LSB 3213 - 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
Agency Law
The body of laws that govern the relationships created when one party hires another party to act on the hiring parties behalf.
Protected Classes
The classifications of individuals that are specified in Title VII, including color, race, national origin, religion, gender, and pregnancy.
And injured worker is not entitled to workers compensation if the injury was intentionally self-inflicted or resulted from certain behavior except:
The employees track record of attendance
Which of the following is true regarding equity instruments?
They represent ownership interests.
Approximately what percentage of American workers are professionally licensed?
Twenty-nine (29) percent
The underlying premise of all securities regulation is __________.
disclosure
A common form of agency is a(n) __________ relationship.
employer-employee
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 illnesses.
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 through __________ or __________.
express acts; operation of law
Intermediaries
financial institutions that provide services for investors and issuers related to securities transaction
A __________ is a highly regulated institution in which people and firms trade such things as securities, commodities, and domestic and foreign currencies at prices that reflect supply and demand as well as publicly- and privately-available information.
financial market
The Equal Employment Opportunity Commission is a __________-member commission whose members are appointed by the __________ with the approval of the __________.
five; U.S. president; U.S. Senate
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
There are two (2) distinct theories of recovery under the Family and Medical Leave Act (FMLA): __________ theory and __________ theory.
interference/entitlement; retaliation/discrimination
Financial institutions that provide services for investors and issuers related to securities transactions are known as __________.
intermediaries
Institutions and entities that sell securities to investors are known as __________.
issuers
Parties that sell securities to investors are known as __________.
issuers
If Juan hires ABC Painting, Inc. (ABC) to paint his house, but the house is destroyed by a fire sparked by a lightning strike before ABC begins to paint, the agency relationship between Juan and ABC is terminated by __________.
operation of law
In the __________ theory of sexual harassment, the harasser demands sexual favors as a condition of continued employment or as a prerequisite for a promotion or a pay raise.
quid pro quo
Pursuant to Dodd-Frank, if the Securities and Exchange Commission (SEC) is successful in an enforcement action, the whistleblower reward __________.
ranges from ten (10) to thirty (30) percent of the recovery
Much of agency law exists on the __________ statutory level and is based on the __________.
state; Restatement (Third) of Agency
General Motors Company (GM) is an American multinational corporation headquartered in Detroit, Michigan that designs, manufactures, markets, and distributes vehicles and vehicle parts. The company has approximately 173,000 employees, and in 2018, it generated approximately $147 billion in revenue. If GM should fail as a company, its demise would shake the United States automobile industry to its foundation, with corresponding "ripple effects" across the entire economy. The possibility of GM failing is known as a(n) __________ risk.
systemic
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
Through the Dodd-Frank Wall 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
A __________ is a person who reports illegal conduct committed by employees, directors, and executives of a company.
whistleblower
Which of the following is true regarding the formalities required to create an agency relationship?
A minority of states have a statutory equal dignity rule that sets out formalities for certain principal-agent transactions.
Disability
A physical or mental impairment that substantially limits a persons ability to participate in major life activities
Bona Fide Occupational Qualification (BFOQ)
A provision in certain federal anti-discrimination statutes that allows discrimination based on religion, gender, or national origin when it can be shown that such discrimination is reasonably necessary to the business operation
Pension
A retirement benefit in which the employer promises to pay a monthly some to employees who retire from the company after a certain number of years of service. The amount is ordinarily based on the length of service and the employees final salary rate.
Tax-Deferred Retirement Savings Account
A retirement savings plan in which the employee commits to saving a certain percentage of base pay in an account that is controlled directly by the employee. The funds grow tax-free until they are withdrawn.
Restatement (Third) of Agency
A set of principles, issued by the American Law Institute, intended to clarify the prevailing opinion of how the law of agency stands.
Right to work law
A state law prohibiting employers from requiring the employees join a union to continue working in that nonunion employees contribute to certain union costs such as the cost related to collective bargaining
Say-on-pay
A vote by shareholders of a company approving or rejecting the compensation of the companies executives.
