Exam 42: B: Securities Law Corporate Governance

Catalina promises high returns to Darby and other investors,who then agree to trust their funds to Catalina.She uses these funds to pay previous investors.This is

Fact Pattern 42-1A Fresh Fruits & Veggies,Inc. ,wants to make an initial public offering of securi?ties.Fresh believes that it qualifies for an exemption under Regulation A from the full registration requirement of the federal Securities Act of 1933. -Refer to Fact Pattern 42-1A.If Fresh is exempt from the federal registration requirement,Fresh is

Hobie,the chief executive officer of Ideal Gamers,Inc.(IGI),inten?tionally understates the amount of IGI's debts in information provided to investors as part of an issue of IGI stock.Jack buys the stock and suffers a loss.Hobie may be subject to

The Securities and Exchange Commission can bring a civil action against anyone who aids in a violation of the Securities Exchange Act of 1934.

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

For criminal sanctions to be imposed under Section 10(b)of the Securities Exchange Act of 1934 and SEC Rule 10b-5,scienter must not exist.

Fact Pattern 42-1A Fresh Fruits & Veggies,Inc. ,wants to make an initial public offering of securi?ties.Fresh believes that it qualifies for an exemption under Regulation A from the full registration requirement of the federal Securities Act of 1933. -Refer to Fact Pattern 42-1A.Fresh decides to sell its new securities via the Internet.This offering

Flux Corporation is a public company whose shares are traded in the public securities markets.Under the Sarbanes-Oxley Act of 2002,Flux is subject to the direct corporate governance requirements of

The Securities and Exchange Commission does not regulate the content of proxy statements.

Lex,a salesperson for Macro Corporation,learns that Macro will in?crease the dividend it pays to shareholders.Lex buys 1,000 shares of Macro stock.When the price increases,Lex sells his shares for a profit.Lex would not be liable for insider trading if the information about the dividend was

Most private,small-business,noninvestment company offers of securities are not exempt from the registration requirements.

Under the Sarbanes-Oxley Act of 2002,chief executive officers no longer need to certify the accuracy of information in corporate financial statements.

The Securities Exchange Act of 1934 is a one-time disclosure law.

Exemptions from federal securities laws are exemptions from state laws.

Frothy Beverage Corporation is a public company whose shares are traded in the public securities markets.Under the Securities Act of 1933,Frothy is required to

Start-Up Enterprises,Inc. ,completes its registration process and be?gins ad?vertising the availability of its new issue of securi?ties.Start-Up places a tomb?stone ad in the financial papers.This ad tells pro?spective investors

Flo-Thru Plumbing Corporation is poised to issue securities that,under the Securities Act of 1933,are "exempt." This means that the securities can be sold

The Securities and Exchange Commission administrative law judges hear cases involving alleged securities law violations.

Rico,an engineer for Shur-2-Gro Seed Corporation,learns that Shur-2-Gro has developed a corn hybrid to triple the output of any farm.Rico buys 20,000 shares of Shur-2-Gro stock.He tells Taylor,who buys 15,000 shares.After the new hybrid is announced publicly,the price of Shur-2-Gro stock in?creases.Rico and Taylor sell their shares for a profit.Under the Securities Exchange Act of 1934,liability may be imposed on

Anyone who wrongfully obtains inside information and trades on it for his or her personal gain can be liable under SEC Rule 10b-5.