LSB quiz 4

Which legislation created the Securities and Exchange Commission (SEC)?

The Securities Exchange Act of 1934

An injured worker is not entitled to workers' compensation if the injury was intentionally self-inflicted or resulted from certain behavior except:

The employee's tack record of attendance

Which of the following is true regarding equity instruments?

They represent ownership interests.

What company agreed to settle a class action lawsuit by paying approximately $100 million to roughly 385,000 drivers where drivers were claiming that they were actually employees under the California Labor Code and they should receive worker protections and benefits under California law?

Uber

A company is said to "go public" when it sells its voting __________ shares for the first time to outside investors through use of public markets such as the New York Stock Exchange (NYSE).

common

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

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

Agency is described as a __________ relationship that results when a principal manifests consent to an agent to act on the principal's behalf subject to the principal's control.

fiduciary

While substantial portions of the Sarbanes-Oxley Act are aimed at solving specific mechanism failures in auditing and other accounting procedures, the law also imposes higher levels of __________ responsibility for those involved in corporate governance.

fiduciary

Under the Howey test, there are __________ criteria used to determine whether something qualifies as a security.

four

Generally, the Troubled Assets Relief Program (TARP) required loan recipients to __________.

impose restrictions on compensation of officers; form an independent compensation committee; and give shareholders more say regarding the compensation of officers and directors

What caused a stunning reversal and ordered retrial by the U.S. Supreme Court in Arthur Andersen LLP v. United States, of Andersen's conviction in 2005?

improper jury instructions

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

The Fair Labor Standards Act was originally intended to cover employers engaged in _______.

interstate commerce only

Securities statutes use a catchall definition of other __________ transactions in a more generic sense, including participation in profit-sharing agreements; collateral trust certificates; pre-organization certificates or subscriptions; investment contracts; and a fractional, undivided interest in gas, oil, or other mineral rights.

investment

Parties that sell securities to investors are known as __________.

issuers

The first time sale of voting common share to outside investors is made through the use of a __________ registration statement that discloses important facts about the offering to potential investors.

mandatory

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

An agency transaction ends when the agency is terminated by the __________.

parties

If an employer does offer retirement benefits, they are typically offered in the form of a __________ or through a tax-deferred retirement savings account such as a 401(k) plan.

pension

In a __________ plan, the employer promises to pay a monthly sum to employees who retire from the company after a certain number of years of service.

pension

In the __________ market for securities transactions, issuers raise capital by selling securities in public markets or in private placements.

primary

Security transactions involving the original issuance and reissuance of securities by a business to raise capital are called the

primary market

On a bond, the face amount is also called the __________.

principal

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 is called the __________.

principal

To create an agency relationship, a/an __________ first must manifest some offer to form an agency.

principal

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

Termination by the principal is known as __________. When the agent initiates the termination, it is known as __________.

revocation; renunciation

The consequences of a business owner or manager misclassifying an employee may be __________.

severe

Agency law primarily exists on the

state level

Much of agency law exists on the __________ statutory level and is based on the __________.

state; Restatement (Third) of Agency

Violators of the SOX Act are __________.

subject to both civil penalties and criminal prosecution

Fundamentally, an agency transaction involves creation of agency, performance of obligations and duties, and ______.

termination of agency

Agency law generally exists on the state statutory level and is based on: _______.

the Restatement (Third) of Agency

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

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

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-nine (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

Investors seek a return from their investment based on the __________ of the security.

value

Which of the following is not covered under the Fair Labor Standards Act?

working conditions

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

Many states have adopted the __________ in their agency law as a standard for determining agency status.

ABC Test

The SOX Act was intended to impose stricter regulation and controls on how corporations do business through regulation of which of the following three (3) areas?

Auditing; financial reporting; and internal corporate governance

The Sarbanes-Oxley Act seeks to increase _______ independence.

Auditor

A company is said to "go public" when it sells its voting ____ shares for the first time to outside investors through use of public markets such as the New York Stock Exchange (NYSE).

Common

What are two prevalent forms of equity instruments issued by corporations?

Common stock and preferred stock

The public outcry over the Enron scandal and waning public confidence in the oversight of financial frauds in the market led ________ to pass several laws to improve the quality of financial disclosure by public corporations.

Congress

The public outcry over the Enron scandal and waning public confidence in the oversight of financial frauds in the market led __________ to pass several laws to improve the quality of financial disclosure by public corporations.

Congress

What occurs when an agent agrees to act for the principal?

Consent

Of the high-profile corporate scandals that erupted at major public companies in 2000 and 2001, the one at __________ is perhaps the most notorious.

Enron

Of the high-profile corporate scandals that erupted at major public companies in 2000 and 2001, which of the following is arguably the most notorious?

Enron

One of the most important aspects of New Deal legislation was the enactment of various employment laws, one of which was the __________.

