LEGL 2700 Epstein Unit 4 Exam With Complete
Solutions
What broadly classifies as a "security" for the purposes of federal regulation? -
ANSWER Any interest or instrument that offers the right to subscribe to purchase stock,
bond, or any certificate of interest.
Supreme Court says when one person invests money and looks to others to manage the
money for profit.
Who is responsible for security regulation at the federal level? - ANSWER Securities and
Exchange Commissions (SEC):
- Responsible for administering the federal securities laws
Has quasi-legislative, quasi-executive, and quasi-judicial functions
What is the Securities Act of 1933? - ANSWER Applies to the first sale of the security.
There must be an available disclosure of information to the potential investors.
The information should be accurate and not misleading.
Penalties for violating Securities Act of 1933? - ANSWER Criminal Punishment, Civil
liability, Equitable remedy of an injunction
What is the Securities Exchange Act of 1934? - ANSWER Regulates transfers of
securities AFTER the initial sale
Created the Securities and Exchange Commission (SEC)
, Illegal to sell unregistered securities on national exchange
Registration requires filing prescribed forms with stock exchange and SEC
Ongoing reporting requirements (10-Q, 10-K, 8-K, etc)
What are the phases of going public? - ANSWER Prefiling Period, Waiting Period,
Posteffective Period
Prefiling Period - ANSWER Legal to engage in preliminary negotiations and agreements
with underwriters
Illegal to sell the securities
Waiting Period - ANSWER Generally 20 days to allow SEC to review
Still illegal to sell securities
Not illegal to solicit offers, just can't accept them yet
Posteffective Period - ANSWER Sales can commence
What documents are required in going public? - ANSWER Registration Statement and
Prospectus
Registration Statement - ANSWER Full disclosure of financial information concerning
issuer and control persons
Prospectus - ANSWER Financial information with respect to issuer and control persons:
Solutions
What broadly classifies as a "security" for the purposes of federal regulation? -
ANSWER Any interest or instrument that offers the right to subscribe to purchase stock,
bond, or any certificate of interest.
Supreme Court says when one person invests money and looks to others to manage the
money for profit.
Who is responsible for security regulation at the federal level? - ANSWER Securities and
Exchange Commissions (SEC):
- Responsible for administering the federal securities laws
Has quasi-legislative, quasi-executive, and quasi-judicial functions
What is the Securities Act of 1933? - ANSWER Applies to the first sale of the security.
There must be an available disclosure of information to the potential investors.
The information should be accurate and not misleading.
Penalties for violating Securities Act of 1933? - ANSWER Criminal Punishment, Civil
liability, Equitable remedy of an injunction
What is the Securities Exchange Act of 1934? - ANSWER Regulates transfers of
securities AFTER the initial sale
Created the Securities and Exchange Commission (SEC)
, Illegal to sell unregistered securities on national exchange
Registration requires filing prescribed forms with stock exchange and SEC
Ongoing reporting requirements (10-Q, 10-K, 8-K, etc)
What are the phases of going public? - ANSWER Prefiling Period, Waiting Period,
Posteffective Period
Prefiling Period - ANSWER Legal to engage in preliminary negotiations and agreements
with underwriters
Illegal to sell the securities
Waiting Period - ANSWER Generally 20 days to allow SEC to review
Still illegal to sell securities
Not illegal to solicit offers, just can't accept them yet
Posteffective Period - ANSWER Sales can commence
What documents are required in going public? - ANSWER Registration Statement and
Prospectus
Registration Statement - ANSWER Full disclosure of financial information concerning
issuer and control persons
Prospectus - ANSWER Financial information with respect to issuer and control persons:
