Financial And Securities Regulations

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Question 1

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Securities laws are designed to protect the buying public by requiring accurate information so that they can make intelligent investment decisions based on factual information.

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Question 2

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The Securities and Exchange Commission has both quasi-legislative and quasi-judicial powers.

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Question 3

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The Securities Act of 1933 is a disclosure law with respect to the initial sale of securities to the public.

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Question 4

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Contracts to buy and sell securities are finalized during the posteffective period.

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Question 5

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The prospectus provides expert analysis of a particular security's expectations of future worth.

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Question 6

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The law prohibits the sale of worthless securities.

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Question 7

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It is legal to sell a covered security during the prefiling period.

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Question 8

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Fraud occurs when any material fact is omitted from a prospectus causing a statement to be misleading.

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Question 9

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Liability traditionally has been imposed against violators even though they lacked any wrongful intent.

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Question 10

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Plaintiffs can recover for harm done by false or misleading information in a prospectus even if the prospectus was not read or reviewed.

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Question 11

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Sarbanes-Oxley has increased the statute of limitations for various infringements of both the 1933 Act and the 1934 Act.

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Question 12

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The burden of proof when alleging a due diligence defense is on the expert.

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Question 13

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Under the 1933 Act, the statute of limitations begins to run the moment the untrue statement or communication containing an omission is made public.

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Question 14

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The Securities Exchange Act makes it illegal to sell a security on a national exchange unless a registration is effective for the security.

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Question 15

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A plaintiff in a Rule 10b-5 suit is not required to prove damages in order to prevail.

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Question 16

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A defrauding seller usually benefits from an increase in the value of the securities.

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Question 17

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Proof of negligence leading to corporate mismanagement is not enough to prove a case of seller's fraud under Rule 10b-5.

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Question 18

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A person cannot be considered an insider unless he/she owns at least 51 percent of a security.

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Question 19

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The SEC applies the misappropriation theory of insider trading to force executives who file or certify incorrect financial statements to return bonuses and additional compensation received.

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Question 20

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A tipster is a person who learns of nonpublic information from an insider.

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