Fair Labor Standards Act (FLSA)

________ investors hold securities directly or through a brokerage firm and ________ investors hold securities through pension funds and mutual funds.

Individual, institutional

The FLSA cannot be properly understood without reference to two major historical events that occurred during the earlier parts of the twentieth century:

Industrial Revolution and the Great Depression

The most common type of ________ are brokerage firms, referred to as broker-dealers, that buy and sell securities on behalf of a client.

Intermediaries

The most common type of __________ are brokerage firms, referred to as broker-dealers, that buy and sell securities on behalf of a client.

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 opportunity 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 Jamie calls her stockbroker at Big Money Brokers and finds out that NewCo is raising capital by selling its stock to the public. She believes the stock is priced low and that she will make a profit in the future, so she orders her broker to purchase 3,000 shares. In that case, who is the investor?

Jamie

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 is done, and Doug agreed 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 from state to state.

To determine whether the parties have in fact manifested an offer of agency and acceptance by the agent, courts apply a(n) _______ standard.

Objective

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.

A public outcry and a growing lack of investor confidence in corporate financial disclosures caused Congress to overhaul the entire corporate governance regulatory structure by passing the:

The Sarbanes-Oxley Act of 2002

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)

Under the Health Care and Education Reconciliation Act, employers offering high-end health care policies in 2018 will be required to pay additional taxes to help fund the Act's plan. A high-end health care policy is defined as one costing more than _______.

$27,500 per year

Morris 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 paycheck should be for _________

$550

After a meteoric rise to the top, Enron's shareholders lost about __________ billion over a two-year period. Employees, believing in Enron's vision and leadership, had filled their retirement portfolios with Enron stock, only to have their savings wiped out when the company sank into bankruptcy.

$62 billion

What independent regulatory body was created to provide financial stability after the financial crisis of 2008?

*****incorrect------The Consumer Financial Protection Bureau (CFPB)

In 2012, what was the percentage of American wage and salary workers who were members of a union?

11.3

The Fair Labor Standards Act imposes restrictions on hiring workers under ______.

18 years old

The federal laws, regulations, and exemptions governing the primary market are found in the Securities Act of ____?

1933

The federal laws, regulations, and exemptions governing the primary market are found in the Securities Act of __________.

1933

The secondary market is largely regulated through the Securities Exchange Act of __________.

1934

The Industrial Revolution is described as the time period during the __________ centuries that saw great advances in science and technology.

19th and 20th

Under Sarbanes-Oxley, requiring the payback of corporate bonuses that were awarded and later found to be based on false disclosures is called a __________ provision.

clawback

Which of the following is an example of an employer-provided, tax-deferred retirement savings account?

A 401(k) plan

The Sarbanes-Oxley Act was intended to impose stricter regulation and controls on how corporations do business through regulation of:

All of the choices are correct. financial reporting auditing internal corporate governance

Under Sarbanes-Oxley, requiring the payback of corporate bonuses that were awarded and later found to be based on false disclosure is called a _______ provision.

Clawback

What is the process of negotiating an agreement on behalf of an entire workforce as opposed to individuals negotiating privately on their own behalf?

Collective bargaining

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

Protection of employee medical information is addressed by the _______.

Health Insurance Portability and Accountability Act. (HIPAA)

Issuing securities to the public markets for the first time is known as an __________.

IPO

Security transactions involving the original issuance and reissuance of securities by a business to raise capital are called the ________.

Primary market

In the wake of multiple corporate fraud and 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-Oxley Act of 2002

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

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 through courts and labor boards.

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.

The Troubled Assets Relief Program (TARP) provisions empowered the Department of the __________ to recover any bonuses paid that were inconsistent with the law's requirements.

Treasury

The loan program created by the American Recovery and Reinvestment Act of 2009, established the _______ to administer the loans.

Troubled Assets Relief Program (TARP)

Which of the following is not a factor considered when classifying an employee as covered or exempt?

Whether the employee uses the employer's tools or his or her own

The IRS has developed a three-prong test to determine an agent's status. Which of the following is not a prong in this test?

Whether the working relationship is written or oral. IRS Test based off 3 things 1.) Behavioral aspects of the agency. 2.) The type of working relationship between the principal and the agent. 3.) The financial arrangements between the principal and the agent.

What laws compensate employees with job-related injuries or illnesses which are paid based on a percentage of the employee's salary at the time of the occurrence?

Workers' compensation

Fundamentally, the Dodd-Frank whistleblower provisions are based on __________.

a bounty plan

One who agrees to act and is authorized to act on behalf of another, a principal, to legally bind the principal in particular business transactions with third parties pursuant to an agency relationship is the __________.

agent

Through the Dodd-Frank Wall Street Reform and Consumer Protection Act, also known simply as Dodd-Frank, Congress imposed tighter restrictions on:

all of the choices are correct conduct of firms engaging in risky investment transactions financial markets public corporations