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Legal Enviornment Of Business > Final Exam > Flashcards

Final Exam Flashcards

1
Q

What is White-collar Crime?

A

Violations of the law by business organizations or individuals in a business-related capacity, committed to obtain money, property, or services, avoid payment, or achieve personal or business advantage.

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2
Q

How are crimes classified?

A

Crimes are classified as felonies or misdemeanors.

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3
Q

Define Felonies.

A

A criminal offense of a serious nature, generally punishable by fine and/or imprisonment in a penitentiary (imprisonment more than one year).

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4
Q

Define Misdemeanors.

A

A criminal offense of less serious nature than a felony, generally punishable by fine or jail sentence other than in a penitentiary (imprisonment less than one year).

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5
Q

What initiates felony cases?

A

Felony cases are commenced by a grand jury indictment.

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6
Q

What is an Indictment?

A

A document issued by a grand jury formally charging a person with a felony.

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7
Q

What is an Information?

A

A written accusation by the prosecutor presented in court charging an accused person with a crime.

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8
Q

What role does a grand jury play?

A

A grand jury determines if there is sufficient evidence to warrant a trial.

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9
Q

What is the role of a petit jury?

A

A petit jury determines the guilt or innocence of the accused.

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10
Q

Define Intent in criminal law.

A

A legal doctrine indicating that parties meant to do what they did.

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11
Q

What does Willfully mean?

A

When intent to defraud or deceive is present, indicating voluntary and purposeful action.

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12
Q

What is Knowingly in the context of a crime?

A

Intentionally acting with knowledge that cannot be established by negligence, but inferred from deliberate ignorance.

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13
Q

What are the three pleas a defendant can enter?

A

Guilty, Not Guilty, or Nolo Contendere.

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14
Q

What does Nolo Contendere mean?

A

A plea that neither admits nor denies the crime but allows the court to treat the defendant as guilty.

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15
Q

What does the Fifth Amendment protect against?

A

It protects against self-incrimination and requires an indictment before trial for capital crimes.

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16
Q

What is Probable Cause?

A

The reasonable basis on which law enforcement convinces a judge that criminal activity has occurred.

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17
Q

What is the Presumption of Innocence?

A

The requirement that the government must prove a criminal defendant’s guilt beyond a reasonable doubt.

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18
Q

What does the Fourth Amendment protect against?

A

It protects against unreasonable search and seizure by requiring a valid search warrant.

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19
Q

Define Unreasonable Search and Seizure.

A

A violation of the Fourth Amendment that occurs when a valid search warrant is not obtained or exceeded.

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20
Q

What is a Search Warrant?

A

A court order required prior to private property being searched or seized.

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21
Q

What is the expectation of privacy?

A

The expectation that one will not be observed by the state.

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22
Q

What does the Fifth Amendment say about Double Jeopardy?

A

It prohibits an individual from being prosecuted twice by the same governing body for the same offense.

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23
Q

What is the Sixth Amendment?

A

It provides rights in a criminal case, including the right to a speedy trial, trial by jury, and assistance of an attorney.

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24
Q

What does the Eighth Amendment prohibit?

A

It prohibits excessive bail, excessive fines, and cruel and unusual punishment.

