BLAW EXAM #4
Which legislation regulates the issuance of securities to public investors by requiring that companies file certain information intended to inform investors who are considering entering into a securities transaction?
The Securities Act of 1933
Which federal administrative agency enforces the Fair Labor Standards Act (FLSA) and its regulations?
The United States (U.S.) Department of Labor
In the Reves vs. Ernst & Young case, the United State Supreme Court adopted the family resemblance test to determine whether a promissory note fell under the jurisdiction of securities laws.
True.
T/F: Agents are classified into one of three broad categories: (1) employee agents; (2) independent contractors; or (3) gratuitous agents.
True.
T/F: Courts look to state common law and statutes for guidance in determining independent contractor status.
True.
T/F: Securities fall into one of two general categories: equity or debt.
True.
T/F: The SOX Act does not require any for al allegation of wrongdoing as a prerequisite for intervening in an extraordinary payment.
True.
T/F: Workers' compensation statues establish a structure for an injured employee to be compensated through a statutorily mandated insurance program as the exclusive remedy for workplace injuries or illnesses.
True.
To be eligible for Family and Medical Leave Act (FMLA) benefits, an employee must have worked for the company for at least twelve (12) months and have worked 1,250 hours during the pas twelve (12) months.
True.
The Family and Medical Leave Act (FMLA) mandates that employers provide up to _____ weeks of unpaid leave to employees for purposes related to family medical matters during any ______-month period.
Twelve (12); twelve (12)
Approximately what percentage of American workers are professionally licensed?
Twenty-one (29) percent
In the event an employee is terminated for whistleblowing, the Dodd-Frank anti-retaliation provision allows the whistleblower to sue for up to _____.
Two (2) times back pay.
Which of the following is true regarding the formalities required to create an agency relationship?
A minority of states have a statutory equal dignity that sets out formalities for certain principal-agent transactions.
The SOX Act was intended to impose stricter regulation and controls on how corporations do business though regulation of which of the following three (3) areas?
Auditing; financial reporting; and internal corporate governance.
What are two prevalent forms of equity instruments issued by corporations?
Common stock and preferred stock.
What occurs when an agent agrees to act for the principal?
Consent
The Securities and Exchange Commission's (SEC's) computer databased is known as
EDGAR.
Individual employees who are authorized to transact business on behalf of the employer-principal are called
Employee agents.
A common form of agency is a(n) _____ relationship.
Employer-employee
Of the high-profile corporate scandals that erupted at major public companies in 200 and 2001, which of the following is arguably the most notorious?
Enron
Securities fall into one of two general categories: _____ or _____.
Equity; debt.
Workers' compensation statutes establish a structure for an employee to be compensated through a statutorily mandated insurance program as the _____ remedy for workplace injuries or illness.
Exclusive.
A security is any investment that involves a person giving something with a(n) _____ through the efforts of a(n) _____.
Expectation of profit; third party.
In general, an agency relationship is terminated either though _____ or _____.
Express acts; operation of law.
T/F: Employee privacy protection from the use of regular or random drug or alcohol tests in the workplace is governed primarily by federal statute.
False.
T/F: Employers are required to establish retirement plans for their employees.
False.
T/F: In all agency relationships, the agent authorizes the principal to provide services or accomplish some task on behalf of the agent and under the agent's charge.
False.
T/F: In the securities market, investors seek a return form their investment based on a guaranteed rate of return.
False.
T/F: Public companies have been subject to regulatory safeguard requirements since the New York Stock Exchange was founded on March 8, 1817.
False.
T/F: Securities transactions occur in two settings: (1) the endorsement market, and (2) the non-indorsement market.
False.
T/F: Termination of the agency by the principal is known as renunciation.
False.
T/F: The Dodd-Frank whistleblower provisions are not based on money; instead, they are based on the behalf that concerned citizens will report corporate wrongdoing simply because it is the right thing to do.
False.
T/F: The Great Depression Employer Protection Act (EDGAR) is a major piece of federal legislation enacted in 1938 that regulates several important employment matters.
False.
T/F: The Sarbanes-Oxley Act of 2002 was intended to impose stricter regulation and controls on how corporations do business through regulation of three (3) broad ares: (1) marketing; (2) human resources; and (3) social responsibility.
False.
T/F: The federal securities laws are rooted in the "Great Recession" of the late 2000s and were designed to address the sharpest decline in economic activity since the Great Depression.
False.
T/F: The law requires the formal expression of an agency relationship between the principal and the agent.
False.
T/F: Through the Dodd-Frank Wall Street Reform and Consumer Protection Act, the United States Congress lifted many government restrictions on public corporations and financial markets.
False.
Upon approval by a _____ court, the SOX Act allows the _____ to force any _____ corporate payouts into a government-controlled emergency escrow fund that is pending further investigation by authorities.
