Exam 41: Corporations: Securities and Investor Protection

A) Existing laws permit non-Mexican entities to issue securities.
B) Existing laws do not limit investments in securities outside Mexico by Mexican individuals or companies.
C) The Mexican Stock Exchange is a private sector corporation owned and operated by authorized brokerage dealers.
D) The Mexican Stock Exchange requires that dealers complete all transactions on a cash basis and settle them within a 48-hour period.
E) The National Security Commission (CNV) regulates public offerings and securities trading.

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A registration statement filed with the ...

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A) He will be able to do so only if he can establish that the purchasers would have had reasonable grounds to question the registration statement had they reviewed it with due diligence.
B) He will be able to do so only if he can establish that the purchasers would have had reasonable grounds to question the prospectus had they reviewed it with due diligence.
C) He will be able to do so if he can establish that the purchasers would have had reasonable grounds to question either the registration statement or the prospectus had they reviewed them with due diligence.
D) He will not be able to use that defense unless he can establish that he reviewed the registration statement and the prospectus, and had reasonable grounds to believe that the registration statement was accurate with no omission of material facts.
E) He will not be able to rely on that defense because he is an issuer.

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True

A) Robbie was wrong, and there is no such document.
B) A confirmation statement.
C) A registration statement.
D) An acknowledgement statement.
E) A reference statement.

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A) Short-swing profits
B) Short-term profits
C) Insider profits
D) Insider profiting profits
E) Contempt profits

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A) Rick is correct because there are no criminal penalties for violating the 1933 act.
B) Rick is incorrect because the SEC criminally prosecutes some violators although the action would only be a misdemeanor.
C) Rick is correct in that the SEC itself would not send Bruno to jail, but the SEC could recommend criminal action to the Department of Justice resulting in imprisonment for up to five years for a violation.
D) Rick is incorrect because the SEC criminally prosecutes some violators, and a violation of the act is considered a felony.
E) Rick is correct in that the SEC itself would not send Bruno to jail, but the SEC could recommend criminal action to the Federal Bureau of Investigation resulting in imprisonment for up to ten years for a violation.

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D

A) The posteffective period
B) The acknowledgement period
C) The approved period
D) The sell period
E) The investment period

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A

A) She was not convicted of insider trading and sentenced to jail.
B) After a jury trial she was found innocent of insider trading and did not go to jail for anything.
C) She was not convicted of insider trading, but she went to jail for convictions relating to statements made to SEC investigators.
D) She pled guilty to lesser offenses on all counts, paid a large fine, and all charges were dismissed.
E) Charges were dismissed after she agreed to repurchase all shares of stock.

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A) The Sarbanes-Oxley Act of 2002
B) The Securities Acts Amendments of 1990
C) The Market Reform Act of 1990
D) The Securities Enforcement Remedies and Penny Stock Reform Act of 1990
E) The National Securities Markets Improvement Act of 1996

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A) For any alleged violations, Bruno could raise the defense that a plaintiff was aware of the omission or false statement when the security was purchased; but no defense is available based on the theory that omitted or false statements were immaterial to the sale of the security.
B) For any alleged violations Bruno could raise the defenses that a plaintiff was aware of the omission or false statement when the security was purchased, and that any omitted or false statement was immaterial to the sale of the security.
C) Except for the violation of selling securities before the effective registration date, Bruno could raise the defense that a plaintiff was aware of the omission or false statement when the security was purchased; but no defense is available based on the theory that omitted or false statements were immaterial to the sale of the security.
D) Except for the violation of selling securities before the effective registration date, Bruno could raise the defenses that a plaintiff was aware of the omission or false statement when the security was purchased, and that any omitted or false statement was immaterial to the sale of the security.
E) No defenses are available to Bruno because he had already been held liable to the SEC once.

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Jason could be held liable for insider t...

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A) The Class Prohibition Act of 1997
B) The Sarbanes-Oxley Act of 2002
C) The National Securities Markets Improvement Act of 1996
D) The Market Reform Act of 1990
E) The Securities Litigation Uniform Standards Act of 1998

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A) The Securities Act of 1933
B) The Securities Exchange Act of 1934
C) The Exchange Commission Act of 1932
D) The Oversight Act of 1935
E) The Stock and Bond Act of 1930

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A) Section 32(c)
B) Section 15(b)
C) Rule 10(b) -5
D) Rule 5(c) -2
E) Rule 2(c) -5

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