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25
Define Fraud.
A false representation of fact made with intent to deceive another that is justifiably relied upon to that person's injury.
26
What constitutes Theft by Deception?
Creating or reinforcing a false impression or failing to disclose a known lien in a confidential relationship.
27
What is Mail Fraud?
Using the U.S. Postal Service to conduct fraudulent activities with the intent to deprive an owner of property.
28
What is Wire Fraud?
Using electronic means of communication to conduct fraudulent activities with the intent to deprive an owner of property.
29
What is Securities Fraud?
Fraud in the purchase or sale of a security, primarily defined by the Securities Exchange Act of 1934.
30
What is Health Care Fraud?
False claims under the False Claims Act, such as billing for services not performed or falsifying diagnoses.
31
What is Counterfeiting?
The use of counterfeit access devices to initiate a transfer of funds.
32
What is Bankruptcy Fraud?
Falsification of documents filed in bankruptcy cases, including concealment of property.
33
Define Conspiracy.
A combination or agreement between two or more persons for the commission of a criminal act.
34
What is Obstruction of Justice?
A criminal act involving interference with the administration of laws during investigations and trials.
35
What is a False Statement to a Bank?
Willfully making a false statement to a federally insured financial institution.
36
What is a False Statement to a Federal Agency?
Willfully or knowingly making a false or fraudulent statement to a department or agency of the United States.
37
Define Larceny.
The unlawful taking of personal property with the intent to deprive the rightful owner of this property.
38
What is the difference between Larceny and Robbery?
Larceny is theft without force, while robbery involves illegally taking something by force.
39
How is Larceny commonly referred to?
Theft or stealing.
40
What is Burglary?
Theft by breaking and entering.
41
What is Money Laundering?
Falsely reporting income obtained through criminal activity as income obtained through a legitimate business enterprise.
42
What is the Racketeer Influenced and Corrupt Organization Act (RICO)?
A law imposing criminal and civil liability upon businesspersons engaging in prohibited activities in interstate commerce.
43
What does a 'Pattern of Racketeering' under RICO entail?
Two or more similar acts of organized crime in a ten-year period.
44
Define Cyber Crime.
A significant trend in criminal law resulting from the rapid increase of the internet.
45
What is Endangerment of Workers?
A criminal act that involves placing employees at risk concerning their health and safety in the work environment.
46
What does Aiding and Abetting mean?
A criminal action arising from association with and assistance rendered to a person guilty of another criminal act.
47
What is the role of an Accessory in criminal law?
An accessory assists in preparation for a crime or helps after the crime has been committed.
48
What is Bribery?
The offering, receiving, or soliciting of something of value to influence an official's action.
49
What is the Foreign Corrupt Practices Act (FCPA)?
A U.S. law banning the payment of bribes to foreign officials to obtain business.
50
What are Sentencing Guidelines?
Standards adopted by the U.S. Sentencing Commission to standardize sentences for similar crimes.
51
What are the three basic forms of business organizations?
* Sole Proprietorships * Partnerships * Corporations
52
Define Closely Held organization.
An organization owned by only a few people.
53
Define Publicly Held organization.
A business organization with hundreds or thousands of owners who can exchange ownership interests on public exchanges.
54
What are the significant factors to consider when selecting a business's organizational form?
* Cost of creating the organization * Continuity or stability of the organization * Control of decisions * Personal liability of the owners * Taxation of the organization’s earnings
55
What does the term 'Creation' refer to in business organizations?
The legal steps necessary to form a particular business organization.
56
What does Continuity refer to in the context of business organizations?
The stability or durability of the organization, including how it can be dissolved.
57
What is Dissolution?
The cancellation of an agreement, rescinding its binding force.
58
What is a Sole Proprietorship?
The simplest form of business organization, created and controlled by one owner.
59
What is the main advantage of a Sole Proprietorship regarding creation?
It is the easiest and least expensive business organization to create.
60
How is the continuity of a Sole Proprietorship tied?
Directly to the will of the proprietor.
61
What is the liability of a Sole Proprietor?
Unlimited liability for the debts of the proprietorship.
62
How are Sole Proprietorships taxed?
Not taxed as an organization; income is attributed to the proprietor.
63
Define Partnership.
A business organization involving two or more persons agreeing to conduct a commercial venture while sharing profits and losses.
64
What is a key requirement for forming a Partnership?
* Two or more persons * A common interest in business * Sharing profits and losses
65
What happens to a general partnership upon a change in partners?
It is dissolved.
66
What is the liability structure in a general Partnership?
All partners have unlimited liability for the organization's debts.
67
How are Partnerships taxed?
