Business Structure Chapter 21 Vocabulary
Asset Acquisition - ✔✔Takeover where a firm buys all assets of another firm to gain control.
Blue-Sky Law - ✔✔State regulation for the sale of securities.
Comment/Deficiency Letter - ✔✔SEC response requiring more information on a registration filing.
Consolidation - ✔✔Merger where two firms unite under a new name.
Due Diligence - ✔✔Defense for false registration statement requiring exhaustive review.
Exemption - ✔✔Securities not needing SEC registration under the 1933 Act.
Foreign Corrupt Practices Act (FCPA) - ✔✔Law prohibiting foreign bribes and mandating accounting
controls.
Howey Test - ✔✔Defines a security as an investment earning from others' efforts.
Hostile Takeover - ✔✔Takeover opposed by the target firm's management.
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Insider Trading and Securities Fraud Enforcement Act of 1988 - ✔✔Increases penalties for insider
trading under the 1934 Act.
Material Misstatement - ✔✔Fact influencing decisions to buy or sell.
Merger - ✔✔Combining firms with one retaining the name.
Merit Review - ✔✔State-level review of securities registrations for investment quality.
Prospectus - ✔✔Document describing securities and the offering company.
Proxy Solicitations - ✔✔Process of seeking voting rights from shareholders.
Red-Herring Prospectus - ✔✔Issued before effective securities registration with a disclaimer.
Registration Statement (S-1) - ✔✔SEC filing disclosing information on a securities offering.
Rule 10b-5 - ✔✔SEC rule against fraud in securities sales.
Asset Acquisition - ✔✔Takeover where a firm buys all assets of another firm to gain control.
Blue-Sky Law - ✔✔State regulation for the sale of securities.
Comment/Deficiency Letter - ✔✔SEC response requiring more information on a registration filing.
Consolidation - ✔✔Merger where two firms unite under a new name.
Due Diligence - ✔✔Defense for false registration statement requiring exhaustive review.
Exemption - ✔✔Securities not needing SEC registration under the 1933 Act.
Foreign Corrupt Practices Act (FCPA) - ✔✔Law prohibiting foreign bribes and mandating accounting
controls.
Howey Test - ✔✔Defines a security as an investment earning from others' efforts.
Hostile Takeover - ✔✔Takeover opposed by the target firm's management.
%
Insider Trading and Securities Fraud Enforcement Act of 1988 - ✔✔Increases penalties for insider
trading under the 1934 Act.
Material Misstatement - ✔✔Fact influencing decisions to buy or sell.
Merger - ✔✔Combining firms with one retaining the name.
Merit Review - ✔✔State-level review of securities registrations for investment quality.
Prospectus - ✔✔Document describing securities and the offering company.
Proxy Solicitations - ✔✔Process of seeking voting rights from shareholders.
Red-Herring Prospectus - ✔✔Issued before effective securities registration with a disclaimer.
Registration Statement (S-1) - ✔✔SEC filing disclosing information on a securities offering.
Rule 10b-5 - ✔✔SEC rule against fraud in securities sales.