Federal; Securities and Exchange Commission (SEC); Extraordinary.
Generally, the Troubled Assets Relief Program (TARP) required loan recipients to _____.
Impose restrictions on compensation of offices; form an independent compensation committee; and give shareholders more say regarding the compensation of officers and directors.
An agent classified as a(n) _____ is not considered an employee and has no legal protections of employees, such as minimum and overtime compensation laws.
Independent contractor.
Financial institutions that provide services for investors and issuers related to securities transactions are known as _____.
Intermediaries.
Which of the following is true regarding the Electronic Communications Privacy Act (ECPA)?
It affords certain work-related privacy protections for employees in terms of telephone calls.
Which of the following is true regarding the risk capital test?
It analyzes whether an investment falls under the purview of a state's blue-sky laws.
Which of the following is true regarding the Securities and Exchange Commission (SEC)?
It has wide-ranging executive, legislative, and judicial powers.
Suppose that Jeff and Douglas are college roommates. Both chose to do their laundry at the dormitory laundry facility on Tuesday evening. Since Jeff had to study for a biology examination, he asked Doug to pick up his laundry as a favor for him when it was done, and Doug agree to do so. In this case, Doug is ______.
Jeff's gratuitous agent.
Which of the following is true regarding professional licensing in the American workplace?
Licensing requirements for professions vary form state to state.
In 1996, the United States Congress _____ the types of transactions that may be regulated by the states by passing the ______.
Limited; National Securities Markets Improvements Act.
To determine whether the parties have in fact manifested an offer of agency and acceptance by the agent, courts apply a(n) _____ standard.
Objective.
In a _____ plan, the employer promises to pay a monthly sum to employees who retire form the company after a certain number of years of service.
Pension.
Which of the following is true regarding the Securities and Exchange Commission's intervention in an extraordinary payment case?
The SOX Act does not require any formal allegation of wrongdoing as a prerequisite for intervening in an extraordinary payment case.
Public companies have been subject to regulatory safeguard requirements since the _____ was enacted.
Securities Exchange Act of 1934.
Which of the following is the centerpiece of labor-management regulation statutes?
The National Labor Relations Act
Which federal agency implements, administers and enforces the SOX Act mandates?
The Public Company Accounting Oversight Board (PCAOB)
In 2012, what was the percentage of American wage and salary workers who were members of a union?
11.3.
Which of the following is an example of an employer-provided, tax-deferred retirement savings account?
A 401(k) plan
Fundamentally, the Dodd-Frank whistleblower provisions are based on
A bounty plan.
Audit committees have substantial regulatory obligations under the SOX Act. These include which of the following?
Having the authority to engage, monitor, and terminate the company's outside auditing firm; implementing a system of controls that involves a comprehensive examination of the audit reports and methods used by the company and outside auditors to properly report information that truly reflects the financial condition of the company; and establishing a structure that facilitates communication directly between the audit committee and the auditors.
Issuing securities to the public markets for the first time is down as an
IPO (initial public offering)
In the _____ market for securities transactions, issuers raise capital by selling securities in public markets or in private placements.
Primary.
Termination by the principal is known as ______. When the agent unities the termination, is it known as _____.
Revocation; renunciation.
In the wake of multiple corporate and fraud malfeasance scandals that began to emerge in 2000, a public outcry and a growing lack of investor confidence in corporate financial disclosures caused the United States Congress to overhaul the entire corporate governance regulatory structure by passing the
Sarbanes-Oacley Act of 2002
Much of agency law exists on the _____ statutory level and is based on the _____.
State; Restatement (Third) of Agency
What independent regulatory body was created to provide financial stability after the financial; crisis of 2008?
The Financial Stability Oversight Council (FSOC)
Which of the following tests determines an agent's status based on : (1) the behavioral aspects of the agency; (2) the financial arrangements between the principal and the agent; and (3) the type of working relationship the parties have in terms of benefits and promises and continuing employment?
The IRS Test
To trigger protection under workers' compensation laws, the injury must meet two (2) main criteria: _____ and _____.
The injury was accidental; the injury occurred within the course of employment.
Which of the following is true regarding whether the law deems an Uber driver an Uber employee or an independent contractor?
The issue remains unresolved, as it is still working its way though courts and labor boards.
The Fair Labor Standards Act's (FLSA's) primary provisions mandate
The payment of a minimum wage; a maximum 40-hour work week; and restrictions on child labor.
Which of the following is true regarding termination of an agency relationship?
The principal and agent may agree to end the agency once the agency's purpose has been accomplished.
Through the Dodd-Frank Street Reform and Consumer Protection Act, the United States Congress imposed _____ restrictions on _____.
Tighter; public corporations, financial markets, and the extent to which firms engaged in risky investment transactions.