaccredited purchasers over a 12-month period?

Accepted Answer

A)  Rule 504 exemption 
B)  Rule 505 exemption 
C)  Rule 506 exemption 
D)  Rule 507 exemption 
A)  Rule 504 exemption 
B)  Rule 505 exemption 
C)  Rule 506 exemption 
D)  Rule 507 exemption B

Question 4

An individual who receives information from an insider or temporary insider is called a:

Accepted Answer

A)  tippee. 
B)  tipper. 
C)  de facto insider. 
D)  virtual insider. 
A)  tippee. 
B)  tipper. 
C)  de facto insider. 
D)  virtual insider.

Question 5

SEC Rule 10b-5:

Accepted Answer

A)  is the principal antifraud rule relating to the secondary distribution of securities. 
B)  provides that a civil action for damages may be brought by any private investor who purchased or sold a security and was injured because of false,misleading,or undisclosed information. 
C)  applies to all securities,whether registered or not,as long as use is made of the mail,interstate commerce,or a national stock exchange. 
D)  all of the above. 
A)  is the principal antifraud rule relating to the secondary distribution of securities. 
B)  provides that a civil action for damages may be brought by any private investor who purchased or sold a security and was injured because of false,misleading,or undisclosed information. 
C)  applies to all securities,whether registered or not,as long as use is made of the mail,interstate commerce,or a national stock exchange. 
D)  all of the above.

Question 6

Under the 1990 Remedies Act,the SEC may start administrative proceedings against any person or entity,whether regulated by the SEC or not.

Accepted Answer

A) True 
 B)False

Question 7

Unlisted companies that have assets less than $10 million and fewer than 500 shareholders are subject to the reporting requirements of the Securities Exchange Act of 1934.

Accepted Answer

A) True 
 B)False

Question 8

The Securities Act of 1933 deals with the original distribution of securities by the issuing corporations.

Accepted Answer

A) True 
 B)False

Question 9

The Securities Act of 1933 imposes civil liability for making false or misleading statements in a registration statement.

Accepted Answer

A) True 
 B)False

Question 10

The SEC requires that annual shareholder reports be submitted to shareholders in any proxy solicitation on behalf of management.

Accepted Answer

A) True 
 B)False

Question 11

The Securities Exchange Act of 1934 deals with the __________ distribution of securities.

Accepted Answer

A)  primary 
B)  secondary 
C)  aftermarket 
D)  direct 
A)  primary 
B)  secondary 
C)  aftermarket 
D)  direct

Question 12

The Securities Act of 1933 prohibits the offering or sale of securities to the public in interstate commerce before a registration statement has been filed with the Securities and Exchange Commission (SEC).

Accepted Answer

A) True 
 B)False

Question 13

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.

Accepted Answer

A) True 
 B)False

Question 14

State laws designed to protect the public from the sale of worthless stocks and bonds are known as "clear sky" laws.

Accepted Answer

A) True 
 B)False

Question 15

An accountant who prepares any statement,opinion or other legal paper filed with the SEC with the preparer's consent is deemed to be practicing before the SEC.

Accepted Answer

A) True 
 B)False

Question 16

The Litigation Reform Act of 1995 was passed because of:

Accepted Answer

A)  congressional concern over an excess of frivolous private securities lawsuits. 
B)  the financial burdens placed on accountants and other professional advisors due to an excess of frivolous private securities lawsuits. 
C)  concern that the investors in a class action lawsuit have their interests fairly represented. 
D)  all of the above. 
A)  congressional concern over an excess of frivolous private securities lawsuits. 
B)  the financial burdens placed on accountants and other professional advisors due to an excess of frivolous private securities lawsuits. 
C)  concern that the investors in a class action lawsuit have their interests fairly represented. 
D)  all of the above.

Question 17

A __________ insider is someone retained by the corporation for professional services,such as an attorney,accountant,or investment banker.

Accepted Answer

A)  professional 
B)  corporate 
C)  temporary 
D)  virtual 
A)  professional 
B)  corporate 
C)  temporary 
D)  virtual

Question 18

Exchanges,brokers,and dealers who deal in the securities traded in interstate commerce or on any national security exchange must register with the SEC unless exempted by it.