Not a taxable entity; profits are reported on individual partners' tax returns.
68
What is a Corporation?
An artificial, but legal, person created by state law.
69
What distinguishes a Domestic Corporation from a Foreign Corporation?
Domestic operates in the state that issued the charter; Foreign operates in states other than the issuing state.
70
What is a Charter?
The legal document issued by a state when creating a new corporation.
71
What are Shareholders?
The owners of a corporation who vote on major decisions.
72
What is 'Piercing the Corporate Veil'?
A legal doctrine used by courts to hold shareholders personally liable for a corporation's debts.
73
What is Double Taxation in corporations?
When the corporation pays taxes on earnings and shareholders pay taxes on dividends.
74
Define Limited Partners in a Limited Partnership.
Owners who forgo control of operations in return for limited liability.
75
What is an S Corporation?
A business organization formed as a corporation but treated as a partnership for taxation purposes.
76
What is a Limited Liability Company (LLC)?
A business organization with characteristics of both a partnership and a corporation, limiting personal liability to capital contributions.
77
What is the role of a Principal in an agency relationship?
The person who gives an agent authority.
78
What is Actual Authority?
The authority a principal expressly or implicitly gives to an agent.
79
What does Respondeat Superior refer to?
The doctrine imposing liability on one for torts committed by another person in their employ.
80
What is the Business Judgment Rule?
A presumption that a corporate director is acting in good faith and with due care in the best interest of the firm.
81
What is a Benefit Corporation?
A corporate form that requires ensuring explicit social goals in addition to producing shareholder profits.
82
What is the presumption commonly applied in shareholder derivative suits?
It is presumed that directors act in the best interest of the firm unless proven otherwise by showing a breach of fiduciary duty.
83
Define Benefit Corporation.
A corporate form that requires ensuring explicit social goals in addition to producing shareholder profits.
84
What is a Security under securities law?
An investment in which the investor does not participate in management.
85
List the three questions courts seek positive answers to when determining if a purchase is a security.
* Is the investment in a common business activity? * Is the investment based on a reasonable expectation of profits? * Will these profits be earned through the efforts of someone other than the investor?
86
What is the role of the Securities and Exchange Commission (SEC)?
To regulate the securities industry and enforce securities laws.
87
When was the Securities and Exchange Commission (SEC) created?
1934.
88
What does the Securities Act of 1933 regulate?
The initial sale of securities to the public through disclosure requirements.
89
What are the three sanctions for violations of the Securities Act of 1933?
* Criminal punishment * Civil liability * Equitable remedy of an injunction
90
What is an Issuer in securities law?
An individual or business organization offering a security for sale to the public.
91
What is a Registration Statement?
The legal document required to be filed with the SEC before securities are offered for sale to the public.
92
What must be included in a Registration Statement?
A detailed disclosure of financial information about the issuer and controlling individuals.
93
Define Prospectus.
The legal document required to be made available to potential purchasers of securities under the 1933 Securities Act.
94
What is the purpose of a Tombstone Ad?
To announce the public offering of securities during the waiting period.
95
True or False: Civil liability under the 1933 Act usually involves a buyer suing for a refund of the investment.
True.
96
What does Section 11 of the Securities Act of 1933 deal with?
Registration statements and imposes liability on signers and directors for misleading statements.
97
What is the basic period for the statute of limitations under the Securities Act of 1933?
One year.
98
What is Due Diligence in the context of the Securities Act of 1933?
A defense that experts may assert involving a reasonable investigation into available information.
99
What does the Private Securities Litigation Reform Act of 1995 (PSLRA) limit?
The recovery for securities violations against third parties not directly responsible for the violation.
100
Define Blue Sky Laws.
Securities law enacted by states to regulate the securities industry.
101
What is the Sarbanes-Oxley Act of 2002 aimed at?
Correcting inadequacies in laws that allowed for corporate fraud.
102
What is the Public Company Accounting Oversight Board (PCAOB)?
A board established by the Sarbanes-Oxley Act to oversee the audits of public companies.
103
What is a key requirement of the Sarbanes-Oxley Act regarding financial statements?
CEOs and CFOs must certify the accuracy of quarterly and annual financial statements.
104
What is the purpose of the Dodd-Frank Wall Street Reform and Consumer Protection Act?
To address multiple issues of financial reform and create new regulatory agencies.
105
What does the JOBS Act of 2012 promote?
Eases federal regulation of initial public offerings to encourage investment in start-ups.
106
Fill in the blank: The _______ Act allows companies to raise money from accredited investors using the Internet.
[JOBS]

Legal Enviornment Of Business (3 decks)

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