Business Law, 8e: Chapter 36

Chapter 36
Securities Regulation:

Your Full Name:

Your Email Address:

The Email address of an instructor to mail your quiz results:

1. The SEC v. SG LTD case involve the question of whether shares in a "virtual corporation" were securities.: a. True
b. False

3. SEC Regulation C allows for the sale of certain types of private offerings without full registration.: a. True
b. False

4. A "tippee," cannot be liable for any profit made since he is too far removed from the corporation.: a. True
b. False

5. Sarbanes-Oxley Act requires that the chairman of the board of directors of a publicly traded company must certify the financial statements.: a. True
b. False

6. Any stock offering is considered to be an IPO (initial public offering).: a. True
b. False

7. To establish a Rule 10b-5 violation of the 1934 Act, the plaintiff must establish negligence.: a. True
b. False

8. Zapit2U, Inc. stock is not registered under the 1934 Act. I-Star willfully and knowingly failed to disclose merger negotiations. I-Star may be held liable under §10(b) even though its securities are not registered.: a. True
b. False

9. Corporations registered under the Securities Exchange Act of 1934 must file periodic reports with the SEC.: a. True
b. False

10. Sarbanes-Oxley Act now requires corporate attorneys for public companies to report material violations of securities laws to the SEC.: a. True
b. False

11. Federal regulation of the sale of securities is based on the:: a. Securities Act of 1933 and the Securities Exchange Act of 1934.
b. Securities Act of 1933 and the Federal Trade Act of 1936.
c. Federal Trade Act of 1936 and the Blue Sky Act of 1933.
d. Fair Stock Act of 1932 and the Investment Securities Act of 1934.

12. Which of the following would be most likely to be classified as a security?: a. A prepaid investment in gold coins.
b. An investment in a general partnership.
c. Undivided interests in oil, gas or other mineral rights.
d. A pension plan in which only the employer makes contributions.

13. Julio, the president of Congestion, Inc., is playing golf with his brother, Luciano. He tells Luciano that Congestion, Inc., is about to be purchased by a larger corporation named Bronchitis, Inc. Luciano, at a dinner later that day, tells Enrico, his best friend, about what Julio told him. Luciano and Enrico make a deal to share any profits that Enrico makes in trading in Congestion stock. Assume that Julio, Luciano, and Enrico all purchase Congestion stock before the merger is announced, and all sell the stock (at a very large profit) after the merger is announced. Which, if any, of these three are potentially guilty of illegal insider trading?: a. Julio only.
b. Julio and Luciano.
c. Julio and Enrico.
d. All three are guilty.

14. The Foreign Corrupt Practices Act's accounting standards apply:: a. to all U.S. business operating outside the United States.
b. only to securities issuers subject to SEC jurisdiction.
c. foreign businesses operating within the United States.
d. foreign governments.

15. Robert owned an apple orchard in California and offered to sell small plots to he general public. The plots were 10 feet long by 10 feet wide. In addition to the land, Robert offered a contract to harvest and sell the apples. Is Robert offering a Security?: a. Robert is offering a security - an investment contract.
b. Robert is not offering a security because he is selling land.
c. Robert is not offering security because the sales are limited to California.
d. Robert is not offering a security because it is a small offering.