Question 1

Which of the following permits the SEC to seek punishment of violators of foreign securities laws?

Accepted Answer

A)   The Sarbanes-Oxley Act of 2002
B)   The Securities Acts Amendments of 1990
C)   The Market Reform Act of 1990
D)   The Securities Enforcement Remedies and Penny Stock Reform Act of 1990
E)   The National Securities Markets Improvement Act of 1996F) A) and B)
G) A) and C)

Question 2

Which of the following is true regarding Bruno's sale of securities before the effective date of registration?

Accepted Answer

A)   He will be able to avoid liability if he can establish the due diligence defense.
B)   He will be able to avoid liability if he can establish that the investors who purchased stock early were aware that the securities were sold before the effective date of registration.
C)   He will be able to avoid liability if he can establish that the sales before the effective date did not directly result in any losses to investors.
D)   That is not a violation of the securities laws.
E)   He will almost certainly be liable because the 1933 act provides no defenses for that violation.F) None of the above
G) B) and D)

Question 3

Which of the following is true regarding examples of securities?

Accepted Answer

A)   Debentures, warrants, bonds, and stocks are all securities.
B)   Warrants and stocks are securities, but debentures and bonds are not.
C)   Stocks, warrants, and bonds are securities, but debentures are not.
D)   Stocks, warrants, and debentures are securities, but bonds are not.
E)   Stocks and bonds are securities, but debentures and warrants are not.F) A) and D)
G) A) and C)

Question 4

Under the Securities Exchange Act of 1934,executive officers are not considered statutory insiders.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following refer to state securities laws?

Accepted Answer

A)   Pink-sky laws
B)   Blue-sky laws
C)   Orange-sky laws
D)   Brown-ground laws
E)   Green-grass lawsF) B) and E)
G) A) and E)

Question 6

The SEC issues opinions regarding the worth of securities.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following created the Public Company Accounting Oversight Board to regulate public accounting firms?

Accepted Answer

A)   The Sarbanes-Oxley Act of 2002
B)   The Securities Acts Amendments of 1990
C)   The Market Reform Act of 1990
D)   The Securities Enforcement Remedies and Penny Stock Reform Act of 1990
E)   The National Securities Markets Improvement Act of 1996F) B) and C)
G) C) and D)

Question 8

Which of the following is not considered an accredited investor?

Accepted Answer

A)   Any natural person whose annual income has been at least $200,000 for the two previous years and expects to make at least $200,000 in the current year.
B)   Any corporation or partnership with total assets in excess of $5 million.
C)   Insiders of the issuers, such as executive officers or directors.
D)   Colleges and universities.
E)   Any natural person who has a net worth of at least $500,000.F) A) and B)
G) A) and E)

Question 9

Which of the following is true regarding who may be considered an insider under the Securities Exchange Act of 1934?

Accepted Answer

A)   Only directors are considered insiders
B)   Only employees are considered insiders
C)   Any shareholder is considered an insider along with all directors and all employees
D)   Directors, officers, and anyone who receives private information regarding the trading of securities may be considered insiders
E)   Only directors, officers, and majority shareholders are considered insidersF) D) and E)
G) A) and C)

Question 10

Which of the following is not an example of material information under Section 10(b) and Rule 10(b) -5?

Accepted Answer

A)   A change in the status of litigation against the company.
B)   A change in dividends.
C)   A new product, process, or discovery.
D)   Any change in the financial status of the company.
E)   A contract for the sale of corporate assets or for the purchase of assets.F) A) and E)
G) C) and D)

Question 11

For which of the following is George liable?

Accepted Answer

A)   His own profits and also the profits of Frank.
B)   His own profits and also the profits of both Frank and Linda.
C)   His own profits regardless of whether he knew he was trading in information that had not been made public.
D)   Only his own profits and those of Linda.
E)   Only his own profits and then only if it can be shown that he knew or should have known that the material information was not public.F) B) and E)
G) A) and B)

Question 12

A[n] ______ prospectus is a prospectus with a warning written in red print at the top of the page warning investors that the registration has been filed with the SEC but has not yet been approved.

