federal securities regulation

Question 1

defenses under sect 18 securities act of 1934 for false or misleading statements

Answer 1

good faith and lack of knowledge

Question 2

dodd frank act created

Answer 2

financial stability oversight counsel and consumer financial protection bureau

Question 3

can foreign companies use crowdfunding exemption

Answer 3

NO and only 100,000

Question 4

Tombstone advertisement

Answer 4

filed during waiting period, restricted info such as type of security and how to acquire prospectus

Question 5

requirements of prospectus under securities act of 1933

Answer 5

part of registration statement, describes issuing corp, type of security and risks

Question 6

registration statement for no-exempt securities

Answer 6

description, how proceeds will be used, description of business and mgmt, and financial statement

Question 7

Regulation D

Answer 7

5mn in one year period to no more than 35 non-accredited investors, no limit on accredited

Question 8

rule 506 of Reg D

Answer 8

not advertised to general public, and not sold to more than 35 non- accredited investors, any kind of security, o limit on dollar values

Question 9

1933 act exemptions for intrastate registration

Answer 9

must reside in state, offered to residents of that state and 80% of funds must be used in that state, not sold to outsiders in 9 months

Question 10

rule 504 Reg D

Answer 10

1 mn or less and not an investment company and number of investors and no general advertising

Question 11

can foreign company crowdfund

Answer 11

NO

Question 12

Sect 11 of securities act

Answer 12

if any part of registration statement contains untrue material statement any person acquiring may bring civil lawsuit, plaintiff must show material misstatement, can trace shares to that statement and suffered damages. do not need to show reliance or fraud, defendant can disprove reliance and prove due diligence.

Question 13

time limits for Sect 11 suit

Answer 13

w/in one year of discovery and three years of offering date

Question 14

securities act of 1934, section 10b, rule 10b-5

Answer 14

requires intent to defraud, not required for 1933, defenses are lack of knowledge and acting in good faith, w/in 2 years of when should have discovered fraud and w/in 5 years of fraud
intentional misconduct, scienter, reliance
can rescind transaction or recover losses

Question 15

criminal provisions of 1933 and 1934 acts

Answer 15

punish “willful” violations,sec-civil charges, DOJ-criminal charges