Exam 41: Corporationssecurities Law Corporate Governance

Generally, stock offerings that involve a small amount of money are not ex?empt from securities registration requirements.

A corporation whose security does not qualify for an exemption can dispense with the requirement of a registration statement.

"Blue sky laws" are federal securities laws.

Standard Corporation is a public company whose shares are traded in public securities markets. Standard's officers want to set up and main?tain a system of "good corporate governance." What is "corporate govern?ance"? What is its practical significance? What, at a minimum, should a "good" system of corporate governance include?

Most securities can be resold without registration.

Generally, stock offerings that are made in a limited manner during any twelve-month period are ex?empt from securities registration requirements.

Section 10(b) of the Securities Exchange Act of 1934 covers only corporate officers, di?rectors, and majority shareholders.

Generally, states do not have antifraud pro?visions that cover securities.

Kirk is the chief financial officer of Lemon Corporation, which is re?quired to file certain financial statements with the Securities and Exchange Commission (SEC). Under the Sarbanes-Oxley Act of 2002, Kirk must personally

GR8 Stuf Company files a registration statement with the SEC before making an offering to the general public. The registration contains false, immaterial statements of which the investors are unaware. GR8 Stuf is charged with violating the Securities Act of 1933. GR8 Stuf's best defense is

State securities laws apply only to interstate transactions.

Fact Pattern 41-1A Dhani, an accountant for Eureka, Inc., learns of undisclosed com?pany plan?s to market a new laptop. Dhani buys 1,000 shares of Eureka stock. He re?veals the company plans to Fay, who buys 500 shares. Fay tells Geoff, who tells Hu, each of whom buy 100 shares. They knows that Fay got her informa?tion from Dhani. When Eureka publicly an?nounces its new laptop, Dhani, Fay, Geoff, and Hu sell their stock for a profit. -Refer to Fact Pattern 41-1A. Under the Securities Ex?change Act of 1934, Hu is most likely

Excel Aviation Corporation is required to register its securities under Section 12 of the Securities Exchange Act of 1934. Section 14(a) of the act regulates

Violations of the Securities Exchange Act of 1934 may be subject to criminal prosecution.

A registration statement must include a financial statement certified by an independent public accounting firm.

An offering of $4 million in securities by a non-invest?ment company can be exempt from some of the require?ments of the Securities Act of 1933.

Buying or selling securities on the basis of nonpublic information is illegal only if the profit from the transaction is unreasonable.

North American Properties, Inc., and its officers, directors, and share?holders, buy and sell securities. Section 16(b) of the Securities Exchange Act of 1934 covers

The least common forms of securities are stocks and bonds issued by corporations.

Private parties cannot sue violators of Section 10(b) and Rule 10b-5.