Blaw last exam
The person who receives the proceeds from an insurance policy is the
Beneficiary
State securities statutes are known as
Blue sky laws
Peggy's credit card debts are mounting as her costs of insurance and fuel have dramatically increased and her income, from sporadic free-lance jobs, has dropped. Chapter 13 of the Bankruptcy Code will allow her to reorganize her debt while she keeps most of her assets.
False
The "tipper" of inside information can be convicted of a crime, but the "tippee" cannot
False
The 1933 act prohibits fraud only in transactions involving registered securities
False
The Securities Act of 1933 established the Securities of Exchange Commission
False
The Uniform Probate Code has been adopted in all states
False
When the underwriter buys a stock from the issuer and sells it to the public it is referred to as a
Firm commitment underwriting
Under what type of securities offering must the issuer determine if the investor is an accredited, sophisticated investor and if the stock is restricted
Regulation D offering
MegaCorp wishes to sell $25 million of securities. The only investors will be 20 unaccredited investors. Which of the following applies to this offering?
Rule 506 of Regulation D of the 1933 Act
What is the legal term meaning that someone has acted with the intent to deceive or with deliberate recklessness as to the possibility of misleading investors
Scienter
The correct order of payment of claims from the debtor's estate would be
Secured claims, Priority claims, unsecured claims
Which of the following represents a valid Regulation A Tier 1 offering
Selling $20 million of securities in any 12-month period with no individual investor limit
Section 16(b) of the 1934 Act addresses what type of insider trading
Short-swing trading
Legal requirements for a will depend on state law, but generally include all but which of the following
Signatures of at least three witnesses
Chappter 7 bankruptcy is also known as
Straight bankruptcy
Brad was having financial difficulties and thought bankruptcy might be in his future. He transferred his sports car to his brother with the agreement that if he didn't file for bankruptcy within the next 18 months, his brother would return the car to him. Brad did file for bankruptcy in ten months. The bankruptcy trustee can bring the car back into Brad's estate for the purpose of providing assets for Brad's creditors.
True
Under the federal bankruptcy code, the exemption amount for the debtor's personal residence is
$21,625
Alimony and child support obligations are considered priority claims
True
Regulation Crowdfunding permits privately held companies to sell up to $1 million in securities in any 12 month period provided they meet a member of criteria
True
Reva prepares and signs a document that she intends to be her will. If she has not followed the legal technicalities of her state regarding executing a will, the court may not enforce the will
True
Securities offered and sold entirely within one state by a corporation of that state are exempt from registration
True
The 1934 Act requires companies with a class of stock that is publicly traded to make ongoing, regular disclosure with the SEC
True
The SEC has enforcement powers, including the power to issue cease and desist orders, to levy fines, and to confiscate profits from illegal transactions
True
To recover for an alleged violation of SEC Rule 10b-5, a plaintiff is required to prove reliance on a misstatement or omission relative to the purchase of the security
True
Typically, exemptions under the 1933 Act are based on either the type of security or the type of transaction
True
Ramona has received a discharge in bankruptcy, but wants to reaffirm a debt to her sister. To be valid, the reaffirmation:
Will be scrutinized by the court to make sure her sister has not unfairly pressured Ramona
Pamela applies for a life insurance policy with Forever Young Insurance Company. When completing the application form about past surgeries, Pamela forgot a past outpatient surgery when she had an infected hang-nail removed and her toe treated. One year after issuing the policy, Pamela died suddenly from a brain aneurysm. Forever Young denies payment under the policy based on misrepresentation. If Pamela's sister, Paula, sues Forever Young she will most likely
Win, because Pamela's misrepresentation was not a material fact and did not increase Forever Young's risk in insuring Pamela's life
Which of the following is NOT required to create a valid trust
Witnesses
Which of the following is true about wills
A will can be amended to change specific terms by execution of a codicil
under Regulation D, institutions such as banks, and insurance companies are considered to be what type of investors
Accredited
Which is an example of priority claim
All of these arecorrect
Under the Uniform Anatomical Gift Act
An effective donation may be made by an individual in a will or on a witnessed organ-donation card or by family members after the person's death as long as the person did not indicate a desire not to be a donor
Abraham has just purchased his first car. His bank, First State Bank, loaned him the money to buy the car and has required him to purchase insurance to protect the car as the collateral for the loan. Which basic types of coverage should Abraham buy to satisfy the bank requirement and to best protect himself from the risks of operating an automobile
Collision, uninsured motorist, Comprehensive, and liability coverage
Which type of automobile insurance covers the cost of damage caused by fire, theft, or vandalism
Comprehensive insurance
Which of the following does NOT act as a revocation of a will
Creating a codicil
Identify four ways a trust can be terminated
Date indicated by grantor After 21 years if perpetual Purpose has been fulfilled If the grantor and all beneficiaries decide to revoke it
When a debtor no longer has an obligation to pay a debt, that debt has been
Discharged
Iris received a discharge under a Chapter 7 bankruptcy. She cannot receive another discharge under Chapter 7 for at least:
Eight years after the prior filing
If the final registration statement contains a material misstatement or omission, the purchaser of the security can recover damages from:
Everyone who signed the registration statement
The major disadvantage of a trust is
Expense
Dr. Gavornne advises his very ill patients to prepare a living will. The purpose of a living will is to
Express a desire not to have extreme medical treatment that would prolong their lives
If Walter becomes incompetent to manage his affairs
His chosen attorney-in-fact can make decisions for him if he appointed the person in a durable power of attorney with a springing power to become effective upon Walter's incompetence
The trustee can void any transfer that meets all of the following requirements:
If the pre-petitions payment was made in the ordinary course
Which of the following has the most elaborate disclosure requirments
Initial public offering
Liability policies, such as personal liability, professional malpractice, or business liability insurance do NOT protect the insured against
Intentional ham caused by the insured
In order to travel extensively and not worry about handling her affairs, Lee transfer most of her assets into a trust, with her bank serving as trustee. She her created a(n) _________ trust.
