Chapter 8 Part 1 Flashcards

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1
Q

if a regulation is violated, the four basic tools used to enforce the Uniform Securities Act are

A
  1. Orders by the Administrator 2. Actions against registration 3. Civil actions 4. Criminal actions
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2
Q

An offer or offer to sell is

A

the attempt, or solicitation, to dispose of a security for value.

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3
Q

The term sale is considered

A

any contract or agreement to dispose of a security for value. A sale is the result of a successful offer

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4
Q

jurisdiction refers to

A

the power to interpret and apply the law or the territorial range of authority to control

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5
Q

An Administrator has jurisdiction over any offer to buy or sell a security that is

A

made or accepted in her state. An offer is made in a state if the offer is originated in, or directed to and received in, the Administrator’s state .

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6
Q

the USA does not recognize states where securities are

A

delivered or where the payment for the purchase is made

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7
Q

The USA jurisdiction rule does not recognize the state where mail is

A

forwarded

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8
Q

Though the offer was directed to Arizona, the client, Ms. Rose, never received the offer in Arizona, so

A

no offer was made in Arizona

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9
Q

The state Administrator will have jurisdiction over any offer made through a newspaper when the newspaper is published in a state, but there is an exception. lf a newspaper is published in a state and more than

A

two-thirds of its circulation is outside the publishing state, then an offer was not made in the state–no state Administrator will have jurisdiction over the offer

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10
Q

An offer in a newspaper may only be made in the state in which

A

the paper is published

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11
Q

If an offer is made using radio or television, the offer is considered lo have been made

A

only in the state in which the broadcast originates

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12
Q

US phone or mail offer

A

The state from which it oJiginated and the state to which it is directed (For mail, not the state to which it may be forwarded)

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13
Q

Any security given or delivered with, or as a bonus for, the purchase of a security, which is considered

A

both an offer and a sale. For example, if an investor buys a bond with a warrant attached, the warrant is a part of the sale, even though an investor did not purchase it separately

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14
Q

The sale of a warrant or right enabling the holder to subscribe to purchase another security is considered an

A

offer to sell the other security. Stated plainly, since rights and warrants are securities, a sale takes place when the warrant or right is purchased. however, warrants and rights also represent an offer to sell another security

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15
Q

The following actions do NOT involve an offer or sale

A

A bona fide pledge or loan of stock; An exchange of securities due to a merger, reorganization, or bankruptcy; A stock dividend, if the stockholders do not provide anything of value in return

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16
Q

Ordinarily, a gift of anything does not involve a

A

sale

17
Q

Remember, the term sale is considered any contract or agreement to

A

dispose of a security for value. If a security is given as a gift, the recipient receives it without an exchange in value–no payment is required

18
Q

However, a gift of assessable securities would involve

A

an offer and a sale

19
Q

Assessable stock is a class of stock in which

A

the issuing company is allowed to demand additional funds from existing stockholders

20
Q

individuals could give gifts of assessable stock without disclosing that additional capital, an assessment, was required to maintain ownership. The Uniform Securities Act

A

made this practice illegal