Chapter 8 Part 1 Flashcards Preview

Series 65 > Chapter 8 Part 1 > Flashcards

Flashcards in Chapter 8 Part 1 Deck (20):
1

if a regulation is violated, the four basic tools used to enforce the Uniform Securities Act are

1. Orders by the Administrator 2. Actions against registration 3. Civil actions 4. Criminal actions

2

An offer or offer to sell is

the attempt, or solicitation, to dispose of a security for value.

3

The term sale is considered

any contract or agreement to dispose of a security for value. A sale is the result of a successful offer

4

jurisdiction refers to

the power to interpret and apply the law or the territorial range of authority to control

5

An Administrator has jurisdiction over any offer to buy or sell a security that is

made or accepted in her state. An offer is made in a state if the offer is originated in, or directed to and received in, the Administrator's state .

6

the USA does not recognize states where securities are

delivered or where the payment for the purchase is made

7

The USA jurisdiction rule does not recognize the state where mail is

forwarded

8

Though the offer was directed to Arizona, the client, Ms. Rose, never received the offer in Arizona, so

no offer was made in Arizona

9

The state Administrator will have jurisdiction over any offer made through a newspaper when the newspaper is published in a state, but there is an exception. lf a newspaper is published in a state and more than

two-thirds of its circulation is outside the publishing state, then an offer was not made in the state--no state Administrator will have jurisdiction over the offer

10

An offer in a newspaper may only be made in the state in which

the paper is published

11

If an offer is made using radio or television, the offer is considered lo have been made

only in the state in which the broadcast originates

12

US phone or mail offer

The state from which it oJiginated and the state to which it is directed (For mail, not the state to which it may be forwarded)

13

Any security given or delivered with, or as a bonus for, the purchase of a security, which is considered

both an offer and a sale. For example, if an investor buys a bond with a warrant attached, the warrant is a part of the sale, even though an investor did not purchase it separately

14

The sale of a warrant or right enabling the holder to subscribe to purchase another security is considered an

offer to sell the other security. Stated plainly, since rights and warrants are securities, a sale takes place when the warrant or right is purchased. however, warrants and rights also represent an offer to sell another security

15

The following actions do NOT involve an offer or sale

A bona fide pledge or loan of stock; An exchange of securities due to a merger, reorganization, or bankruptcy; A stock dividend, if the stockholders do not provide anything of value in return

16

Ordinarily, a gift of anything does not involve a

sale

17

Remember, the term sale is considered any contract or agreement to

dispose of a security for value. If a security is given as a gift, the recipient receives it without an exchange in value--no payment is required

18

However, a gift of assessable securities would involve

an offer and a sale

19

Assessable stock is a class of stock in which

the issuing company is allowed to demand additional funds from existing stockholders

20

individuals could give gifts of assessable stock without disclosing that additional capital, an assessment, was required to maintain ownership. The Uniform Securities Act

made this practice illegal

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