Accepted Answer

A)   Red-line
B)   Red-herring
C)   Red-fish
D)   Bait
E)   AdvertisingF) A) and B)
G) D) and E)

Question 13

Which of the following is a person who controls,is controlled by,or is in common control with the issuer?

Accepted Answer

A)   An affiliate
B)   An associate
C)   A partner
D)   A holder
E)   A tipperF) A) and E)
G) All of the above

Question 14

What is a proxy solicitation and how is it regulated by the SEC?

Accepted Answer

The process of obtaining authority to vo...

Question 15

Alice,a certified public accountant (CPA) made mistakes in auditing the financial statements of ABC Company,a publicly traded corporation.Although Alice later became aware of the mistake and knew ABC was soliciting investors,she kept quiet about it,and ABC proceeded to sell stock without revealing the error.After ABC went bankrupt,investors sued Alice alleging that she had primary liability under federal securities law.Which of the following is the most likely result assuming the court follows the reasoning of David Overton and Jerome I.Kransdorf v.Todman & Co.,CPAs,P.C.and Trien,Rosenberg,Rosenberg,Weinberg,Ciullo & Fazzari,the case in the text involving a similar situation?

Accepted Answer

A)   That while Alice had a duty to correct her opinion, she could not be held primarily liable under federal securities law.
B)   That Alice had no duty to correct her opinion in regard to investors because her contract was only with ABC Company, and the investors had no right to rely upon it.
C)   That Alice had a duty to correct her opinion and that she could be held primarily liable under federal securities law.
D)   That Alice had no duty to correct her opinion unless the facts establish that one or more investors specifically asked her about the results of the audit in which event she could be held primarily liable under federal securities law if she failed to disclose the mistake.
E)   That Alice had a duty to correct her opinion only if the mistake resulted from gross negligence on her part in which event she would also have a duty to disclose the mistake to any potential investors.F) C) and E)
G) A) and E)

Question 16

Which of the following references stock and bonds issued by corporations to raise capital for corporate expansion?

Accepted Answer

A)   Acknowledgements
B)   Securities
C)   Stock and bond options
D)   Investment options
E)   Funding agreementsF) D) and E)
G) All of the above

Question 17

The Securities and Exchange Commission is headed by how many individuals?

Accepted Answer

A)   50
B)   25
C)   20
D)   10
E)   5F) C) and D)
G) B) and E)

Question 18

Which of the following allows the SEC to suspend securities trading if prices vary excessively in a short time period?

Accepted Answer

A)   The Sarbanes-Oxley Act of 2002
B)   The Securities Acts Amendments of 1990
C)   The Market Reform Act of 1990
D)   The Securities Enforcement Remedies and Penny Stock Reform Act of 1990
E)   The National Securities Markets Improvement Act of 1996F) A) and D)
G) C) and D)

Question 19

Which of the following is the period beginning when an issuer begins to think about issuing securities and ends when the issuer files the registration statement and prospectus with the SEC?

Accepted Answer

A)   The initial filing period
B)   The beginning filing period
C)   The prefiling period
D)   The required filing period
E)   The waiting periodF) C) and D)
G) A) and B)

Question 20

In which of the following prohibited practices,if any,was Linda engaged by purchasing the shares after she found out about the merger?

Accepted Answer

A)   Insider trading
B)   Outlaw trading
C)   Presidential trading
D)   Officer profiting
E)   She did not engage in any prohibited practices because as president, she had the legal right to profit from the upcoming sale.F) B) and D)
G) A) and B)

Exam 41: Corporations: Securities and Investor Protection

Which of the following is not an example of material information under Section 10(b) and Rule 10(b) -5?

Correct Answer
verified

Which of the following is not considered an accredited investor?

Correct Answer
verified

Which of the following permits the SEC to seek punishment of violators of foreign securities laws?

Correct Answer
verified

Which of the following is a person who controls,is controlled by,or is in common control with the issuer?

