Exam 45: Securities Regulation

The judicial branch of the SEC:

Securities Act Rule 506 requires an issuer to sell to no more than 35 accredited investors.

Which of the following is true about the Williams Act?

Rule ________ of the SEC prohibits insider trading on nonpublic corporate information.

The Supreme Court's Howey test defines ________ as an investment of money in a common enterprise with an expectation of profits solely from the efforts of others.

The Securities and Exchange Commission (SEC)has the power to impose civil fines up to $500,000 and issue cease and desist orders.

The ________ underwriting is typically used only to sell common shares to existing shareholders pursuant to a preemptive rights offering.

The State of Delaware has adopted business combination moratorium statutes to deter tender offers from being made.

Jargons Company is a well-known and seasoned public issuer of securities.It is going to file a registration statement with the SEC on February 1,2012,for a new security offering.Rule 163 of the 1933 Act will allow it to use a ________ in January 2012.

Jereboah Company is a nonpublic company that wants to sell $2.7 million of preferred shares under Rule 506 of Regulation D of the Securities Act of 1933.Jereboah plans to sell to 42 investors,including 10 mutual funds.The other 32 investors are individual investors with various levels of experience in making securities investment decisions.Jereboah also hopes to attract additional investors using an advertisement in The Wall Street Journal.May Jereboah use Rule 506? Assuming it can,what disclosure must Jereboah make to the investors?

What is the term for the period of time when a security may be offered and sold to the public under section 5 of the 1933 Securities Act?

Under Section 4(a)(2)of the 1993 Act,registration is not required for:

Which of the following was created in response to widespread misstatements and omissions in corporate financial statements?

Rule 10b-5 applies to all transactions in all securities listed on an American stock exchange,and the purchase or sale of any other security in the United States,whether or not registered under the 1933 Act or the 1934 Act.

The Sarbanes-Oxley Act of 2002 extends the statute of limitations to three years after discovery of facts constituting a violation of Section 11 of the 1933 Act and seven years after the violation.

Section 12(a)(1)of the 1933 Act imposes liability on any person who violates the provisions of Section 5.Liability extends to any purchaser to whom an illegal offer or sale was made.Which of the following describes the purchaser's remedy?

Which of the following statements about the Capital Markets Efficiency Act of 1996 (CMEA)is false?

Criminal actions under the 1933 Act are brought by the ________.

Which of the following can the SEC issue that directs a defendant to stop violating the securities laws and abstain from future violations?

________ creates three important periods of time in the life of a securities offering: (1)the pre-filing period,(2)the waiting period,and (3)the post-effective period.