Election
A vote by the entire bargaining unit to except or reject unionization
Reasonable accommodations
Accommodations, required under the Americans with disability act, that allow disabled individuals to adequately perform essential job functions
Manifest
Apparent and evident to the senses. In the context of agency law, courts apply an objective standard to determine whether the principle intended that an agency be created
Picketing
Are unions patrolling alongside the premises of a business to organize the workers, to gain recognition as a bargaining agent, or to publicize a labor dispute with the owner or whomever the owner deals with
What are two prevalent forms of equity instruments issued by corporations?
Common stock and preferred stock
Takeaway Concept 1:
Congress enacted the Dodd Frank Wall Street reform and consumer protection act in 2010
What occurs when an agent agrees to act for the principal?
Consent
Takeaway Concept 3:
Dodd Frank create a bounty plan to incentivize whistle blowing
Takeaway Concept 2:
Dodd Frank made sweeping reforms to the financial regulatory system, including expanded SEC enforcement powers, the creation of a new financial stability oversight council, and mandated but non-binding say on pay votes by shareholders
Non-exempt employees
Employees who are protected by the FLSA and the other statutes
A common form of agency is a(n) ____________ relationship.
Employer-employee
Takeaway Concept 6:
Employers have vicarious liability for sexual-harassment by their employees if they are negligent and either discovering the conduct or in failing to respond to a sexual harassment complaint me to a supervisor
Dodd-Frank Wall Street Reform and Consumer Protection Act
Federal legislation designed To overhaul the regulation of public companies and US financial services in markets. A law enacted in 2010, commonly referred to as Dodd Frank, that made sweeping reforms to the financial regulatory system, including expanded SEC enforcement powers, the creation of a new financial stability oversight counsel, and then you bounty plan for whistle blowers.
A ___________ is a highly regulated institution in which people and firms trade such things as securities, commodities, and domestic and foreign currencies at prices that reflect supply and demand as well as publicly and privately available information.
Financial Market
The equal employment opportunity commission is a__________-__________ with the approval of the__________.
Five; US President; US Senate
Takeaway Concept 8:
If no employment action was taken, and employer may avoid liability by proving that a deterrent and corrections system was in place and that the employee did not take advantage of the benefits provided by the system
Takeaway Concept 7:
If the harasser is a supervisor who has the power to hire, fire, demo, promote, transfer, or discipline the employee, and the harassment culminates in a tangible employment action, the employer is strictly liable
Grievance
In labor law, a complaint filed with or by a union to challenging employers treatment of one or more union members
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
Consent
Indigenous agreeing to act for the principal, in the context of agency like, "supplying objective standard to determine whether the agent did in fact agree to the agency relationship.
Investors
Individuals or entities seeking a return from their investment based on the perceived value of the security.
The FLS a cannot be properly understood without reference to two major historical events that occurred during the earlier part of the 20th century:
Industrial revolution and the great depression
Issuers
Institutions and entities that sell issued securities to investors
Which of the following is true regarding the risk capital test?
It analyzes whether an investment opportunity falls under the purview of a state's blue-sky laws.
Which of the following is true regarding the substantial younger standard in the age discrimination in employment act (ADEA)
It is a relevant whether the younger employee is a member of the protected class or not.
Which of the following is true regarding the "substantially younger" standard and the Age Discrimination in Employment Act (ADEA)?
It is irrelevant whether the younger employee is a member of the protected class or not.
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 exam he asked Doug to pick up his laundry as a favor for him when it was done, and Doug agreed to do so. In this case, Doug is__________
Jeff's gratuitious agent
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
Portal-to-Portal Act
Legislation that provides guidelines for what constitutes compensable work under the FLS a wage in our requirements
Which of the following is true regarding professional licensing in the American workplace?
Licensing requirements for professions vary from state to state.
