BLAW 3310 Final Exam UPDATED
Questions and CORRECT Answers
Exhaustion Doctrine - CORRECT ANSWER - Requires a party to complete all agency
review procedures regarding a challenged rule or a disciplinary action before. An action must be
considered final by an agency before proceeding to court.
Adjudicatory Hearings Process - CORRECT ANSWER - 1) Complaint is filed by an
agency against a violator. 2) The business responds to the complaint. 3) The agency determines
if a hearing is warranted. 4) If a hearing is set, an administrative law judge is appointed to
preside. 5) A hearing is conducted. 6) The administrative law judge renders an opinion. 7)
Dissatisfied parties may appeal.
Review of Substantive Determination - CORRECT ANSWER - The courts yield to the
agency's judgment and do not find an agency's actions arbitrary and capricious if the following
are true: 1) The agency has sufficiently explained the facts and its policy concerns. 2)Those facts
have some basis in the agency's record. 3) On the basis of those facts and concerns, a reasonable
person could reach the judgments as the agency.
Why create an agency? - CORRECT ANSWER - Administrative agencies are created
when a problem requires expertise and supervision
How do agencies enforce rules? - CORRECT ANSWER - Mix of formal and informal
ways to obtain compliance. May simply ask party to refrain from an action (informal), but if not,
may seek imposition of a fine (Formal). Black Beauty Coal Company was asked to shut down
faulty conveyor belt when inspector smelled burning coal (informal). Supervisor refused, so
inspector proposed a penalty assessment (formal). Black Beauty petitioned US Court of Appeals
for review and the courts upheld the agency penalty.
How do administrative agencies make laws? - CORRECT ANSWER - Legislative Rule:
1st- provide public notice and give opportunity for comments for 60-90 days. 2nd- Agency
considers comments. 3rd - may or may not make changes before issuing final rule. Once an
agency issues the final rule, it may be appealed to the agency, then to the US Court of Appeals.
Interpretive Rule: statements issued by an agency to its staff and the public with guidance
regarding how an agency sees a legislative rule or a statute in practice.
, What are the primary sources of administrative law? - CORRECT ANSWER - 1) The
enabling statutes of administrative agencies. 2) The Administrative Procedures Act. 3) Rules
issued by administrative agencies. 4) Court decisions reviewing the validity of agency actions.
What are the 4 basic elements of a security? - CORRECT ANSWER - 1) An investment of
money. 2) In a common enterprise. 3) With an expectation of profits 4) Generated by the efforts
of persons other than the investors.
What is contained in the registration statement? - CORRECT ANSWER - A prospectus
containing the security issuer's finances and business, the purpose of the offering, the plans for
the funds collected, the risks involved in the business venture, the promoter's managerial
experience and financial compensation, and financial statements certified by CPAs. The second
part is the the detailed regulation S-K with more history and detail than the prospectus.
What is a WKSI? - CORRECT ANSWER - A well known seasoned issuer are securities
issuers that have offered at least $1 billion in debt securities previously or have a public-equity
market capitalization of at least $700 million. They can file registration statements the day they
announce a new offiering rather than submitting it b/f hand to the SEC; no need to wait for SEC
staff review; may use a prospectus format that allows them to update info via the web. Such
securities are under shelf registration = may be sold anytime in the next 3 years.
1933 Act - CORRECT ANSWER - The Securities Act of 1933 required that investors
receive financial information from securities being offered for public sale. This means that prior
to going public, companies had to submit information made readily available to investors. This
registration statement is required and available on the Securities and Exchange Commission
website.
What is section 11 of the 1933 Securities Act? - CORRECT ANSWER - Section 11
provides for civil liability for issuers who make material misstatements or omissions in the
issuance of securities. Any person who buys a security covered by a registration statement that
contains false or misleading information that would reasonable affect an investment decision, or
that omits info that was important to a decision to purchase, may sue to recover losses incurred in
that purchase.
