July Study Question of the Month

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A publicly traded company solicits private investors through a PIPE transaction. After the shares are sold, the company does not register them with the SEC. Which of the following negative consequences is it most likely to face?
  1. Disciplinary action by the SEC
  2. Disciplinary action by FINRA
  3. Damages paid to the holders of the privately placed shares
  4. Conversion of the privately placed shares to regular shares at a conversion ratio unfavorable to the company

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