Question 1

The SEC has defined the intrastate offering exemption more precisely in Rule 147.According to this rule:

Accepted Answer

A) intrastate resale of such securities is permitted for nine months. 
B) interstate resale of such securities is permitted for nine months. 
C) intrastate resale of such securities is permitted for twelve months. 
D) interstate resale of such securities is permitted for twelve months. 
A) intrastate resale of such securities is permitted for nine months. 
B) interstate resale of such securities is permitted for nine months. 
C) intrastate resale of such securities is permitted for twelve months. 
D) interstate resale of such securities is permitted for twelve months.

Question 2

Harmer Company has filed a registration statement under the 1933 Act for purposes of issuing $5,000,000 of debentures.The registration statement has not been declared effective.Harmer wants to issue a press release concerning its plans to expand its operations.It also wants to telephone several large investors and tell them why they should buy the debentures.Will these activities cause Harmer to violate Section 5 of the Securities Act?

Accepted Answer

No,these activities will not cause Harme

Question 3

Under the 1933 Act,which of the following is allowed to state the price at which the securities will be offered?

Accepted Answer

A) A notice about a prospective offering published during the pre-filing period 
B) A tombstone ad 
C) A free-writing prospectus 
D) A preliminary prospectus 
A) A notice about a prospective offering published during the pre-filing period 
B) A tombstone ad 
C) A free-writing prospectus 
D) A preliminary prospectus

Question 4

Which of the following instruments is NOT considered to be a security?

Accepted Answer

A) Mortgage notes 
B) Treasury stock 
C) Certificate of interest 
D) Investment contract 
A) Mortgage notes 
B) Treasury stock 
C) Certificate of interest 
D) Investment contract

Question 5

In a due diligence meeting,officers and experts confer with each other for the purpose of:

Accepted Answer

A) increasing corporate transparency and responsibility. 
B) ascertaining that the registration statement contains no misstatements or omissions of material fact. 
C) creating strategies for maximizing capital raised from public issue of securities. 
D) issuing a proxy solicitation document for issuance of securities. 
A) increasing corporate transparency and responsibility. 
B) ascertaining that the registration statement contains no misstatements or omissions of material fact. 
C) creating strategies for maximizing capital raised from public issue of securities. 
D) issuing a proxy solicitation document for issuance of securities.

Question 6

Eastern Company wants to make an offering of securities exempt from registration under Rule 504 of the Securities Act of 1933.Which of the following is a requirement of Rule 504?

Accepted Answer

A) Eastern may sell to no more than 35 unaccredited purchasers. 
B) Eastern must sell only to investors who are able to protect themselves by making informed investment decisions. 
C) Eastern must be a nonpublic issuer under the Securities Exchange Act. 
D) Eastern may not make any general solicitations of investors. 
A) Eastern may sell to no more than 35 unaccredited purchasers. 
B) Eastern must sell only to investors who are able to protect themselves by making informed investment decisions. 
C) Eastern must be a nonpublic issuer under the Securities Exchange Act. 
D) Eastern may not make any general solicitations of investors.

Question 7

Prior to the filing of a 1933 Act registration statement,the issuer may use a Rule 134 tombstone advertisement to make investors aware of the upcoming offering of securities.

Accepted Answer

A) True 
 B)False

Question 8

In addition to an injunction,the SEC may also ask the courts to grant ________ relief,which may include the disgorgement of profits that a defendant has made in a fraudulent sale or in an illegal insider trading transaction.

Accepted Answer

A) compensatory 
B) punitive 
C) ancillary 
D) nominal 
A) compensatory 
B) punitive 
C) ancillary 
D) nominal

Question 9

Barchrome Company issued debentures in November 1996 to raise capital to finance a new manufacturing plant.John was one of the small investors who bought those debentures.In December 2000,John discovered that Barchrome's registration statement contained material misstatements (it had overstated current assets by 11 percent and sales by 8 percent).John sued Barchrome in January 2001.Is Barchrome liable?

Accepted Answer

A) Yes,Barchrome is liable under Section 12(
A) (2)of the 1933 Act. 
B) No,Barchrome is not liable because the statute of limitations under Section 12(a)(2)has run out. 
C) No,Barchrome is not liable because the statute of limitations under Section 11 has run out. 
D) Yes,Barchrome is liable under Section 11 of the 1933 Act. 
A) Yes,Barchrome is liable under Section 12(
A) (2)of the 1933 Act. 
B) No,Barchrome is not liable because the statute of limitations under Section 12(a)(2)has run out. 
C) No,Barchrome is not liable because the statute of limitations under Section 11 has run out. 
D) Yes,Barchrome is liable under Section 11 of the 1933 Act.

Question 10

The executive branch of the SEC:

Accepted Answer

A) decides whether a person has violated the securities laws. 
B) brings enforcement actions against alleged violators. 
C) makes new laws regulating securities. 
D) promulgates rules and regulation. 
A) decides whether a person has violated the securities laws. 
B) brings enforcement actions against alleged violators. 
C) makes new laws regulating securities. 
D) promulgates rules and regulation.

Exam 45: Securities Regulation

The SEC has defined the intrastate offering exemption more precisely in Rule 147.According to this rule:

Under the 1933 Act,which of the following is allowed to state the price at which the securities will be offered?

Which of the following instruments is NOT considered to be a security?

In a due diligence meeting,officers and experts confer with each other for the purpose of:

Eastern Company wants to make an offering of securities exempt from registration under Rule 504 of the Securities Act of 1933.Which of the following is a requirement of Rule 504?

Prior to the filing of a 1933 Act registration statement,the issuer may use a Rule 134 tombstone advertisement to make investors aware of the upcoming offering of securities.

In addition to an injunction,the SEC may also ask the courts to grant ________ relief,which may include the disgorgement of profits that a defendant has made in a fraudulent sale or in an illegal insider trading transaction.

The executive branch of the SEC:

The Nature of Law

The Resolution of Private Disputes

Business and the Constitution

Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking

Criminal Law and Procedure

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Unfair Competition

Introduction to Contracts

The Agreement: Offer

The Agreement: Acceptance

Consideration

Reality of Consent

Capacity to Contract

Illegality

Writing

Rights of Third Parties

Performance and Remedies

Formation and Terms of Sales Contracts

Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contracts

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance Law

Introduction to Credit and Secured Transactions

Security Interests in Personal Property

Bankruptcy

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Transfers

The Agency Relationship

Third-Party Relations of the Principal and the Agent

Introduction to Forms of Business and Formation of Partnerships

Operation of Partnerships and Related Forms

Partners Dissociation and Partnerships Dissolution and Winding up

Limited Liability Companies, limited Partnerships, and Limited Liability Limited Partnerships

History and Nature of Corporations

Organization and Financial Structure of Corporations

Management of Corporations

Shareholders Rights and Liabilities

Legal and Professional Responsibilities of Auditors, Consultants, and Securities Professionals

Administrative Law

The Federal Trade Commission Act and Consumer Protection Laws

Antitrust: the Sherman Act

The Clayton Act, the Robinsonpatman Act, and Antitrust Exemptions and Immunities

Employment Law

Environmental Regulation

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