Question 1

The civil penalty provided by the Insider Trading and Securities Fraud Enforcement Act of 1988 for profits gained with nonpublic information is:

Accepted Answer

A)  imprisonment up to two years. 
B)  return of illegal profits gained. 
C)  recovery of double damages. 
D)  recovery of triple damages. 
E)  imprisonment up to a period of 10 years.

Question 2

Explain the term "waiting period" with regard to the registration of securities.

Accepted Answer

The answer of Explain the term "waiting period" with regard...

Question 3

Under the 1933 Act, proof of intentional violation is usually required to impose:

Accepted Answer

A)  criminal sanctions only. 
B)  criminal or civil sanctions. 
C)  criminal and pragmatic sanctions. 
D)  criminal, civil, and equitable (injunctive) sanctions. 
E)  pragmatic sanctions.

Question 4

What are the three different forms of registration that apply to a state's application of blue sky laws?

Accepted Answer

The answer of What are the three different forms of...

Question 5

Congress, through the PCAOB, limits the amount of damages private plaintiffs can recover and restricts attorney fees.

Accepted Answer

A) True 
 B)False

Question 6

What are the sanctions recognized by the 1933 Securities Act in case of untrue or misleading information being provided to a potential investor?

Accepted Answer

The answer of What are the sanctions recognized by the...

Question 7

What contributions did Sarbanes-Oxley Act make in the area of corporate governance?

Accepted Answer

The answer of What contributions did Sarbanes-Oxley Act make in...

Question 8

The SEC's adoption of rules and regulations relating to financial and other information furnished to the Commission comes under its _____ power.

Accepted Answer

A)  quasi-judicial 
B)  executive 
C)  quasi-executive 
D)  quasi-legislative 
E)  bargaining

Question 9

According to the SEC, a person should be considered to be a temporary insider if that person conveys nonpublic information that was to have been kept confidential. This philosophy has become known as the:

Accepted Answer

A)  quasi-insider theory. 
B)  implied-insider theory. 
C)  temporary insider theory. 
D)  misappropriation theory. 
E)  mosaic theory.

Question 10

The Insider Trading and Securities Fraud Enforcement Act of 1988 provides that suits alleging illegal use of nonpublic information may be filed up to a maximum period of _____ years after the wrongful transaction.

Accepted Answer

A)  six 
B)  ten 
C)  eight 
D)  five 
E)  seven

Question 11

The registration process waiting period typically lasts:

Accepted Answer

A)  10 days. 
B)  20 days. 
C)  30 days. 
D)  45 days. 
E)  60 days.

Question 12

A certificate of interest or participation in any profit-sharing agreement is an example of a(n):

Accepted Answer

A)  stock. 
B)  bond. 
C)  treasury stock. 
D)  security. 
E)  debenture.

Question 13

The Consumer Financial Protection Board was established under the Dodd-Frank Act.

Accepted Answer

A) True 
 B)False

Question 14

A(n) _____ is the individual or business organization offering a security for sale to the public.

Accepted Answer

A)  seller 
B)  controlling person 
C)  issuer 
D)  underwriter 
E)  financial sponsor

Question 15

What is the civil liability under the Securities Act of 1933? Which sections of the Act directly apply to civil liability?

Accepted Answer

The answer of What is the civil liability under the...

Question 16

_____ ads are brief announcements identifying the security and stating its price, by whom orders will be executed, and from whom a prospectus may be obtained.

Accepted Answer

A)  Tombstone 
B)  Institutional 
C)  Coupon 
D)  Adjunct 
E)  Overlay

Question 17

Due diligence defense requires that an expert prove that a reasonable investigation of the financial statements of the issuer and _____ was conducted.

Accepted Answer

A)  sellers 
B)  bailees 
C)  underwriters 
D)  controlling persons 
E)  guarantors

Question 18

Under the 1933 Act, the statute of limitations begins to run the moment the untrue statement or communication containing an omission is made public.

Accepted Answer

A) True 
 B)False

Question 19

Securities laws are designed to protect the buying public by requiring accurate information so that they can make intelligent investment decisions based on factual information.

Accepted Answer

A) True 
 B)False

Question 20

Section 10(b) and Rule 10b-5 are usually referred to as the _____ provisions of the 1934 Act.

Accepted Answer

A)  civil 
B)  discretionary 
C)  general duties 
D)  antifraud 
E)  rulemaking

Exam 17: Financial and Securities Regulations

The civil penalty provided by the Insider Trading and Securities Fraud Enforcement Act of 1988 for profits gained with nonpublic information is:

Explain the term "waiting period" with regard to the registration of securities.

Under the 1933 Act, proof of intentional violation is usually required to impose:

What are the three different forms of registration that apply to a state's application of blue sky laws?

Congress, through the PCAOB, limits the amount of damages private plaintiffs can recover and restricts attorney fees.

What are the sanctions recognized by the 1933 Securities Act in case of untrue or misleading information being provided to a potential investor?

What contributions did Sarbanes-Oxley Act make in the area of corporate governance?

The SEC's adoption of rules and regulations relating to financial and other information furnished to the Commission comes under its _____ power.

According to the SEC, a person should be considered to be a temporary insider if that person conveys nonpublic information that was to have been kept confidential. This philosophy has become known as the:

The Insider Trading and Securities Fraud Enforcement Act of 1988 provides that suits alleging illegal use of nonpublic information may be filed up to a maximum period of _____ years after the wrongful transaction.

The registration process waiting period typically lasts:

A certificate of interest or participation in any profit-sharing agreement is an example of a(n) :

The Consumer Financial Protection Board was established under the Dodd-Frank Act.

A(n) _____ is the individual or business organization offering a security for sale to the public.

What is the civil liability under the Securities Act of 1933? Which sections of the Act directly apply to civil liability?

_____ ads are brief announcements identifying the security and stating its price, by whom orders will be executed, and from whom a prospectus may be obtained.

Due diligence defense requires that an expert prove that a reasonable investigation of the financial statements of the issuer and _____ was conducted.

Under the 1933 Act, the statute of limitations begins to run the moment the untrue statement or communication containing an omission is made public.

Securities laws are designed to protect the buying public by requiring accurate information so that they can make intelligent investment decisions based on factual information.

Section 10(b) and Rule 10b-5 are usually referred to as the _____ provisions of the 1934 Act.