Correct Answer
verified

For which of the following is George liable?

Correct Answer
verified

Which of the following allows the SEC to suspend securities trading if prices vary excessively in a short time period?

Correct Answer
verified

In which of the following prohibited practices,if any,was Linda engaged by purchasing the shares after she found out about the merger?

Correct Answer
verified

Correct Answer
verified

The SEC issues opinions regarding the worth of securities.

Correct Answer
verified

What is a proxy solicitation and how is it regulated by the SEC?

Correct Answer
verified
The process of obtaining authority to vo...
View Answer

Under the Securities Exchange Act of 1934,executive officers are not considered statutory insiders.

Correct Answer
verified

Which of the following is true regarding Bruno's sale of securities before the effective date of registration?

Correct Answer
verified

Which of the following created the Public Company Accounting Oversight Board to regulate public accounting firms?

Correct Answer
verified

Which of the following references stock and bonds issued by corporations to raise capital for corporate expansion?

Correct Answer
verified

Which of the following refer to state securities laws?

Correct Answer
verified

Which of the following is true regarding who may be considered an insider under the Securities Exchange Act of 1934?

Correct Answer
verified

Which of the following is the period beginning when an issuer begins to think about issuing securities and ends when the issuer files the registration statement and prospectus with the SEC?

Correct Answer
verified

A[n] ______ prospectus is a prospectus with a warning written in red print at the top of the page warning investors that the registration has been filed with the SEC but has not yet been approved.

Correct Answer
verified

Which of the following is true regarding examples of securities?

Correct Answer
verified

The Securities and Exchange Commission is headed by how many individuals?

Correct Answer
verified

Exam 41: Corporations: Securities and Investor Protection

Which of the following is not an example of material information under Section 10(b) and Rule 10(b) -5?

Correct AnswerverifiedShow Answer

Which of the following is not considered an accredited investor?

Correct AnswerverifiedShow Answer

Which of the following permits the SEC to seek punishment of violators of foreign securities laws?

Correct AnswerverifiedShow Answer

Which of the following is a person who controls,is controlled by,or is in common control with the issuer?

Correct AnswerverifiedShow Answer

For which of the following is George liable?

Correct AnswerverifiedShow Answer

Which of the following allows the SEC to suspend securities trading if prices vary excessively in a short time period?

Correct AnswerverifiedShow Answer

In which of the following prohibited practices,if any,was Linda engaged by purchasing the shares after she found out about the merger?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The SEC issues opinions regarding the worth of securities.

Correct AnswerverifiedShow Answer

What is a proxy solicitation and how is it regulated by the SEC?

Correct AnswerverifiedThe process of obtaining authority to vo...View AnswerShow Answer

Under the Securities Exchange Act of 1934,executive officers are not considered statutory insiders.

Correct AnswerverifiedShow Answer

Which of the following is true regarding Bruno's sale of securities before the effective date of registration?

Correct AnswerverifiedShow Answer

Which of the following created the Public Company Accounting Oversight Board to regulate public accounting firms?

Correct AnswerverifiedShow Answer

Which of the following references stock and bonds issued by corporations to raise capital for corporate expansion?

Correct AnswerverifiedShow Answer

Which of the following refer to state securities laws?

Correct AnswerverifiedShow Answer

Which of the following is true regarding who may be considered an insider under the Securities Exchange Act of 1934?

Correct AnswerverifiedShow Answer

Which of the following is the period beginning when an issuer begins to think about issuing securities and ends when the issuer files the registration statement and prospectus with the SEC?

Correct AnswerverifiedShow Answer

A[n] ______ prospectus is a prospectus with a warning written in red print at the top of the page warning investors that the registration has been filed with the SEC but has not yet been approved.

Correct AnswerverifiedShow Answer

Which of the following is true regarding examples of securities?

Correct AnswerverifiedShow Answer

The Securities and Exchange Commission is headed by how many individuals?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The process of obtaining authority to vo...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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