General Questions Flashcards
what is the definition of a fiduciary duty
where the law imposes a duty that you treat someone in a particular way (i.e. both parties owe each other duties)
definition of an agent’s duty of loyalty
an agent has a duty to act loyally for the principal’s benefit in all matters connected to the agency relationship
concerning agency and material benefits, what does and agent have a duty not to do?
an agent has a duty not to acquire a material benefit from a third party in connection with transactions conducted or other actions taken on behalf of the principal or otherwise through the agents sue of the agent’s position
what does the securities act of 1933 regulate?
primary markets (IPOs)
what does the securities exchange act of 1934 regulate?
secondary markets (trading exchanges)
what does the SEC do?
responsible for enforcing the federal securities laws, proposing securities rules and regulating the securities industry, stock and options exchanges, and electronic securities markets
which act was the response to ENRON?
Sarbanes Oxley Act of 2002
inside directors are usually what
employees of the company
what must be contained in the notice of a shareholder meeting?
the specific business to be transacted
do the owners (shareholders) of a corporation actually get to run the corporation?
no
if a shareholder is unhappy, what are their two main ways to act?
- start selling stock and hope others will follow suit
2. vote to replace bad board members
what is widely used in public corporations in terms of the shareholder vote?
proxy voting
what is the purpose of the proxy material
give you enough information to vote in an informed manner - prevent the danger of uninformed voting
in a public company, which rules govern proxy voting
the SEC (federal) rules
are shareholder proposals mandatory for the BOD to adopt?
no, they are just suggestions
