Question 1

A registration statement becomes public immediately on filing with the SEC, but a prospectus only becomes public upon signature of the chief financial officer.

Accepted Answer

A registration statement becomes public upon approval by the SEC, which can take some time after filing. A prospectus also becomes public upon filing with the SEC, not only upon signature of the CFO.

Question 2

The effective date of a registration statement is the thirtieth day after filing, after which investors can access it using
EDMOND.

Accepted Answer

The effective date of a registration statement is not necessarily the thirtieth day after filing, as it depends on SEC review and approval. Additionally, investors cannot access a registration statement using EDMOND, as EDMOND is an internal SEC system for reviewing and processing filings. Investors typically access registration statements through publicly available databases like EDGAR.

Question 3

In an election of directors, solicitations of proxies by a person other than the issuer must include an annual report with a written proxy statement.

Accepted Answer

According to SEC Rule 14a-3, proxy solicitations by persons other than the issuer (such as activist shareholders) must include a written proxy statement and a copy of the issuer's most recent annual report to shareholders.

Question 4

Under SEC requirements adopted in 2010, disclosure of any directorships held by each director and nominee at any time during the past seven years at any public company or registered investment company must be made to shareholders.

Accepted Answer

The answer of Under SEC requirements adopted in 2010, disclosure...

Question 5

Under Regulation A, as amended in 1992, an issuer may make offers upon filing the offering statement but may make sales only after the SEC has qualified the statement.

Accepted Answer

Under Regulation A, as amended in 1992, an issuer may make offers upon filing the offering statement but may make sales only after the SEC has qualified the statement.

Question 6

The SEC has adopted rules requiring an issuer's chief executive and chief financial officers to certify the financial and other information contained in the issuer's annual and quarterly reports.

Accepted Answer

The SEC has indeed adopted rules requiring certification of financial and other information by an issuer's CEO and CFO in annual and quarterly reports.

Question 7

In 1992, the SEC issued new rules tightening the registration and reporting system for small business issuers, which increase the cost for such issuers wishing to trade their securities publicly.

Accepted Answer

The answer of In 1992, the SEC issued new rules...

Question 8

The Foreign Corrupt Practices Act makes it illegal for an American company to pay money to a foreign official to influence a decision of that person in his official capacity.

Accepted Answer

The statement is true. The Foreign Corrupt Practices Act (FCPA) is a federal law in the United States that prohibits U.S. individuals and businesses from bribing foreign officials to obtain or retain business. The act applies to companies that are listed on U.S. stock exchanges or that conduct business within the United States.

Question 9

Shelf registrations allow issuers to respond more quickly to market conditions, but the provision allowing it does not apply to all companies.

Accepted Answer

This statement is true. Shelf registrations allow issuers to have a pre-approved registration statement on file with the SEC, which can be used to quickly issue securities when market conditions are favorable. However, not all companies are eligible for shelf registrations.

Question 10

In 2006, the SEC abolished the requirement that a registration statement disclose compensation paid to senior executives and directors.

Accepted Answer

The SEC did not abolish the requirement to disclose compensation paid to senior executives and directors in 2006. However, in 2018, the SEC did adopt amendments to the disclosure requirements for executive compensation and related party transactions.

Question 11

In 2009, Congress enacted the Investor Protection and Securities Reform Act, which imposes new corporate governance and investor protection rules on privately and publicly held companies.

Accepted Answer

There is no such law as "Investor Protection and Securities Reform Act" enacted by Congress in 2009. However, there are other laws such as the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the JOBS Act of 2012 that contain provisions related to corporate governance and investor protection.

Question 12

Under Regulation A, as amended in 1992, issuers may use a simple question-and-answer disclosure document.

Accepted Answer

Under Regulation A, as amended in 1992, issuers may use a simplified disclosure document known as Form 1-A, which includes a question-and-answer format for disclosure.

Question 13

Bonds are not included in the definition of the term "security."

Accepted Answer

Bonds are included in the definition of the term "security," as they are debt securities that provide income to the bondholder.

Question 14

The definition of "insider" is consistent between Rule 10b-5 and Section 16(b) of the 1934 Act.

