Deck 40: Corporate Governance and Securities Law

Question 1

The result in United States v.Bhagat indicates that an employee who wants to buy or sell stock in his or her employer's firm on the basis of not-yet-public information should

A)act a reasonable time after the information is made public.
B)act quickly before the information is made public.
C)ask a third party to act on the employee's behalf.
D)never act on the information.

Answer 1

A

Question 2

In the facts of the previous question,under the dissent's reasoning in United States v.Bhagat,the "office abuzz" reference is

A)proper to amend Elron's indictment.
B)proper to impeach Elron's testimony.
C)proper to provide a jury with a basis to infer what Elron knew.
D)not proper.

Answer 2

D

Question 3

Dazzlin Discoveries,Inc. ,sends its employees,including Elron,an e-mail to disclose certain positive company information that is not yet revealed to the public.Elron buys Dazzlin stock and sells it ten business days later-after the e-mail information is publicly disclosed-for a profit.Elron is charged with trading illegally on inside information.During his trial,Elron denies that he read the e-mail before buying the stock.The prosecutor asserts that the Dazzlin office was "abuzz" with the information,but this was not noted in the indictment.Based on the decision in United States v.Bhagat,the "office abuzz" reference is

A)proper to amend Elron's indictment.
B)proper to impeach Elron's testimony.
C)proper to provide a jury with a basis to infer what Elron knew.
D)not proper.

Answer 3

B

Question 4

Kipling Metals Corporation is publicly held.Under the Securities and Exchange Commission's "notice and access" model rules,Kipling's dissemination of proxy materials to its shareholders by posting them on a Web site is

A)allowed in any circumstance but not required.
B)allowed only if warranted.
C)not allowed.
D)required.

Question 5

Excel Corporation is publicly held.Under the Securities and Exchange Commission's Regulation Fair Disclosure,the dissemination of material nonpublic information about Excel solely through Excel's Web site is

A)allowed in any circumstance but not required.
B)allowed only if warranted.
C)not allowed.
D)required.