Question 1

For purposes of Section 16(b) of the 1934 Securities Exchange Act, which of the following are not "insiders"?

Accepted Answer

Under Section 16(b) of the 1934 Securities Exchange Act, all the listed categories (shareholders owning more than 10 percent, directors, and officers) are considered insiders.

Question 2

If a company has assets of over $10 million but trades its stock over the counter, it is nevertheless required to comply with the 1934 Act if it has:

Accepted Answer

The 1934 Act requires companies with assets over $10 million and a class of equity securities held by 500 or more shareholders to register with the SEC.

Question 3

SEC regulations concerning fraud in securities transactions apply to:

Accepted Answer

SEC regulations concerning fraud apply to all securities transactions involving interstate commerce, not just those registered under the 1933 or 1934 Acts.

Question 4

If Terry makes a tender offer to the owners of Pizza Village's registered stock, he must file a statement with the SEC if he:

Accepted Answer

The answer of If Terry makes a tender offer to...

Question 5

Under the Securities Exchange Act of 1934 and the Williams Act, a tender offer:

Accepted Answer

The Securities Exchange Act of 1934 and the Williams Act require that a tender offer be disclosed to ensure that investors have the necessary information to make an informed decision.

Question 6

Prohibited bribery can result in fines and imprisonment under the antibribery provision of :

Accepted Answer

The Foreign Corrupt Practices Act (FCPA) prohibits bribery of foreign officials and includes provisions for fines and imprisonment for violations.

Question 7

Marge wishes to raise some money to begin mass producing her prize-winning jellies and jams. She offers her neighbors a portion of her profits if they will put up $2,000 each towards her endeavor. Is their investment a "security"?

Accepted Answer

The investment is considered a "security" because it involves an investment of money in a common enterprise with the expectation of profits derived primarily from the efforts of others, which is the definition of a security under the Howey Test.

Question 8

Recovery of damages under Rule 10b-5 requires proof of:

Accepted Answer

Recovery of damages under Rule 10b-5 requires proof of all the elements listed: reliance, materiality, scienter, and connection with the purchase or sale of a security.

Question 9

The antifraud provisions of the 1934 Act would prohibit which of the following?

Accepted Answer

The antifraud provisions of the 1934 Act prohibit making false statements or omissions of material facts in connection with the purchase or sale of securities. Lying about the value of the firm's assets to sell stock is a clear violation.

Question 10

The Securities Act of 1933 has two basic objectives, one of which is to:

Accepted Answer

The answer of The Securities Act of 1933 has two...

Question 11

Solicitation includes any request:

Accepted Answer

Solicitation includes any request for a proxy, not to execute a proxy, or to revoke a proxy.

Question 12

Under the 1934 Act, willful violations may result in:

Accepted Answer

The answer of Under the 1934 Act, willful violations may...

Question 13

Which of the following is a basic objective of the 1933 Securities Act?

Accepted Answer

The 1933 Securities Act aims to ensure transparency in financial statements so investors can make informed decisions and to establish laws against misrepresentation and fraudulent activities in the securities market.

Question 14

A solicitation of proxies from holders of stock:

Accepted Answer

The solicitation of proxies from stockholders is comprehensively regulated by the SEC to ensure transparency and fairness in the voting process.

Question 15

The provisions of Section 17(a) of the 1933 Act:

Accepted Answer

Section 17(a) of the 1933 Act makes it unlawful to obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading.

Question 16

All of the following are exempt from registration under the 1933 Act except:

Accepted Answer

Securities issued by for-profit medical facilities are not exempt from registration under the 1933 Act, unlike government bonds, short-term notes, and state-regulated insurance company annuities.

Question 17

Section 11 of the Securities Act of 1933 imposes liability on:

Accepted Answer

Section 11 of the Securities Act of 1933 imposes liability on all of the parties listed: the issuer, persons who signed the registration statement, directors or partners, and underwriters, for any material misstatements or omissions in the registration statement.

Question 18

Registration under the 1933 Act calls for disclosure of which of the following?

Accepted Answer

The 1933 Act requires comprehensive disclosure, including descriptions of the registrant's properties and business, details about the securities being offered, and compensation of top executives.

Question 19

A signed writing by a shareholder authorizing a named person to vote his stock at a specified meeting of shareholders is a(n):

Accepted Answer

A proxy is a signed writing by a shareholder authorizing a named person to vote his stock at a specified meeting of shareholders.

Question 20

The Securities Enforcement Remedies and Penny Stock Reform Act of 1990 granted the SEC power to:

Accepted Answer

The answer of The Securities Enforcement Remedies and Penny Stock...

Quiz 39: Securities Regulation