Exam 39: Securities Regulation

The Klodhoffer Corporation has assets amounting to $2 million and needs additional capital to finance expansion of its operation.The board of directors decides to promote an issue of $1.5 million of common stock in order to raise capital.At the time the stock is issued,Klodhoffer has 250 shareholders owning common stock.If Klodhoffer is to trade the stock over the counter,does it need to register with the SEC?

Under the 1934 Act,willful violations may result in:

Every registration filed with the SEC is held in confidence until the business permits disclosure.

__________,promulgated by the SEC,provides a nonexclusive safe harbor for securing the intrastate exemption.

A "private placement" involves no public offering and is exempt from registration.

Willful violations of the Securities Act of 1933 are subject to a fine of not more than __________ and/or imprisonment of not more than __________ or both.

A defense to an action based on material omissions and untrue statements contained in a registration statement is:

The Securities Enforcement Remedies and Penny Stock Reform Act of 1990 granted the SEC power to:

Only civil liability may be imposed for violations of the Securities Act of 1933.

As amended in 2008,SEC rules define a small business issuer as a noninvestment company with less than $10 million in public float.

The registration requirement of the 1934 Act pertains to the entire class of securities rather than to a specific offering.

If Terry makes a tender offer to the owners of Pizza Village's registered stock,he must file a statement with the SEC if he:

SEC regulations concerning fraud in securities transactions apply to:

"Insider trading" rules pertain to:

If a company has assets of over $10 million but trades its stock over the counter,it is nevertheless required to comply with the 1934 Act if it has:

Bonds are included in the definition of the term "security."

The 1933 Act imposes liability for material misstatements and omissions in a registration statement on:

All of the following are types of illegal insider trading EXCEPT:

The Reform Act's safe harbor under the 1933 Act eliminates civil liability based on an untrue statement or omission if a forward-looking statement is:

With few exceptions,an issuer must file preliminary proxy statements and forms with the SEC at least 10 days before they are sent to investors.