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Exam 41: Corporations: Securities and Investor Protection

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Question 41

True/False

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In Sweden,banks oversee the issuance of shares and bonds themselves.

A) True
B) False

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Question 42

Multiple Choice

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What is the term length for the head members of the Securities and Exchange Commission?

A) 3 years
B) 2 years
C) 1 year
D) Eighteen months
E) 5 years

F) B) and D)
G) A) and C)

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Question 43

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[Presidential Profits] Aurelia was president of a publicly traded tractor company,Tough Tractors.Aurelia became aware that stock in her company would likely increase significantly in value because her company had a contract to purchase the assets of Rough Tractors.The boards of both companies wanted the information kept confidential until the purchase was complete and a news release was made.Before the news was made public,Aurelia immediately purchased a significant number of shares in Tough Tractors.Aurelia also told her friend Johan about the contract to purchase assets although she told him to keep it quiet because it had not been made public yet.Nevertheless,unable to keep a secret,Johan told his brother,Charlie.Johan and Charlie purchased a number of shares of stock in Tough Tractors prior to any public announcement of the sale.After the public announcement was made and the purchase of assets went through,Aurelia,Charlie,and Johan all sold their shares in Tough Tractors and made a nice profit. -By purchasing the shares after she found out about the merger,in which of the following prohibited practices,if any,was Aurelia engaged?

Under the Private Securities Litigation Reform Act of 1995,publicly held issuers of publicly held securities cannot be held liable when actual corporate earnings fall short of forecasted earnings as long as ________.

Provide the Howey three-part test for determining if a security exists.

Online advertising and securities transactions are subject to SEC regulations.

is a brief ad that may be published by an issuer during the waiting period.

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

[Vineyard Development] A community group in Montana wanted to revitalize the area and held a meeting urging residents to invest in local businesses.After the meeting,Mai and Trent,who own Valley Vineyard,decide to expand by adding a spa and first-class restaurant to the property to attract tourists.They plan to raise capital for the vineyard development by issuing securities to local investors.All of Valley Vineyard's property and assets are in Montana and their wine sales are about 85% to stores,consumers,or distributors within the state.Once the spa and restaurant are running,they would like to use their profits to open a small wine-bar in Florida. -Are the Valley Vineyard securities exempt from registration with the SEC?

Securities may be sold during the prefiling period.

permit qualified issuers to register securities that they will sell on a delayed or continuous basis in the future.

Which of the following begins when the SEC declares the registration statement effective,and ends when the issuer sells all securities offered or withdraws them from sale?

State securities laws can also be referred to by which of the following terms?

If a company has consistently satisfied registration requirements,do they receive any benefit for future registrations?

Which of the following is false regarding the Mexican Securities Market?

The average investor does not have to register securities when he or she wants to sell.

For which of the following is Aurelia liable?

are stocks and bonds issued by corporations to raise capital for corporate expansion.

Which of the following oversees the purchase and sale of securities?

A person who violates the 1933 Securities Act can be fined but not sent to prison.