REG_Govt Regs Flashcards
(27 cards)
What purpose does a company registration with the Securities and Exchange Commission serve?
This type of registration allows big firms like Well-Known Seasoned Issuers to file registration statement covering three years and sell whenever they want.
What is the length of the waiting period for the Securities and Exchange Commissions approval of a registration?
20 business days (theoretically).
List the distribution process for securities
Issuer-Underwriter-Broker-Investor.
Define “free writing”.
Written advertising material that is not permissible during the waiting period.
List some of the traditional do’s and don’ts relating to the registration process with the Securities and Exchange Commission.
- Pre-filing period: no offers/no sales;
- Waiting period: some offers/no sales;
- Post-effective period: offers and sales ok.
Define “free writing prospectus”.
Written literature, other than prospectus that Well-Known Seasoned Issuers and other big firms can use at any time to promote securities.
Define “pre-filing period”.
Period before the registration statement is filed with the SEC.
What does the acronym WKSI stand for?
Well-Known Seasoned Issuers.
List the key Securities and Exchange Commission securities that are exempt .
- Bank;
- Common carrier;
- Bankruptcy receivers;
- Insurance policies/annuities.
List the primary Securities and Exchange Commission transactions that are exempt.
- Small Offerings;
- Private Placements;
- Intrastate transactions.
True or false: State regulations can enforce antifraud rules and can regulate the merits of covered securities.
False.
State regulations can only enforce antifraud rules and require notice filings. However, state regulations cannot regulate merits or register “covered securities.”
List the “Regulation D” exemptions.
- Rule 504 (small offering-$1m);
- Rule 505 (small offering-$5m);
- Rule 506 (private placement-unlimited).
List the requirements for an intrastate offering (Rule 147).
- All offerees must be in the state;
- 80% of issuer’s assets in state;
- 80% of issuer’s revenues in state;
- 80% of proceeds used in state.
List the elements that a plaintiff must prove in a Securities Exchange Act §12(a)(2) lawsuit.
- Misrepresentation or omission;
- Materiality;
- Tracing;
- D is a “seller;” and
- Damages.
List the elements of a Securities Exchange Act §12(a)(1) lawsuit.
- D violated Sec. 5;
- D was a “seller;”
- Damages.
What elements must a plaintiff prove to win a §11 claim under the Securities and Exchange Act?
A false statement or omission of fact appeared in a registration statement, The misstatement or omission was material, Plaintiff bought securities that were issued under the defective registration statement, Plaintiff suffered damages.
List the Securities and Exchange Act §12(a)(1) remedies to violations of §5 of the Act.
- Sale of unregistered securities;
- Failure to deliver prospectus;
- Use of inadequate prospectus;
- Offer before filing registration statement.
When is an accounting firm liable regarding securities with which it has done work?
Liable only for that part of the registration statement (financial statements) that it prepared.
List the types of required reports described in the Securities Exchange Act.
- 10-Ks;
- 10-Qs;
- 8-Ks.
List the elements of a Securities Exchange Act §18(a) claim.
- False statement;
- In a “filed” document;
- Materiality;
- Purchase or sale;
- “Eyeball” Reliance;
- Causation; and
- Damages.
What is the purpose of the Securities Exchange Act §10(b).
This section punishes fraud in purchase or sale of securities in violations of SEC rules, like 10b-5.
What are the major provisions of the Securities Exchange Act of 1934?
- Created SEC;
- Created periodic reporting system;
- Punishes fraud;
- Regulates securities business.
List the elements of a Securities Exchange Act §10(b) liability.
- Misstatement;
- Materiality;
- Reliance;
- Causation;
- Purchase or sale; and
- Damages.
What is the key to assuming liability under the Securities Exchange Act §18(a)?
False statement in a “filed document.”
