Exam 41: Investor Protection and E-Securities Transactions

A(n) ________ refers to a document that an issuer of securities files with the SEC that contains required information about the issuer, the securities to be issued, and other relevant information.

Which of the following is true of a Regulation A+ offering?

Which of the following best defines an initial public offering?

________ requires securities offered to the public through the use of the mails or any facility of interstate commerce to be registered with the SEC by means of a registration statement and an accompanying prospectus.

The ________ is a federal statute primarily designed to prevent fraud in the trading of securities after they are issued.

An offering circular must be provided to the investors immediately after the purchase of a Regulation A+ offering.

SEC Rule 506 is known as the ________.

An issuer is permitted to assert a due diligence defense against the imposition of Section 11 liability.

Who among the following is considered a statutory insider?

The ________ imposes liability under Section 10(b) and Rule 10b-5 on an outsider who misappropriates information about a company, in violation of his or her fiduciary duty, and then trades in the securities of that company.

It is legal for a company employee to make a profit by personally purchasing shares of the corporation prior to public release of favorable information.

In order to be found guilty for violation of Rule 10b-5, intentional conduct (scienter) must be proven.

A prospectus is a written disclosure provided with the registration statement that helps the SEC to evaluate the financial risk of an investment.

The ________ is a federal statute that permits the SEC to obtain a civil penalty of up to three times the illegal benefits received from insider trading.

A tipper cannot be held liable for the profits made by the tippee.

List the securities exempt from registration with the SEC.

The electronic data and record system of the Securities and Exchange Commission is known as ________.

A WKSI is an SEC category of issuer.

Which of the following is true of the small offering exemption?

The purpose of the JOBS Act is to make it more challenging (and thus, more highly regulated) for start-up companies to raise capital through IPOs.