TJ_Comp 20_TB_Ch46

TJ_Comp 20_TB_Ch46 - Chapter 46SECURITIES REGULATION...

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Chapter 46—SECURITIES REGULATION TRUE/FALSE 1. State blue-sky laws are subject to the very important limitation that they can apply only to intrastate transactions and cannot apply to sales made in interstate commerce. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 2. The Securities Act of 1933 deals with the original distribution of securities by the issuing corporations. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 3. Under the 1990 Remedies Act, the SEC may start administrative proceedings against any person or en- tity whether regulated by the SEC or not. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 4. The Securities Exchange Act of 1934 is concerned with the secondary distribution of securities in the national securities markets and in the over-the-counter markets. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 5. The Market Reform Act of 1990 empowers the SEC to suspend all trading when markets are excess- ively volatile. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 6. Securities covered by the securities acts include not only investment instruments such as stocks and bonds but also "investment contracts." ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 7. The definition of "security" is very broad and included in the definition are investment contracts. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 8. The Securities Act of 1933 prohibits the offering or sale of securities to the public in interstate com- merce before a registration statement has been filed with the Securities and Exchange Commission (SEC). ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 9. The Securities Act of 1933 requires a seller to provide a prospectus to each potential purchaser of se- curities. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 10. From the date of a company's filing a registration statement with the SEC to the date the registration becomes effective, at least 20 days must elapse. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic
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11. Once a registration statement has been filed, there is at least one 20-day waiting period before securit- ies can be sold to allow the public time to study the filed information. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 12. No private or limited offerings of securities are exempt from the SEC registration requirements. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 13. Securities acquired under a Regulation-D exemption from registration are considered restricted securit- ies, and their resale may require registration. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 14. Under SEC Regulation D, offerings in unlimited amount can be made solely to accredited investors and can be exempt from the registration process. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 15. Under Regulation D, Rule 504, there are strict restrictions on the number of investors and the methods of soliciting those investors. ANS: F
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TJ_Comp 20_TB_Ch46 - Chapter 46SECURITIES REGULATION...

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