Regulations: Securities Exchange Act of 1934

An individual who made a profit of $1,000,000 from insider trading would be subject to a civil penalty of:

$3,000,000

Which of the following can NOT be a stabilizing bid for a new issue that has a Public Offering Price of $30 per share?

$30.03

Under the "penny stock rule," an established customer that is exempt from the rule is defined as a person who has made a deposit of funds or securities with that broker-dealer more than:

1 year previously

If an individual is found guilty of insider trading, the civil penalty imposed can be how many times the profit achieved or loss avoided?

3X

If an event occurs which requires an issuer to make an 8K filing with the SEC, the filing must be made:

4 business days after the event

An investor must file a 13D report with the SEC if a:

5% or greater common stock holding is purchased of one issuer

All of the following individuals would be considered an insider EXCEPT:

A person who uses public information to trade in that company's stock for a profit

Which of the following describes a "Chinese Wall" as used in the securities industry?

A separation of investment banking and trading functions within a broker-dealer to stop the potential flow of inside information

Which statement is TRUE about stabilizing bids?

A stabilizing bid is placed by the syndicate manager

Who is NOT required to be fingerprinted at a broker-dealer?

Administrative Assistant, ACATs clerk

Municipal market participants are subject to which of the following?

Anti-fraud Rule 10b-5 under the Securities Exchange Act of 1934

The Chairman of XYZ Corporation, while playing golf with a neighbor, casually mentions that this quarter's earnings are likely to be lower than expected. Based on this information, the neighbor sells short XYZ stock the next day. Which statement is TRUE?

Both the Chairman and the neighbor have violated the insider trading rules

Under the provisions of the Securities Exchange Act of 1934, all of the following must be registered EXCEPT:

Clerical employees of member firms

The Securities Exchange Act of 1934 regulates trading of all of the following EXCEPT:

Commodities Futures

All of the following requires filing with the SEC EXCEPT:

Corporate marketing materials

Fines assessed for convictions involving violations of insider trading laws are paid to the:

Department of Treasury

All of the following statements are true about a tender offer for common shares EXCEPT:

During the life of the offer, the issuer can buy the stock in the market in addition to buying shares via the offer

Which statement is TRUE about a tender offer for common shares?

Each "sweetening" of the offer must extend the offer for an additional 10 business days

The Securities Exchange Act of 1934 regulates which of the following markets?

Exchanges, Listed Issues and ECNs

The determination of which stocks are marginable is made by (the):

FRB

Which statement is FALSE regarding a broker-dealer holding margin and fully paid securities?

Fully paid securities can be commingled with the securities of other customers and rehypothecated

If a registered representative solicits an order from a new customer to purchase a "penny stock" that is trading over-the-counter, which procedure is required?

Have the customer sign a statement that he or she understands the risks involved prior to executing the order

When is a foreign broker-dealer permitted to solicit U.S. based clients?

If the foreign broker-dealer establishes an SEC-registered U.S. subsidiary

An information barrier must be put in place between:

Institutional Sales and Retail Sales

Which statement is FALSE about listed securities?

Listed issuers must report their results to the FRB

All of the following publicly held issuers must report to the SEC under the Securities Exchange Act of 1934 EXCEPT:

Municipalities

The Securities Exchange Act of 1934 regulates all of the following markets EXCEPT:

Primary market

Corporate officers who wish to trade their own company's stock must comply with all of the following rules EXCEPT:

Purchase restrictions through the exercise of stock options

The Securities and Exchange Commission was created by the:

Securities Exchange Act of 1934

The Securities Exchange Act of 1934 regulates which of the following?

Securities transactions only

Under Federal law, stock may NOT be tendered from which of the following accounts?

Short margin account

Which statement is TRUE regarding corporate reports sent to shareholders?

The 10K report consists of the annual financial statements

An officer of a company has been invited by a large mutual fund company to give a talk to the fund company's analysts about its business plans and prospects. At the talk, the officer inadvertently discloses material information that could affect the stock's price. Which statement is FALSE?

The company must file a 10K report immediately with the SEC disclosing the information to avoid insider trading liability

If a broker-dealer holds fully paid customer securities, which statement is TRUE?

The securities must be segregated and held in safekeeping

Under Regulation M, which statement is TRUE regarding stabilizing bids entered by market makers?

There is no time limitation on the period that a stabilizing bid can be maintained

An officer of a listed company calls his registered representative and tells him to sell the maximum amount of that company's common shares in accordance with Rule 144. Prior to placing the order to sell, the registered representative calls five of his customers and tells them to sell that company's stock. Which statement is TRUE?

This action violates the Securities Exchange Act of 1934

The provisions of the Securities Exchange Act of 1934 cover all of the following activities EXCEPT:

Trading rules for exempt securities

The Securities and Exchange Commission is empowered to administer all of the following Acts EXCEPT:

Uniform Securities Act

If a publicly traded corporation declares bankruptcy:

an 8K report must be filed within 4 business days

All of the following events would require a corporation to file an 8K report with the SEC EXCEPT declaration of (a):

dividend

The Securities Exchange Act of 1934 established "self regulatory organizations" (SROs) and empowered these organizations to do all of the following EXCEPT:

establish courts of justice for aggrieved customers to settle disputes, fix commission rates to be charged to public customers

An officer of a publicly traded company is prohibited from all of the following actions EXCEPT:

exercising call options or pre-emptive rights on that issuer's stock

All of the following statements about the Securities Exchange Act of 1934 are true EXCEPT the:

general provisions of the Act apply to exempt securities

A broker-dealer may hold fully paid customer securities:

if the securities are segregated and held in safekeeping

All of the following statements are true regarding "insiders" EXCEPT:

insiders are prohibited from holding or exercising options on the related company's stock

The Self Regulatory Organizations (SROs) are:

membership organizations

Stabilization of new issues is:

permitted at, or below, the Public Offering Price

Under Rule 10b-5-1, pre-arranged trading plans by insiders are:

permitted only if the provisions cannot be altered during the plan's life

Pre-arranged trades by insiders are:

permitted under Rule 10b-5-1

The Securities Exchange Act of 1934 is primarily concerned with:

prevention of manipulation and fraud in the secondary market

During a tender offer, all of the following activities are prohibited EXCEPT:

purchasing the stock in a cash account and tendering 4 business days after trade date

All of the following are covered under the Securities Exchange Act of 1934 EXCEPT:

registration of new issues

All of the following must be sent to broker-dealer customers semi-annually EXCEPT a broker-dealer's:

securities inventory amounts

SEC Regulation FD covers:

selective disclosure of material non-public information by issuers

The definition of a "short swing" profit under the Securities Exchange Act of 1934 is a completed round turn trade effected at a profit within:

six months by an insider

All of the following statements are true about margin on securities EXCEPT:

the FRB sets initial margins for exempt securities