Inter vivos
Forever Yours, Inc. has a secured and perfected security interest in Sally's big-screen TV. On the filing date of Sally's Chapter 7 petition, the balance of the debt owed to Forever Yours is $2,000. The value of the TV is estimated at $1,500. This means that Forever Yours:
Is unsecured for $500, the excess of the debt over the value of the TV
Under the 1934 Act, an issuer must register with the SEC if:
It has at least 2,000 shareholders and total assets that exceed $10 million
Which of the following is a characteristic of a restricted security
It is purchased in a private offering
The 1934 Act is primarily intended to
Maintain the integrity of the secondary market for securities
In determining liability for errors in a registration statement, the plaintiff must prove that there was a misstatement or omission that was important enough to affect the plaintiff's investing decision. In other words, the misstatement or omission needs to be
Material
Ed, a vice-president of Palmette Products, Inc. buys 1,000 shares of his company's stock on June 15. His son has medical problems in September, and Ed sells the stock at a profit. Under Section 16, Ed
Must turn over to Palmette any profits he made on the sale.
Link negligently ran his car into John, causing $50,000 in injuries. Link was intoxicated at the time of the accident. Can Link discharge this debt in bankruptcy?
No, such claims are not dischargeable in bankruptcy
Section 16 of the 1934 Act prohibits short-swing trading on the part of officers, directors, and controlling shareholders who
Own more than 10% of the company
Traditional health plans are
Pay for service plans
A child who is left nothing under the parent's will is called a
Pretermitted child
Kathleen filed for voluntary bankruptcy and the automatic stay went into effect. The automatic stay:
Prohibits creditors from collecting debts against Kathleen that arose before she filed bankruptcy
The cheapest life insurance options is
Term insurance
Which of the following insurance policies continues for a stated period of time with the premiums increasing with the age of the insured
Term insurance
Darcy buys a life insurance policy on her own life, under which she pays the annual premiums. The insurance is issued for a specific period, but is renewable for similar periods. Darcy is covered only as long as she makes the payments. There is no cash value portion to the policy. Darcy probably owns
Term life insurance
Pursuant to a public offering, a CPA firm audited the financial statements. After the offering, omissions, and misstatements were found. The CPA firm is now being sued by the purchasers of the stock. The purchasers are alleging that the erroneous financial statements in the registration statement caused them to suffer a monetary loss. The CPA firm can avoid liability if it can prove
That it used due diligence in auditing the financial statements
Felicity brought a lawsuit under Section 11 of the 1933 Act against Mojo Corp. What will Felicity have to prove in order to prevail
That there was a material misstatement or omission in the registration statement and she lost money
A criminal case under the Securities Act of 1933 is prosecuted by:
The Justice Department
Who operates the business and develops a plan of reorganization in Chapter 11 bankruptcies?
The debtor in possession
Under Section 10(b) of the 1934 Act, all of the following would be considered a "corporate insider" EXCEPT
The janitorial company who cleans the corporate offices
What is the "gap period"
The period between the time that a creditor files for an involuntary petition and the court issues the order for relief
Which of the following is reported of Form 8-K
The resignation of a director over a policy dispute
Which of the following is a primary goal of the bankruptcy code
To preserve as much of the debtors property as possible
The 1933 Act exempts all but which of the following from its registration requirements
Treasury stock
Creditors claims are divided into classes and the highest class must be satisfied in full before going to the next category
True
Estate planning has two primary goals; to ensure property is distributed as the owner desires and to minimize estate taxes
True
Generally filing bankruptcy stops the collection activity of creditors
True
Individual debtors are allowed to keep some assets in a Chapter 7 bankruptcy.
True
A short document acknowledging receipt of an application and premiums for an insurance policy is called a(n)
binder
