Materiality

Question 1

10b-5

Answer 1

It shall be unlawful for any person, directly or indirectly,
by the use of any means or instrumentality of interstate
commerce, or of the mails or of any facility of any
national securities exchange, . . .
(b) To make any untrue statement of a
material fact or to omit to state a material
fact necessary in order to make the
statements made, in the light of the
circumstances under which they were made,
not misleading . . .
in connection with the purchase or sale of any security

Question 2

SA Rule 408 and SEA R 12b-20

Answer 2

BASICALLY THAT OMISSIONS COUNT TOO  In addition to the information expressly
required to be included in a statement
or report, there shall be added such
further material information, if any,
as may be necessary to make the
required statements, in the light of the
circumstances under which they are
made not misleading.

Question 3

Item 101(a) of Reg S-K

Answer 3

FILING OBLIGATION IS ONE OF THE PLACES YOU CAN HAVE DUTY TO DISCLOSE Describe the general development of
the business of the registrant...during
the past five years…. Information shall
be disclosed for earlier periods if
material to an understanding of the
general development of the business.

Question 4

TSC industries

Answer 4

material = substantial likelihood alters total mix of information for reasonable investor

Question 5

Basic

Answer 5

Forward looking info: prob x magnitude

Question 6

SEC Securities Accounting Bulletin No. 99

Answer 6

SEC input on 5% test, ok for preliminary assumption but must look at other factors

Question 7

Item 303(a)(3)(ii) of Reg S-K

Answer 7

MD&A disclosure in the RS