What is a crucial aspect of securities that are traded in secondary markets?
Liquidity
What is a crucial aspect of securities that are treated in secondary markets?
Liquidity
The Social Security act (SSA) of 1935 provides workers a broadside of benefits that are funded by __________ Employment taxes paid by both the employer and employee into a trust fund and administered by the federal government
Mandatory
Expiration
Method of ending an agency relationship were by the parties agree to a fixed term for the relationship
Termination
Method of ending an agency relationship where by either the principal (revocation) or the agent (renunciation) simply communicates the desire to dissolve the relationship
Operation of Law
Method whereby an agency relationship is terminated as provided for in a statute or through certain common law doctrines covering the destruction of essential subject matter, death, bankruptcy, or lack of requisite mental capacity.
To determine whether the parties have in fact manifested an offer of agency and acceptance by the agent, courts apply a(n) ___________ standard
Objective
gratuitious agent
One of three broad categories of agents; generally, anyone who acts on behalf of a principal without receiving any compensation.
Employee Agents
One of three broad categories of agents; includes, generally, anyone who performs services for a principal who can control what will be done and how it will be done.
Agent
One who agrees to act and is authorized to act on behalf of another, a principal, to legally find the principal in particular business transactions with third parties pursuant to an agency relationship.
If juan hires ABC painting Inc. to paint his house, but the house is destroyed by fire sparked by lightning strike before ABC begins to paint, the agency relationship between Juan and ABC is terminated by__________
Operational Law
How do you state antidiscrimination statutes differ from federal anti-discrimination laws?
Some states have expanded protected class membership to discrimination based on sexual orientation or gender transformation
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.
Primary Market
A financial market in which firms also called issuers, raises capital by selling securities to investors
Authorization cards
Signed statements by employees indicating that they wish to unionize and/or are electing to be represented by an existing union
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)
Equal Employment Opportunity Commission (EEOC)
A five member federal administrative agency that administers congressional mandates that ensure adequate protection for victims of discrimination; excepts and investigates worker complaint; and, in certain cases, will sue on behalf of employees
Maurice is a nonexempt employee with a salary of $400 a week based on a 40 hour week. If he works 50 hours in a particular week, his paychecks should be for
$550
Complain
A form that an aggrieved employee files against his employer with the EEOC that details how the employee was discriminated against
Overtime Compensation
A higher rate of pay for the hours that nonexempt employees work in excess of 40 hours in one seven-day workweek; calculated at one and one-half times the employee's hourly base rate.
Financial Market
A highly regulated institution in which people and firms trade securities, commodities, and currencies at prices that reflect supply and demand as well as publicly and privately available information
Which of the following is an example of an employer-provided, tax-deferred retirement savings account?
A 401(k) plan
Which of the following is a classic example of systemic risk?
A bank run
Strike
A concerted and sustained refusal by workers to perform some or all of the services for which they were hired in order to induce the employer to concede certain contract terms during collective bargaining or to engage in fair labor practices
Business Necessity
A defense used to rebut disparate impact claims when a business can prove that a certain skill, ability, or procedure is absolutely necessary to the operation of the business. Discrimination is permitted even if a protected class is adversely affected
Federal Unemployment Tax Act (FUTA)
A federal law enacted in 1935 that established a state administered fund to provide payments to workers who have suffered sudden job loss; funded through employment taxes shared by employer and employee
Fair Labor Standards Act (FLSA)
A federal law enacted in 1938 and intended to cover all employers engaged in interstate commerce; mandates payments of a minimum wage, a maximum 40 hour work week, overtime pay, and restrictions on children working in certain occupations and during certain hours
Labor management reporting and disclosure act
A federal law enacted in 1959 that established a system of reporting and checks intended to uncover and prevent fraud and corruption among union officials by regulating internal operating procedures and union matters. Also known as Landrum-Griffin Act.
