Mann_BLRB 9_TB_Ch40

Business Law and the Regulation of Business

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Chapter 40—Securities Regulation TRUE/FALSE 1. The Securities and Exchange Commission is an independent, judicial agency which administers state and federal securities laws. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 2. The 1933 Securities Act differs from the 1934 Act in that the former deals with issuing stock and the latter has to do with trading stock that has already been issued. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 3. The Private Securities Litigation Reform Act sought to prevent abuses in private securities fraud law- suits. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 4. The Securities Act of 1933 regulates tender offers and proxy solicitations. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 5. Most states require the registration of securities and regulate brokers and dealers. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 6. Registration of securities with the SEC guarantees to a potential investor the financial soundness of the business represented by the stock. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 7. Every registration filed with the SEC is held in confidence until the business permits disclosure. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 8. "Shelf registrations" have to do with delayed sales of stock. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 9. "Restricted securities" are exempted from registration. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 10. A "private placement" involves no public offering and is exempt from registration. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 11. In 1996, Congress enacted the National Securities Markets Improvements Act which established the EDGAR system. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic
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12. The Securities Act of 1933 is also called the "Truth in Securities Act." ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 13. The Sarbanes-Oxley Act requires either the chief executive officer or the chief financial officer of a company issuing securities to certify information in the issuer’s annual and quarterly reports. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 14. The antifraud provisions of the 1933 Act pertain to both unregistered and registered securities. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 15. Only civil liability may be imposed for violations of the Securities Act of 1933. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 16. In 1992, the SEC issued new rules establishing an integrated registration and reporting system for small business issuers. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 17. The Securities Exchange Act of 1934 primarily deals with secondary transactions in stock. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 18. The 1934 Act applies to all stock traded on a national exchange, no matter how small or large the com- pany which issued the stock. ANS: T
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Mann_BLRB 9_TB_Ch40 - Chapter 40-Securities Regulation...

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