Accepted Answer

A) True 
 B)False

Question 19

Bart and his brother-in-law,Ted,owned a small corporation.Ted was basically an investor,and Bart ran the entire business.As Ted became increasingly remote from day-to-day operations,Bart began to falsify some records so that Bart could take a greater share of the profits.This continued for years with Bart mailing falsified financial statements to Ted.When Bart suddenly became ill,Ted was forced to assume a greater role in the business on a temporary basis.During this time,Ted discovered the past deceptions and sued Bart under Rule l0b-5 of the Securities Exchange Act of 1934.Bart defended on the procedural ground that the business was local and had never been involved in interstate transactions of any kind.Moreover,the corporation was not listed on any stock exchange,nor did it have assets in excess of $10 million or 500 or more shareholders.Comment on the outcome of this case.

Accepted Answer

Bart will be held liable because the rul

Question 20

The Sarbanes-Oxley Act of 2002 requires written certification of the 10-K and 10-Q reports by each company's CFO and CEO.

Accepted Answer

A) True 
 B)False

Exam 46: Securities Regulation

Securities acquired under Rules 506,505 and 404 exemption from registration are considered restricted securities,and their resale may require registration.

Which of the following powers is not available to the SEC pursuant to the Remedies Act?

Which exemption to registration requirements exempts offerings of less than $5 million to no more than 35 nonaccredited purchasers over a 12-month period?

An individual who receives information from an insider or temporary insider is called a:

SEC Rule 10b-5:

Under the 1990 Remedies Act,the SEC may start administrative proceedings against any person or entity,whether regulated by the SEC or not.

Unlisted companies that have assets less than $10 million and fewer than 500 shareholders are subject to the reporting requirements of the Securities Exchange Act of 1934.

The Securities Act of 1933 deals with the original distribution of securities by the issuing corporations.

The Securities Act of 1933 imposes civil liability for making false or misleading statements in a registration statement.

The SEC requires that annual shareholder reports be submitted to shareholders in any proxy solicitation on behalf of management.

The Securities Exchange Act of 1934 deals with the __________ distribution of securities.

The Securities Act of 1933 prohibits the offering or sale of securities to the public in interstate commerce before a registration statement has been filed with the Securities and Exchange Commission (SEC).

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.

State laws designed to protect the public from the sale of worthless stocks and bonds are known as "clear sky" laws.

An accountant who prepares any statement,opinion or other legal paper filed with the SEC with the preparer's consent is deemed to be practicing before the SEC.

The Litigation Reform Act of 1995 was passed because of:

A __________ insider is someone retained by the corporation for professional services,such as an attorney,accountant,or investment banker.

Exchanges,brokers,and dealers who deal in the securities traded in interstate commerce or on any national security exchange must register with the SEC unless exempted by it.

The Sarbanes-Oxley Act of 2002 requires written certification of the 10-K and 10-Q reports by each company's CFO and CEO.

The Nature and Sources of Law

The Court System and Dispute Resolution

Business Ethics, Social Forces, and the Law

The Constitution As the Foundation of the Legal Environment

Government Regulation of Competition and Prices

Administrative Agencies

The Legal Environment of International Trade

Crimes

Torts

Intellectual Property Rights

Cyberlaw

Nature and Classes of Contracts: Contracting on the Internet

Formation of Contracts: Offer and Acceptance

Capacity and Genuine Assent

Consideration

Legality and Public Policy

Writing, Electronic Forms, and Interpretation of Contracts

Third Persons and Contracts

Discharge of Contracts

Breach of Contract and Remedies

Personal Property and Bailments

Legal Aspects of Supply Chain Management

Nature and Form of Sales

Title and Risk of Loss

Product Liability: Warranties and Torts

Obligations and Performance

Remedies for Breach of Sales Contracts

Kinds of Instruments, parties, and Negotiability

Transfers of Negotiable Instruments and Warranties of Parties

Liability of the Parties Under Negotiable Instruments

Checks and Funds Transfers

Nature of the Debtor-Creditor Relationship

Consumer Protection

Secured Transactions in Personal Property

Bankruptcy

Insurance

Agency

Third Persons in Agency

Regulation of Employment

Equal Employment Opportunity Law

Types of Business Organizations

Partnerships

LPs, LLCs, and LLPs

Corporate Formation

Shareholder Rights in Corporations

Accountants Liability and Malpractice

Management of Corporations

Real Property

Environmental Law and Land Use Controls

Leases

Decedents Estates and Trusts

Filters