A) He will be able to do so only if he can establish that the purchasers would have had reasonable grounds to question the registration statement had they reviewed it with due diligence.
B) He will be able to do so only if he can establish that the purchasers would have had reasonable grounds to question the prospectus had they reviewed it with due diligence.
C) He will be able to do so if he can establish that the purchasers would have had reasonable grounds to question either the registration statement or the prospectus had they reviewed them with due diligence.
D) He will not be able to use that defense unless he can establish that he reviewed the registration statement and the prospectus, and had reasonable grounds to believe that the registration statement was accurate with no omission of material facts.
E) He will not be able to rely on that defense because he is an issuer.
G) A) and E)
Correct Answer
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Correct Answer
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A) Limited offers, intrastate issues, and resales of securities are all exempt transactions.
B) Intrastate issues and limited offers are exempt transactions, but resales of securities are not.
C) Resales of securities and intrastate issues are exempt transactions, but limited offers are not.
D) Limited offers and resales of securities are exempt transactions, but intrastate issues are not.
E) Limited offers are exempt transactions, but intrastate issues and resales of securities are not.
G) B) and C)
Correct Answer
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Correct Answer
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A) Rafal is correct because there are no criminal penalties for violating the 1933 act.
B) Rafal is incorrect because the SEC criminally prosecutes some violators although the action would only be a misdemeanor.
C) Rafal is correct in that the SEC itself would not send Isaiah to prison, but the SEC could recommend criminal action to the Department of Justice resulting in imprisonment for up to five years for a violation.
D) Rafal is incorrect because the SEC criminally prosecutes some violators, and a violation of the act is considered a felony.
E) Rafal is correct in that the SEC itself would not send Isaiah to prison, but the SEC could recommend criminal action to the Federal Bureau of Investigation resulting in imprisonment for up to ten years for a violation.
G) A) and D)
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Correct Answer
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A) She was not convicted of insider trading and sentenced to prison.
B) After a jury trial she was found innocent of insider trading and did not go to prison for anything.
C) She was not convicted of insider trading, but she went to prison for convictions relating to statements made to SEC investigators.
D) She pled guilty to lesser offenses on all counts, paid a large fine, and all charges were dismissed.
E) Charges were dismissed after she agreed to repurchase all shares of stock.
G) A) and C)
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Correct Answer
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A) Temperament advertisement
B) special offering
C) unsolicited offering
D) approved offering
E) tombstone advertisement
G) B) and E)
Correct Answer
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Correct Answer
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A) Short-swing profits
B) Short-term profits
C) Insider traded profits
D) Profiteering profits
E) Contemplated profits
G) B) and E)
Correct Answer
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Correct Answer
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