FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 7: Securities Law and Corporate Governance

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 1

True/False

Review LaterAdd Note

Review Later

Most private, small-business, noninvestment company offers of securities are exempt from the registration requirements.

A) True
B) False

Correct Answer

verified

Show Answer

Question 2

Multiple Choice

Review LaterAdd Note

Review Later

Fact Pattern 7-1 College Bound, Inc., markets test and study prep materials and courses. College Bound wants to make an initial public offering of securities. The firm believes that it qualifies for an exemption under Regulation A from the full registration requirement of the Securities Act of 1933. -Refer to Fact Pattern 7-1. If College Bound is exempt from the federal registration requirement, the firm is​

A) ​automatically exempt from any state registration requirement.
B) ​not subject to any state securities laws.
C) ​not necessarily exempt under a state registration requirement.
D) ​automatically subject to all state registration requirements.

E) B) and D)
F) All of the above

Correct Answer

verified

Show Answer

Question 3

True/False

Review LaterAdd Note

The key to liability under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 is whether information omitted or misrepresented in connection with the purchase or sale of a security is material.

The Sarbanes-Oxley Act of 2002 attempts to increase corporate accountability by imposing strict disclosure requirements and harsh penalties for securities laws.

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

Most private, midsize-business, noninvestment company offers of securities are exempt from the registration requirements.

Ridley is an officer of Sun Watts, Inc. Ridley knows that a Sun Watts engineer recently developed a new, inexpensive method for collecting, storing, and converting solar power into fuel. Ridley takes advantage of this information to buy Sun Watts stock from Taylor and, after the discovery is announced, to sell the stock to Ulrich at a profit. Taylor claims that this is a violation of federal law. Is Taylor correct? If so, what federal law has Ridley violated, and what are its possible penalties?​

State corporation statues set up the legal framework for corporate governance.

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​

The Securities and Exchange Commission has implemented no new regulations since the Securities Exchange Act.

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

Fleet Delivery Corporation is a public company with a market capitalization of less than $75 million. Fleet is poised to issue securities in a transaction that, under the Securities Act of 1933, is "exempt." This enables Fleet to​

To raise $120 million to expand operations, Primo Content Inc. makes a stock offering directly to sixty accredited investors and twenty sophisticated, but unaccredited investors. The firm plans to notify the SEC of sales. Under the Securities Act of 1933, this issue may qualify as an "exempt" transaction​

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

Under the Sarbanes-Oxley Act of 2002, chief financial officers must certify the accuracy of information in corporate financial statements.

Household Products Corporation wants to make an offering of securities to the public. The offering is not exempt from registration under the Securities Act of 1933. Before the firm sells its securities, it must provide investors with​

Under the Sarbanes-Oxley Act of 2002, all members of a publicly traded corporation's audit committee must be outside directors.

Fact Pattern 7-3 Dan, an accountant for Eureka! Inc. learns of undisclosed company plans to market a new laptop. Dan buys 1,000 shares of the firm's stock. He reveals the company plans to Fay, who tells Greg. Both Fay and Greg buy 100 shares. Greg knows that Fay got her information from Dan. When Eureka! publicly announces its new laptop, Dan, Fay, and Greg sell their stock for a profit. -Refer to Fact Pattern 7-3. Under the Securities Exchange Act of 1934, Fay is most likely​

The sale and transfer of securities are heavily regulated by federal and state statutes and by government agencies.

The definition of security in the Securities Act of 1933 includes interests that involve the right to buy a security on a national security exchange.