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