Accepted Answer

The answer of The definition of "insider" is consistent between...

Question 15

All fifty states have enacted similar statutes regulating tender offers.

Accepted Answer

The answer of All fifty states have enacted similar statutes...

Question 16

The profits realized for violation of Rule 16(b) are given directly to the shareholders as a penalty to the corporation.

Accepted Answer

The profits realized from a violation of Rule 16(b) are disgorged and must be paid to the corporation itself, not directly to the shareholders. Rule 16(b) under the Securities Exchange Act of 1934 is designed to prevent insiders from profiting from short-swing transactions based on access to non-public information.

Question 17

The SEC may not advance the effective date of a registration statement.

Accepted Answer

The SEC can accelerate the effective date of a registration statement upon request by the issuer, allowing the securities to be sold sooner than they would be under the standard review timeline.

Question 18

The Foreign Corrupt Practices Act makes it illegal to offer a payment of money to a foreign official to influence a decision even if the payment is not made.

Accepted Answer

The Foreign Corrupt Practices Act prohibits both the offer and the actual payment of money to foreign officials in order to influence a decision.

Question 19

The Securities Enforcement Remedies and Penny Stock Reform Act of 1990 gives the SEC power to issue cease and desist orders and to impose criminal fines up to $1 million.

Accepted Answer

The Securities Enforcement Remedies and Penny Stock Reform Act of 1990 does give the SEC the power to issue cease and desist orders, but it does not grant the SEC the authority to impose criminal fines. Criminal fines are typically pursued by the Department of Justice, not the SEC. The SEC can, however, impose civil penalties.

Question 20

There are rigorously enforced restrictions regarding both number and qualification of investors who purchase securities under Regulation A.

Accepted Answer

Regulation A allows companies to offer and sell securities to the public with less stringent regulatory requirements and without a limit on the number of "unaccredited" investors, unlike other exemptions that have strict investor qualifications and caps.

Quiz 43: Securities Regulation

A registration statement becomes public immediately on filing with the SEC, but a prospectus only becomes public upon signature of the chief financial officer.

The effective date of a registration statement is the thirtieth day after filing, after which investors can access it using EDMOND.

In an election of directors, solicitations of proxies by a person other than the issuer must include an annual report with a written proxy statement.

Under SEC requirements adopted in 2010, disclosure of any directorships held by each director and nominee at any time during the past seven years at any public company or registered investment company must be made to shareholders.

Under Regulation A, as amended in 1992, an issuer may make offers upon filing the offering statement but may make sales only after the SEC has qualified the statement.

The SEC has adopted rules requiring an issuer's chief executive and chief financial officers to certify the financial and other information contained in the issuer's annual and quarterly reports.

In 1992, the SEC issued new rules tightening the registration and reporting system for small business issuers, which increase the cost for such issuers wishing to trade their securities publicly.

The Foreign Corrupt Practices Act makes it illegal for an American company to pay money to a foreign official to influence a decision of that person in his official capacity.

Shelf registrations allow issuers to respond more quickly to market conditions, but the provision allowing it does not apply to all companies.

In 2006, the SEC abolished the requirement that a registration statement disclose compensation paid to senior executives and directors.

In 2009, Congress enacted the Investor Protection and Securities Reform Act, which imposes new corporate governance and investor protection rules on privately and publicly held companies.

Under Regulation A, as amended in 1992, issuers may use a simple question-and-answer disclosure document.

Bonds are not included in the definition of the term "security."

The definition of "insider" is consistent between Rule 10b-5 and Section 16(b) of the 1934 Act.

All fifty states have enacted similar statutes regulating tender offers.

The profits realized for violation of Rule 16(b) are given directly to the shareholders as a penalty to the corporation.

The SEC may not advance the effective date of a registration statement.

The Foreign Corrupt Practices Act makes it illegal to offer a payment of money to a foreign official to influence a decision even if the payment is not made.

The Securities Enforcement Remedies and Penny Stock Reform Act of 1990 gives the SEC power to issue cease and desist orders and to impose criminal fines up to $1 million.

There are rigorously enforced restrictions regarding both number and qualification of investors who purchase securities under Regulation A.