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BUL 3330 Unit 11 Quiz
Terms in this set (24)
T/F: The Securities Act of 1933 is known as the "Truth in Securities" law.
T/F: The Securities Exchange Act of 1934 applies to corporations whose equity securities are traded over the counter if the company has at least $10 million in assets and 500 or more shareholders.
T/F: The Securities Exchange Act of 1934 does not require disclosures when control of a company is being sought through a tender offer.
T/F: Under the Securities Act of 1933, the SEC has the power to issue a stop order to halt trading in the stock, even after the securities have gone on sale.
T/F: The SEC's fundamental mission is to assure adequate disclosures in connection with the extension of consumer credit.
T/F: The Securities Act of 1933 authorized the establishment of the Securities and Exchange Commission.
T/F: The Securities Exchange Act of 1934 is known as the "Truth in Securities Law."
T/F: The Securities Act of 1933 does not apply to unincorporated entities.
T/F: If a company engages in exclusively intrastate business, the federal securities laws will not apply.
For the purposes of defining a security, the U.S. Supreme Court has stated the following: "The test is whether the scheme involves an investment of money in a common enterprise with profits to come solely from the efforts of others." In connection with the definition of a security, which of the following is true?
The fact that investors are required to exert some efforts if a return is to be achieved does not automatically preclude a finding that a scheme is a security.
The Securities Act of 1933
Is limited to new securities issues
On February 15, Donald, a director of the Mickey Mouse Corporation, purchases 1,000 shares of Mickey Mouse for $50 a share. On June 1, Donald sells the shares for $60 a share. What result?
Donald must pay back the $10,000 profit even if he had no inside information.
The U.S. Supreme Court has refined Rule 10b-5 in the following manner:
Before a tippee has a duty to disclose or abstain from trading, there must be a breach of the insider's fiduciary duty.
Which of the following is false?
The Securities and Exchange Commission (SEC) is composed of ten members.
State securities regulation statutes
Blue Sky Laws
Applies to new securities issues
Securities Act of 1933.
Applies to trading in the secondary market
Securities Exchange Act of 1934
Independent regulatory agency that investigates complaints or violations of law in securities transactions
Securities and Exchange commission
Provides for recapture of short-swing profits made by corporate insiders
Held that proof of scienter is required in private damage actions under Rule 10b-5
Ernst & Ernst v. Hochfelder
Federal law passed in response to bribery of foreign officials by American companies
Foreign Corrupt Practices Act
SEC rule providing that a person who has inside information about a tender offer must either disclose the information or refrain from trading
Prohibits the use of any scheme, device or artifice to defraud in connection with the sale or purchase of any security
Used by courts in insider trading cases to hold noninsiders liable for misappropriating information from employers
THIS SET IS OFTEN IN FOLDERS WITH...
BUL 3330- Unit 2
BUL 3330 Unit 9 Woodyard
BUL3330 Unit 10 Quiz
BUL3330 Unit 8 Quiz
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