Chapter 6 Practice Questions
1. Which of the following could be exempt from liability for an untrue statement or omission in a registration statement?
A. All directors of, or partners in, the issuing company at the time the registration statement was filed
B. Anyone who signed the registration statement
C. The issuer who, subsequent to learning of a misleading portion of the statement, explained the statement’s flaws to the SEC
D. An underwriter of the security who undertook reasonable investigation and had reasonable grounds to believe that each part of the registration statement was true
2. Part I of a registration statement, if complete and correct, constitutes the offering’s:
A. Underwriting Agreement
B. Prospectus
C. Due diligence defense
D. Piggyback registration rights
3. Which of the following accurately describe restrictions on the relationship between investment banking personnel and research analysts?
I. A manager from the investment banking department may review and approve/block a research report, as long as she is reviewing it only for legal and compliance issues.
II. If the head of the investment banking department is also a member of the board, he may influence the compensation evaluations of a research analyst, as long as he is acting strictly in his capacity as a board member.
III. A firm’s research and investment banking departments must be separated physically.
IV. A firm’s research and investment banking departments must be separated in terms of how their information is stored electronically.
A. I and II
B. II and III
C. III and IV
D. I and IV
4. XYZ, LLC files a registration statement for its IPO. It receives in response a deficiency letter from the SEC. What does this mean?
A. The registration statement has been rejected but may be filed again.
B. The registration statement has been rejected and may not be filed again.
C. The effective date will