Employee Retirement Income Security Act (ERISA)
A federal law enacted in 1974 consisting of a comprehensive set of laws and regulations that requires employers to make certain disclosures related to investment risk, is that providing transparency for plan beneficiaries
Electronic Communications Privacy Act (ECPA)
A federal law enacted in 1986 that extends legal protection against wiretapping and other forms of unauthorized interception and explicitly allows employers to monitor employee communications on company equipment as long as this is done in the ordinary course of business or the employee consents to the monitoring.
Family and Medical Leave Act (FMLA)
A federal law enacted in 1993 that requires certain employers to give time off to employees to take care of their own or a family member's illness or to care for a newborn or adopted child
Social Security Act (SSA) of 1935
A federal law providing a broad set of benefits for workers, including a retirement income; funded by mandatory employment taxes paid into a trust fund by both employer and employee and administered by the federal government.
Employee Polygraph Protection Act
A federal law that prohibits most private sector employers from requiring a polygraph test as a condition of employment
Labor-management relations act
A federal law, enacted in 1947 as an amendment to the NLRA, that prohibits requiring employees to join or continue membership in a union as a condition of employment. Also known as Taft-Hartley Act.
Equal Pay Act of 1963
A federal statute that makes it illegal for employers to pay on equal wages to men and women who performs substantially equal work
Age Discrimination in Employment Act (ADEA) of 1967
A federal statute that prohibits employers from discriminating against employees on the basis of their age once employees have reached age 40.
Americans with Disabilities Act of 1990
A federal statute that seeks to illuminate discriminatory employment practices against disabled persons; requires that employers with 15 or more employees make reasonable accommodation for a disabled employee in the workplace as long as the accommodations do not cause the employee to suffer an undue hardship
Express Acts
Acts by which an agency relationship is terminated; can be either simple communication of the desire to terminate the relationship, the expiration of a fixed term, or satisfaction of purpose
Takeaway Concept 4:
Agency transactions are common and essential in the business environment and exist in a variety of forms (e.g., an employer-employee relationship)
Affirmative Action
An action plan designed to maintain equal employment opportunities into remedy as employment discrimination against women, persons of color, persons with disabilities, and other underutilized protected classes
Takeaway Concept 5:
An agency relationship is terminated either through express acts (termination or expiration) or through operation of law (destruction of subject matter, death, bankruptcy, or mental capacity).
Principal
An agents master; the person from whom an agent has received instruction and authorization and to whose benefit the agent is expected to perform and make decisions pursuant to an agency relationship.
Collective bargaining unit
An employee group that, on the basis of a mutuality of interests, is an appropriate unit for collective bargaining.
Whistleblowers
An employee or agent who reports illegal misconduct or a statutory violation by his or her employer to the authorities
Financial Stability Oversight Council (FSOC)
An independent body with a board of regular tours to address dangerous risks to global financial markets posed by risky investments with the actions of large, interconnected financial institutions.
National Labor Relations Board (NLRB)
And independent federal agency created by the NLR a in charged with administering, implementing, and enforcing anLR a provisions, as well as monitoring union elections for fraud and setting guidelines for employers and unions in regard to fair labor practices
Exempt Employees
Classification of employees who are not covered by FLS a protections; generally consist of employees whose responsibilities are primarily executive, administrative, or professional.
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
Pretext
He falls reason offered to justify in action
Occupational Safety and Health Act (OSHA)
He federal law enacted in 1970 that sets forth workplace rules and regulations to promote the safety of workers and prevent workplace injuries
National Labor Relations Act (NLRA)
Hey federal law enacted in 1935 that provides general protection for the rights of workers to organize, engage in collective bargaining, and take part in strikes in other forms of concerted activity in support of their demands. Also known as the Wagner act.
Secondary Market
Hey financial market in which investors sell to other investors with the goal of making a profit or preventing a goal
Issuing securities to the public markets for the first time is known as an __________.
