Business law chapter 21
Terms in this set (97)
The states did not have federal legislation prior to the time of the federal securities laws
A bond is not considered a security under federal law
A limited partnerships interest is not considered a security
The number of SEC enforcement actions have increased each year since 2005
The intrastate registration exemption requires that 100 percent of the issuers's assets be located in its resident state
An accredited investor includes any corporation
All regulation D offering can be sold through advertising
The SEC conducts a merit review of its filed registration
Section 11 of the 1933 securities act imposes liability for the failure to file a registration statement
Only directors can be held liable for Section 11 violation
Only those who actually signed the registration statement cane liable for a Section 11 violation
All regulation D offerings can be sold through advertising
The SEC conducts a merit review of its filed registrations
Section 11 of the 1933 Securities Act imposes liability for the failure to file a registration statement
Only directors can be held liable for a Section 11 violation
Only those who actually signed the registration statement can be liable for a Section 11 violation
The due diligence defense is one that is easy to establish
A Section 12 violation results from making a material misstatement in a registration statement
The federal securities laws do not apply to proxy solicitation
A merit review standard is the same as the SEC review
Section 10(b) violations carry fines of only $10,000
A limited partnership interest is not considered a security
A false prospectus is covered under Section 11
All companies required to register under the 1934 Act must file a 10-k report
Regulation A filings are exempt from Section 11 liability
A registration approved by the SEC need not be registered at the state level
A tender offer is another form of business combination
A hostile takeover is one supported by management
Asset acquisitions are not subject to any federal regulation
The Williams Act only applies to National Stock Exchange companies
A company filing Williams Act materials is not required to file proxy materials
State laws regulating tender offers are unconstitutional
State antitakeover statutes that delay takeover are unconstitutional
Only a small minority of states have antitakeover statues
An IPO does not require SEC registration
Publicly traded companies can no longer issued non-GAAP financial statements
Short-swing profit rules apply only to officers and directors
Shareholders who solicit proxies need not comply with Section14 of the 1934
The trend in international markets is away from regulating insider trading
Under Sarbanes-Oxley, audit committees of publicly held companies boards need not be made up of independent member so long as the majority of the board is independent
Attorneys who represent publicly traded companies need not report any financial fraud to boards because of attorney-client privilege
With annual revenues topping $500 million, Goldman Sachs now only accepts new investors with a minimum of $1 million to invest
Under Sarbanes-Oxley, audit partners in charge of accounts must be rotated every 10 years
EBITDA is the same as GAAP accounting
A primary offering is an:
Initial offering of securities
Which of the following would not be considered a security under the 1933 Act?
Which of the following is not an exempt security under the 1933 Act?
Which of the following is not required for the intrastate exemption?
Of the issuer's income 100 percent must be earned in its resident state
Regulation A offerings:
Still require registration
Which of the following is not an accredited investor for purposes of Regulation
Any person with income greater than $150,000
Regulation D offerings:
Cannot use advertising
A comment or deficiency letter:
Must be issued within 20 days of the filing of the registration
Which of the following can be done before the registration statement is effective?
Tombstone ads, red herrings
Which of the following is not a Section 12 violation?
False statements in the registration statement
Who is liable for Section 11 violation?
Directors and officers
Which firms would be required to file a 10-k?
Company with 700 shareholders and $6 million assets and listed on a national exchange
Section 10(b) applies only to:
None of the above
All of the above
Trading ____ were meetings of Goldman Sachs analysts and traders to determine short and long investments on particular shares
Who would have standing to bring a civil suit under section 10(b)?
Purchaser of shares
The squinter required for proof of a 10(b) violation is :
Intent to defraud
Section 16 applies to:
An officer of a corporation
The 1934 Act proxy registration requirements:
Include a requirement for shareholders proposals
The 1934 Act proxy regulations apply:
None of the above
Under Section 14, a shareholder proposal in the proxy materials:
Is limited to 200 words
Which of the following is true of a Rule 504 offering?
It is limited to $1 million
A tombstone ad:
Can be run prior to the effective date of the registration
Section 10(b) would apply to which of the following situations?
None of the above
Section 16 applies:
The directors of all covered corporations
Which of the following is not a security for purposes of the 1933 Act?
A promissory not due in six months
The Foreign Corrupt Practices Act:
Is an amendment to the 1934 Act
Which of the following does not have resale restrictions?
In Stoneridge, Charter Communication engaged in which of the following
All of these
Who would be a tipped for purposes of insider trading?
A janitor who gathers information by reading files on corporate counsel's desk
Which of the following exemptions under the 1933 Securities Act does not have limitations on the number of purchasers?
Which of the following is not a defense to false information in the registration statement?
Limited time as a director
What does the Securities Litigation Reform Act's safe harbor provision do?
Provides liability protection for income predictions in the registration statement
Corporation A mergers with Corporation B and becomes Corporation B. The transaction is a:
Bob's Grocery merges with Pete's Produce and becomes PB Foods. The transaction is a:
Williams Act filings are:
Only required of offerors
State laws regulating tender offers are:
None of the above
State anteater statutes:
Generally deal with corporate governance
A hostile tender offer is made:
To the shareholders of the target company
Which of the following actions can the SEC take if there is a violation of Section 14 on proxy solicitation?
The SEC can take any of the above actions
To which of the fooling will be 10b prohibitions on insider trading apply?
All of the above are violations of 10b
Which of the following securities sales must be registered?
A sale of $10,000,000 in shares to 353 US residents
When can a company run a tombstone ad?
After the filing of the registration statement
Who signs the 10-qs and the 10-Ks of publicly trading companies to certify their content?
Which of the following events would be material for purposes of 10b and disclosure?
All of the above
Under the Sarbanes-Oxley, which of the following would be a conflict of interest for the outside auditor of a company?
All of the above
Under Sarbanes-Oxley, how often must the audit partner in charge of an audit client be rotated
Every 5 years
Pump and dump:
Refers to posting stock information on the internet to increase its value before you sell
Under Sarbanes-Oxley, when must a company file an 8-k?
Within one day of any changes listed in the statute
Under Sarbanes-Oxley, who cannot be a member of audit committee of a publicly traded company?
All of the above cannot be a member of the company's audit committee
How long does an officer of a publicly traded company have to file a disclosure of transactions in the company's stock?
The effect of backdating stock options:
Will increase their value to the grantee. Will postpone the booking of the actual costs to the company
Bernie Madoff used a ___ scheme in his fraud schemes
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