Questions and CORRECT Answers
Exhaustion Doctrine - CORRECT ANSWER - Requires a party to complete all agency
review procedures regarding a challenged rule or a disciplinary action before. An action must be
considered final by an agency before proceeding to court.
Adjudicatory Hearings Process - CORRECT ANSWER - 1) Complaint is filed by an
agency against a violator. 2) The business responds to the complaint. 3) The agency determines
if a hearing is warranted. 4) If a hearing is set, an administrative law judge is appointed to
preside. 5) A hearing is conducted. 6) The administrative law judge renders an opinion. 7)
Dissatisfied parties may appeal.
Review of Substantive Determination - CORRECT ANSWER - The courts yield to the
agency's judgment and do not find an agency's actions arbitrary and capricious if the following
are true: 1) The agency has sufficiently explained the facts and its policy concerns. 2)Those facts
have some basis in the agency's record. 3) On the basis of those facts and concerns, a reasonable
person could reach the judgments as the agency.
Why create an agency? - CORRECT ANSWER - Administrative agencies are created
when a problem requires expertise and supervision
How do agencies enforce rules? - CORRECT ANSWER - Mix of formal and informal
ways to obtain compliance. May simply ask party to refrain from an action (informal), but if not,
may seek imposition of a fine (Formal). Black Beauty Coal Company was asked to shut down
faulty conveyor belt when inspector smelled burning coal (informal). Supervisor refused, so
inspector proposed a penalty assessment (formal). Black Beauty petitioned US Court of Appeals
for review and the courts upheld the agency penalty.
How do administrative agencies make laws? - CORRECT ANSWER - Legislative Rule:
1st- provide public notice and give opportunity for comments for 60-90 days. 2nd- Agency
considers comments. 3rd - may or may not make changes before issuing final rule. Once an
agency issues the final rule, it may be appealed to the agency, then to the US Court of Appeals.
Interpretive Rule: statements issued by an agency to its staff and the public with guidance
regarding how an agency sees a legislative rule or a statute in practice.
, What are the primary sources of administrative law? - CORRECT ANSWER - 1) The
enabling statutes of administrative agencies. 2) The Administrative Procedures Act. 3) Rules
issued by administrative agencies. 4) Court decisions reviewing the validity of agency actions.
What are the 4 basic elements of a security? - CORRECT ANSWER - 1) An investment of
money. 2) In a common enterprise. 3) With an expectation of profits 4) Generated by the efforts
of persons other than the investors.
What is contained in the registration statement? - CORRECT ANSWER - A prospectus
containing the security issuer's finances and business, the purpose of the offering, the plans for
the funds collected, the risks involved in the business venture, the promoter's managerial
experience and financial compensation, and financial statements certified by CPAs. The second
part is the the detailed regulation S-K with more history and detail than the prospectus.
What is a WKSI? - CORRECT ANSWER - A well known seasoned issuer are securities
issuers that have offered at least $1 billion in debt securities previously or have a public-equity
market capitalization of at least $700 million. They can file registration statements the day they
announce a new offiering rather than submitting it b/f hand to the SEC; no need to wait for SEC
staff review; may use a prospectus format that allows them to update info via the web. Such
securities are under shelf registration = may be sold anytime in the next 3 years.
1933 Act - CORRECT ANSWER - The Securities Act of 1933 required that investors
receive financial information from securities being offered for public sale. This means that prior
to going public, companies had to submit information made readily available to investors. This
registration statement is required and available on the Securities and Exchange Commission
website.
What is section 11 of the 1933 Securities Act? - CORRECT ANSWER - Section 11
provides for civil liability for issuers who make material misstatements or omissions in the
issuance of securities. Any person who buys a security covered by a registration statement that
contains false or misleading information that would reasonable affect an investment decision, or
that omits info that was important to a decision to purchase, may sue to recover losses incurred in
that purchase.
