BUS320 Worksheet 19.3: State Securities Laws

Congress passed the Sarbanes-Oxley Act in _____________.

2002

Stock Option

A certificate that grants the owner the option to buy a given number of shares of stock at a prespecified price, usually within a set time period.

The __________ Committee of the board of directors oversees the corporation's accounting and financial reporting processes, including the corporation's internal controls.

Audit

The _______________ Committee of the board of directors assesses performance and designs a system that better aligns the officers' interests with that of the shareholders

Compensation

In order to improve corporate governance, most large corporations have eliminated the use of outside directors.

False

State securities laws generally do not provide for the registration of securities offered or issued because that is governed by federal law.

False

Corporate Governance

Specifies the rights and responsibilities among different corporate participants and spells out the rules and procedures for making decisions on corporate affairs

____________ law corporation statutes set up the legal framework for corporate governance.

State

An important structure in corporate governance is the board of directors, because the board makes major decisions about the future of the corporation.

True

Sections 302 and 404 of the Sarbanes-Oxley Act require high-level managers and many senior officers to establish and maintain an effective system of internal controls.

True

Today, every state has its own corporate securities laws that regulate the offer and sale of securities within its borders.

True

Blue sky laws are:

state laws regulating intrastate sales of securities.