Ch.19 Securities & Corp. Governance

Question 1

The Sarbanes-Oxley Act addresses corporate governance by:

Accepted Answer

Requires CEOs to take responsibility for accuracy of financial reports, Creates Public Co. Accounting Oversight Board to oversee accounting indus., Strict disclosure requirements & harsh penalties for securities violations, Establishes private lawsuits for securities fraud & expands SEC’s remedies

Question 2

The Securities Exchange Act regulates secondary financial markets to ensure transparency for investors at any time.

Accepted Answer

True

Question 3

State securities laws, aka blue-sky laws, are preempted by the Securities Act and Secs. Exch. Act.

Accepted Answer

False

Question 4

The Sarbanes-Oxley Act also:

Accepted Answer

Bans company loans to executives, Gives job protection to whistleblowers, Strengthens independence and financial literacy of corporate boards, Holds CEOs personally responsible for accounting audit errors

Question 5

The Securities Act regulates the sale of securities as part of an initial public offering.

Accepted Answer

True

Question 6

Remedies for violation of the Securities Act include:

Accepted Answer

Injunctions, Civil penalties, Cease and Desist Orders, Barring officers and directors who violated anti-fraud provisions

Question 7

The Securities Exchange Act requires registration of exchanges, brokers, dealers, and national associations if:

Accepted Answer

Assets > $10 million and have ≥ 500 shareholders

Question 8

A Securities-Act-related registration statement's false or omitted material fact subjects the issuer to civil liability.

Accepted Answer

True

Question 9

A(n) ___ is the basic selling document of a security offering registered under the Securities Act.

Accepted Answer

Prospectus

Question 10

Before filing a Securities-Act-related registration statement, the issuer can offer or sell the subject securities.

Accepted Answer

False

Question 11

Under Reg. 10b-5, false statements in SEC-filed documents causes liability even if secs. not registered under Sec. Act.

Accepted Answer

True

Ch.19 Securities & Corp. Governance

Questions 11

Ch.19 Securities & Corp. Governance

Questions 11