LEGL 2700 EPSTEIN PRE-FINAL
UNIT QUESTIONS AND ANSWERS
100% PASS
security - ✔✔owning a piece of a business that others are managing; any note, stock,
treasury stock, bond, debenture, evidence of indebtedness, etc
securities and exchange commission (SEC) - ✔✔agency at the federal level that is
responsible for administering the federal securities laws; consists of five commissioners;
possess quasi-legislative and quasi-judicial powers
blue sky laws - ✔✔state level laws that regulate the offer and sale of securities
securities act of 1933 - ✔✔the first major federal law regulating the securities industry; it
requires the disclosure of info to the potential investors; info must be true and not
misleading
issuer - ✔✔individual or business organization offering a security for sale to the public
underwriter - ✔✔anyone who participates in the original distribution of securities; sells
securities for issuer or guarantees the sale
Disclaimer: Original Content, No Copyright Infringement, All Rights Reserved © 2025 1
, seller - ✔✔anyone who contracts with a purchaser causing the purchase to occur
registration statement - ✔✔detailed disclosure of financial info about the issuer and
controlling individuals
prefiling period - ✔✔period during which it is legal to engage in preliminary
negotiations and agreements with underwriters; illegal to sell the securities
waiting period - ✔✔period that is generally 20 days long to allow the SEC to review;
still illegal to sell the securities; not illegal to solicit offers, just can't accept them yet and
form contact
posteffective period - ✔✔period during which it is now legal for sales to commence
prospectus - ✔✔contains financial info related to issuer and controlling persons;
provided to interested investor; just conform to the statutory requirements (does not
mean it is a good investment!)
securities and exchange act of 1934 - ✔✔federal law that regulates transfers of securities
after the initial sale (secondary market); created the SEC; illegal to sell unregistered
securities on national exchange; registration requires filing prescribed forms with stock
exchange and SEC
rule 10b-5 - ✔✔principal anti-fraud rule on secondary market fraud issues; civil and
criminal sanctions; applies even if not a registered security
Disclaimer: Original Content, No Copyright Infringement, All Rights Reserved © 2025 2
UNIT QUESTIONS AND ANSWERS
100% PASS
security - ✔✔owning a piece of a business that others are managing; any note, stock,
treasury stock, bond, debenture, evidence of indebtedness, etc
securities and exchange commission (SEC) - ✔✔agency at the federal level that is
responsible for administering the federal securities laws; consists of five commissioners;
possess quasi-legislative and quasi-judicial powers
blue sky laws - ✔✔state level laws that regulate the offer and sale of securities
securities act of 1933 - ✔✔the first major federal law regulating the securities industry; it
requires the disclosure of info to the potential investors; info must be true and not
misleading
issuer - ✔✔individual or business organization offering a security for sale to the public
underwriter - ✔✔anyone who participates in the original distribution of securities; sells
securities for issuer or guarantees the sale
Disclaimer: Original Content, No Copyright Infringement, All Rights Reserved © 2025 1
, seller - ✔✔anyone who contracts with a purchaser causing the purchase to occur
registration statement - ✔✔detailed disclosure of financial info about the issuer and
controlling individuals
prefiling period - ✔✔period during which it is legal to engage in preliminary
negotiations and agreements with underwriters; illegal to sell the securities
waiting period - ✔✔period that is generally 20 days long to allow the SEC to review;
still illegal to sell the securities; not illegal to solicit offers, just can't accept them yet and
form contact
posteffective period - ✔✔period during which it is now legal for sales to commence
prospectus - ✔✔contains financial info related to issuer and controlling persons;
provided to interested investor; just conform to the statutory requirements (does not
mean it is a good investment!)
securities and exchange act of 1934 - ✔✔federal law that regulates transfers of securities
after the initial sale (secondary market); created the SEC; illegal to sell unregistered
securities on national exchange; registration requires filing prescribed forms with stock
exchange and SEC
rule 10b-5 - ✔✔principal anti-fraud rule on secondary market fraud issues; civil and
criminal sanctions; applies even if not a registered security
Disclaimer: Original Content, No Copyright Infringement, All Rights Reserved © 2025 2
