LGS 200 FINAL (RUTH ANNE HALL) EXAM GRADED A+ LATEST UPDATE.
Business Judgment Rule ANS >>> As long as decisions are
made in good faith/honest belief that the action was taken in
best interest of the company, company CANNOT be held liable
for losses to shareholders.
Entrepreneurs ANS >>> A person who forms and operates a
new business either by him or herself, or with others.
Importance of choosing the right business organization ANS
>>> 1. Easiest for one person to own a business, but also
riskiest because sole proprietor holds all liabilities
2. Incorporating allows you to protect personal assets (same
with LLC's).
,Securities Act of 1933 ANS >>> 1. Primarily regulates the
issuance of securities by a corporation, a general or limited
partnership, an unincorporated association, or an individual
2. Applies to initial issues of securities, including IPOs and sales
of new securities by established companies. Includes issues of
securities online
Purpose of laws (Securities Act of 1933) ANS >>> To require full
and honest disclosure of information to investors.
Security Exchange Commission (SEC) ANS >>> A federal
administrative agency that is empowered to administer federal
securities laws.
- Adopts rules and regulations to interpret and implement
federal securities laws
- Investigates alleged securities violations and brings
enforcement actions
- Regulates activities of securities brokers and advisors
Sarbanes-Oxley Act ANS >>> - Erects wall between investment
bankers and securities analysts
- To bring more transparency to securities markets and
eliminate conflicts of interest in the industry
, How Sarbanes-Oxley Act applies to securities analysts and
investment bankers ANS >>> 1. Fear that analysts (who provide
investment advice to investors) would be pressured to give high
marks to companies being assisted by firm's investment bankers
2. To avoid conflict, protects analysts from review, pressure, and
oversight by investment bankers. Analysts must disclose each
research report or public appearance of any conflict of interest
known to exist at the time
Short swing profits / trading ANS >>> Profits that are made by
statutory insiders on trades involving equity securities of their
corporation that occur within six months of each other. These
profits belong to the corporation.
Excludes: involuntary transactions and transactions that occur
within six months before becoming an insider
Insider trading (Sec. 10(b)(5) ANS >>> - Prohibits the use of
manipulative and deceptive devices in the purchase of sale of
securities in contravention of rules and regulations prescribed
by the
SEC
Business Judgment Rule ANS >>> As long as decisions are
made in good faith/honest belief that the action was taken in
best interest of the company, company CANNOT be held liable
for losses to shareholders.
Entrepreneurs ANS >>> A person who forms and operates a
new business either by him or herself, or with others.
Importance of choosing the right business organization ANS
>>> 1. Easiest for one person to own a business, but also
riskiest because sole proprietor holds all liabilities
2. Incorporating allows you to protect personal assets (same
with LLC's).
,Securities Act of 1933 ANS >>> 1. Primarily regulates the
issuance of securities by a corporation, a general or limited
partnership, an unincorporated association, or an individual
2. Applies to initial issues of securities, including IPOs and sales
of new securities by established companies. Includes issues of
securities online
Purpose of laws (Securities Act of 1933) ANS >>> To require full
and honest disclosure of information to investors.
Security Exchange Commission (SEC) ANS >>> A federal
administrative agency that is empowered to administer federal
securities laws.
- Adopts rules and regulations to interpret and implement
federal securities laws
- Investigates alleged securities violations and brings
enforcement actions
- Regulates activities of securities brokers and advisors
Sarbanes-Oxley Act ANS >>> - Erects wall between investment
bankers and securities analysts
- To bring more transparency to securities markets and
eliminate conflicts of interest in the industry
, How Sarbanes-Oxley Act applies to securities analysts and
investment bankers ANS >>> 1. Fear that analysts (who provide
investment advice to investors) would be pressured to give high
marks to companies being assisted by firm's investment bankers
2. To avoid conflict, protects analysts from review, pressure, and
oversight by investment bankers. Analysts must disclose each
research report or public appearance of any conflict of interest
known to exist at the time
Short swing profits / trading ANS >>> Profits that are made by
statutory insiders on trades involving equity securities of their
corporation that occur within six months of each other. These
profits belong to the corporation.
Excludes: involuntary transactions and transactions that occur
within six months before becoming an insider
Insider trading (Sec. 10(b)(5) ANS >>> - Prohibits the use of
manipulative and deceptive devices in the purchase of sale of
securities in contravention of rules and regulations prescribed
by the
SEC