IPO
Takeaway Concept 1:
Primary and secondary capital markets function through the international three parties: investors, issuers, and intermediaries
In addition to comply with federal anti-discrimination statutes, certain employers are also subject to regulation under a(n)__________scheme.
State anti-discrimination statutory
Workers Compensation
State statutes that provide an employee who is injured in the course of employment with a partial payment in exchange for mandatory relinquishment of the employees right to sue the employer for the tort of negligence; funded through employer paid insurance policies
ABC Test
Statutory standard used by many states to determine agency status.
General motors company is an American multinational corporation headquartered in Detroit Michigan that designs, manufactures, markets, and distributes vehicles and vehicle parts. The company has approximately 173,000 employees, and in 2018, it generated approximately $147 billion in revenue. If GM should fail as a company, its demise would shake the United States auto mobile industry to its foundation, with corresponding ripple effects across the entire economy. The possibility of GM failing is known as a(n) ___________ risk.
Systemic
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
Securities and Exchange Commission (SEC)
The independent federal administrative agency charged with rulemaking, enforcement, and adjudication of federal security laws.
Systemic Risk
The possibility that an event at a single firm could trigger severe instability in the entire financial market where the collapse of an entire industry or economy
Which capital market consist of firms raising capital by selling securities in public markets or in private placements?
The primary market
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.
Collective bargaining
The process of negotiating terms and conditions of employment for employees in the collective bargaining unit
Conciliation negotiations
The required attempts by the EEOC to settle a discrimination case instead of filing a lawsuit.
Burden of Proof
The responsibility of producing sufficient evidence in support of a fact or issue in favorably convincing the factfinder of that factor issue
Which capital market involves the trading of already-issued securities?
The secondary market
Title VII of the 1964 Civil Rights Act
The section of the civil rights act of 1964 that serves as the centerpiece of anti-discrimination law; covers a comprehensive set of job related transaction and prohibits discrimination in the workplace on the basis of an employees race color or national origin gender religion or pregnancy. The law applies to any private sector employer with 15 or more full-time employees and two unions, employment agency, state and local governments, and most of the federal government.
Disparate Impact
Theory of employment discrimination in which employee evaluation techniques that are not themselves discriminatory have a different and adverse impact on members of a protected class
Mixed Motives
Theory of employment discrimination in which the cause of the adverse employment action was motivated by both legitimate and discriminatory motives.
Disparate Treatment
Theory of employment discrimination predicated on overt and international discrimination; includes being treated differently because of one's membership in a protected class
hostile work environment
Theory of liability under title VII for sexual-harassment that is of such a severe and crude nature or is so pervasive in the workplace that it interferes with the victims ability to do the job
Quid Pro Quo Theory
Theory of sexual harassment whereby harasser demand sexual favors as a condition of continued employment or as a prerequisite for a promotion or pay raise.
Which of the following laws represents the centerpiece of anti-discrimination statutes?
Title VII of the Civil Rights Act
Takeaway Concept 6:
To obtain a license, one typically must apply in the office of business regulation of any state in which the work will be performed
Independent Contractor
What are three broad categories of agents; generally, anyone who performs services for principal if the principal has the right to control or direct only the result of the work and not the means and methods of accomplishing the result.
A ___________ is a person who reports illegal conduct committed by employees, directors, and executives of a company
Whistleblower
What laws compensate employees with a job related injuries or illnesses which are paid based on a percentage of the employees salary at the time of the occurrence?
Workers compensation
Employment discrimination
Workplace related discrimination in the hiring process and treatment of employees; encompasses everything from promotion and demotion to work schedules, working conditions, and disciplinary measures
Fundamentally, the Dodd-Frank whistleblower provisions are based on __________.
a bounty plan
Brokerage firms are also referred to as __________.
broker-dealers
Most commonly, intermediaries are __________.
brokerage firms
The term "financial markets" is most often used to refer to __________ markets, which in turn consist of __________ markets as well as __________ markets.
capital; stock; bond
