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Flashcards in Reading Notes Deck (10):

the sale of a security does not include:

(1) preliminary negotiations or agreements between the issuer and underwriter or (2) a gift of securities


the SEC merely attempts to make certain that all pertinent info is fully disclosed in the registration statement and prospectus by requiring that:

(1) the issuer file a registration statement before securities are offered or sold in interstate commerce
2. a prospectus that meets the requirements of the act be provided to prospective buyers
3. penalties be imposed for violations


true or false: all federal and municipal securities are exempt



true or false: the exemption described for banks doesn't apply to bank holding companies



the Rule 147 exemption

available only if the entire issue is offered and sold exclusively to residents of a single state


the following conditions must be met in order to have a distribution qualify as an intrastate offering exempt from federal registration (Rule 147)

1. for nine months from the date of the last sale by the issuer, resales by any person will be made only to persons resident within the same state or territory
2. at least 80% of the issuer's gross revenue must be derived from operations within the state
3. at least 80% of the proceeds of the offering must be used for biz purposes within the state
4. at least 80% of the issuer's assets must be located within the state


the registration statement must be signed by:

1. the principal executive officer (usually the CEO), 2. principal financial officer (usually CFO) and 3. majority of the BOD


deficiency letter

what will be sent if the SEC finds something is not stated properly, is missing, or needs further explanation when reviewing the registration statement


stop order as it relates to registering with the SEC

demands that all underwriting activities cease


red herring

used to acquaint