Question 1

Once a registration statement has been filed, a waiting period begins while the Securities and Exchange Commission reviews the statement.

Accepted Answer

A) True 
 B)False

Question 2

Bonds & Stocks Corporation, and its officers, directors, and sharehold?ers, buy and sell securities. SEC Rule 10b-5 applies to the purchase or sale of

Accepted Answer

A)  a security by a financial corporation only. 
B)  a security involving a corporate insider only. 
C)  a security involving short-swing profits only. 
D)  any security.

Question 3

The Securities and Exchange Commission (SEC) requires companies to file certain information electronically so that it can be posted on the SEC's EDGAR database.

Accepted Answer

A) True 
 B)False

Question 4

HVAC Heating & Air Conditioning, Inc., is a public company whose shares are traded in the public securities markets. Under the Sarbanes-Oxley Act of 2002, to ensure that HVAC's financial results are accurate and timely, the firm's senior officers must set up and maintain

Accepted Answer

A)  internal "disclosure controls and procedures." 
B)  external "release and reveal timetables." 
C)  personal "peruse and review liability policies." 
D)  public "information and discussion forums."

Question 5

For civil sanctions to be imposed under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, the violator must not have had an intent to defraud or knowledge of his or her misconduct.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A)  the declaration of dividends by Grain Mills's board of directors. 
B)  the later re-registration of Grain Mills's securities. 
C)  the short-swing activities of Grain Mills's insiders. 
D)  the solicitation of proxies from Grain Mills's shareholders.

Question 7

Corporate accountability can be increased by imposing strict disclosure requirements and harsh penalties for securities laws.

Accepted Answer

A) True 
 B)False

Question 8

Fact Pattern 42-1B (Questions B12-B13 apply)
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 tells Geoff. Both Fay and Geoff buy 100 shares. Geoff knows that Fay got her informa?tion from Dhani. When Eureka! publicly an?nounces its new laptop, Dhani, Fay, and Geoff sell their stock for a profit.
-Refer to Fact Pattern 42-1B. Under the Securities Ex?change Act of 1934, Fay is most likely

Accepted Answer

A)  liable for insider trading. 
B)  not liable because Fay did not prevent others from profiting. 
C)  not liable because Fay did not misappropriate any information. 
D)  not liable because Fay does not work for Eureka!

Question 9

Global Trade Corporation is a public company that is poised to issue securities that do not qualify for an exemption from registration. This means that Global Trade must

Accepted Answer

A)  file a registration statement with the SEC. 
B)  issue the securities through an online registration site. 
C)  refrain from issuing the securities to unregistered investors. 
D)  register the securities with a national stock exchange.

Question 10

Most securities can be resold without registration.

Accepted Answer

A) True 
 B)False

Question 11

Every state has it own corporate securities laws that regulate the offer and sale of securities within tis borders.

Accepted Answer

A) True 
 B)False

Question 12

When OmniOil Corporation wishes to issue certain securities, it must provide sufficient in?for?mation for Petra, and other unsophisticated investors, to evaluate the fi?nancial risk involved. Specifically, the law imposes liability for making a false statement or omission that is "material." What sort of information would Petra consider material?

Accepted Answer

The answer of When OmniOil Corporation wishes to issue certain...

Question 13

Rollo is the chief executive officer of Specialty Magazines, Inc., which is required to file certain financial reports with the Securities and Exchange Commission (SEC). Under the Sarbanes-Oxley Act of 2002, Rollo must

Accepted Answer

A)  certify that the reports are complete and accurate. 
B)  designate a corporate official to assume liability for inaccuracies. 
C)  do nothing. 
D)  read the reports and be prepared to answer questions about them.

Question 14

Securities generally do not include any documents evidencing corporate ownership or debt.

Accepted Answer

A) True 
 B)False

Question 15

Securities offerings in unlimited amounts can be exempt from the registration requirements in certain circumstances.

Accepted Answer

A) True 
 B)False

Question 16

Cotton Products Corporation is a public company whose shares are traded in the public securities markets. With respect to financial and other significant information concerning its securities, the Securities Act of 1933

Accepted Answer

A)  imposes increased responsibility on chief corporate executives. 
B)  prevents insiders from trading among themselves. 
C)  requires disclosure. 
D)  creates a "safe harbor" for companies to make forward-looking statements.

Question 17

Boats & Yachts Corporation is a public company, which California regulates and in which Dorian invests. The Sarbanes-Oxley Act of 2002 introduced direct federal corporate governance requirements to

Accepted Answer

A)  public companies. 
B)  private investors. 
C)  state regulators. 
D)  the Securities and Exchange Commission.

Question 18

To raise capital to form Business Apps Corporation with Cris, Dona sells bonds and stock in other companies, and plans to register an initial public of?fer?ing under the Securities Act of 1933. SEC Rule l0b-5 covers

Accepted Answer

A)  just about any form of securities. 
B)  only bonds. 
C)  only securities registered under the Securities Act of 1933. 
D)  only stock.

Question 19

Rico does not work for Street Bikes Company, but wrong?fully obtains inside information concerning the firm. Based on the in?forma?tion, Rico buys and sells Street Bikes stock for personal gain. The Securities and Exchange Commission prose?cutes Rico, arguing that he is liable because he stole in?formation right?fully belonging to another. This argument is

Accepted Answer

A)  the blue-sky theory. 
B)  the misappropriation theory. 
C)  the free-writing prospectus theory. 
D)  the tipper/tippee theory.

Question 20

Corporate "outsiders" may not be held liable for insider trading under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5.

Accepted Answer

A) True 
 B)False

Exam 42: Securities Law Corporate Governance

Once a registration statement has been filed, a waiting period begins while the Securities and Exchange Commission reviews the statement.

Bonds & Stocks Corporation, and its officers, directors, and sharehold?ers, buy and sell securities. SEC Rule 10b-5 applies to the purchase or sale of

The Securities and Exchange Commission (SEC) requires companies to file certain information electronically so that it can be posted on the SEC's EDGAR database.

HVAC Heating & Air Conditioning, Inc., is a public company whose shares are traded in the public securities markets. Under the Sarbanes-Oxley Act of 2002, to ensure that HVAC's financial results are accurate and timely, the firm's senior officers must set up and maintain

For civil sanctions to be imposed under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, the violator must not have had an intent to defraud or knowledge of his or her misconduct.

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

Corporate accountability can be increased by imposing strict disclosure requirements and harsh penalties for securities laws.

Global Trade Corporation is a public company that is poised to issue securities that do not qualify for an exemption from registration. This means that Global Trade must

Most securities can be resold without registration.

Every state has it own corporate securities laws that regulate the offer and sale of securities within tis borders.

Rollo is the chief executive officer of Specialty Magazines, Inc., which is required to file certain financial reports with the Securities and Exchange Commission (SEC) . Under the Sarbanes-Oxley Act of 2002, Rollo must

Securities generally do not include any documents evidencing corporate ownership or debt.

Securities offerings in unlimited amounts can be exempt from the registration requirements in certain circumstances.

Cotton Products Corporation is a public company whose shares are traded in the public securities markets. With respect to financial and other significant information concerning its securities, the Securities Act of 1933

Boats & Yachts Corporation is a public company, which California regulates and in which Dorian invests. The Sarbanes-Oxley Act of 2002 introduced direct federal corporate governance requirements to

To raise capital to form Business Apps Corporation with Cris, Dona sells bonds and stock in other companies, and plans to register an initial public of?fer?ing under the Securities Act of 1933. SEC Rule l0b-5 covers

Corporate "outsiders" may not be held liable for insider trading under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5.