Chapter 14 Review

A private placement may be sold to a maximum of?

35 non-accredited investors

Under Regulation D Private Placement Rules the restricted securities that are issued may be sold to a maximum of

35 non-accredited investors

What must be included in the prospectus of a Securities Act of 1933 regulates the distribution of new issues?

A statement that the SEC does not approve or disapprove of the securities issued, stabilization clause, and the date of the prospectus

Which of the following issues can be offered to the public under the 1933 Act?

An exempt security and a security registered under the Act. * The SEC never approves a preliminary prospectus *

What happens if you own 10% of the outstanding shares of a company?

Any profit realized on a short swing may be forfeited and you would be considered an insider. However, if you owned 10% of the company's debt, you would NOT be considered an insider.

What do SRO's not do?

Determine fair market prices

What is true of Regulation A offerings?

Filed with SEC is required, Limited partnerships can use them, it is limited to $5,000,000 in any 12 month period, and the securities issues are NEVER restricted

SEC Rule 144A permits the resale of non registered securities to all of the following EXCEPT:

Individuals

What do Blue Sky laws involve?

Laws that are specific to each state

All of the following are exempt securities under the Securities Act of 1933 EXCEPT

New issues of corporate stock

According to SEC Rule 147 on Intrastate Offerings, which of the following are true?

Purchasers must be residents 80% of each year to qualify and re-sales may be made to non-residents only after nine months from the date of the last sale by the issuer.

Which of the following offering is considered to be "Short Form Registration"?

Regulation A

The rules for regulating insider activity are established by the:

Securities Exchange Act of 1934

An investor owns 15% of the outstanding shares of ABC Corporation. The investor's spouse owns 5% of the outstanding shares of the same corporation. The spouse wants to sell the holdings. Which statements are true?

The spouse is considered an affiliated person under Rule 144 and the spouse must file a Form 144 to sell the shares

The SEC directly regulates all of the following EXCEPT

Treasury Securities