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Form 144 must be filed with the SEC concurrently with the sale or earlier. within 10 days of the sale 5 days before the sale correct answers concurrently with the sale or earlier. Form 144, which alerts the SEC to the impending sale of unregistered or control stock, must be filed concur...

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  • August 9, 2024
  • 143
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • form 144 must be filed with the sec concurrently

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Series 24 || very Flawless.
Form 144 must be filed with the SEC

concurrently with the sale or earlier.

within 10 days of the sale

5 days before the sale correct answers concurrently with the sale or earlier.

Form 144, which alerts the SEC to the impending sale of unregistered or control stock, must be
filed concurrently with or before the sale. The form must also be filed as amended if there is an
inaccuracy or to indicate a change in broker.

For an additional issue offering where the subject security is quoted by the OTC Markets Group,
the prospectus delivery requirement period is

90 days
60 days
40 days
25 days correct answers 40

The prospectus delivery requirement periods in the aftermarket are as follows: for IPOs, 90 days
if the security is non-Nasdaq and 25 days if the security is to be listed or quoted over Nasdaq.
For additional issues, there is no requirement to deliver a prospectus in the secondary market if
the security is listed NYSE or Nasdaq. Once the distribution is complete, there is no further
obligation to deliver a prospectus. If the security is non-Nasdaq OTC, the prospectus delivery
requirement period is 40 days.

A company's board of directors has authorized senior management to proceed with a public
offering of senior debt securities. Following submission of the registration statement, which of
the following documents must contain the legend "subject to completion or amendment"?

red herring

form 144

form t correct answers red herring

The legend "subject to completion or amendment" must be printed in red on a preliminary
prospectus (red herring). SEC Schedule 14A is filed to provide financial information and other
important procedures for shareholders meetings

All of the following are requirements of a Rule 506(b) offering under Regulation D except

the sale is limited to a total of 35 investors.

,the issue is not advertised to the general public.

all nonaccredited investors are sophisticated correct answers the sale is limited to a total of 35
investors.

In a Rule 506(b) offering, an issuer that is free of "bad actors" can sell to an unlimited number of
accredited investors. However, there can be no more than 35 nonaccredited investors in any
single offering. All investors must receive a copy of the offering memorandum, and all
nonaccredited investors must be sophisticated. In addition, nonaccredited investors must be
permitted to use a purchaser representative to help them evaluate the investment. Certain
advertising, if limited in scope, is permitted. Advertising to the general public is strictly
prohibited. Rule 506(c) prohibits nonaccredited investors.

A member firm, in return for letting a customer buy shares of a new issue at the public offering
price, requests that the customer buy at least 500 additional shares in the secondary market
within two weeks of the issuer's effective date. This action is

permitted
prohibited correct answers prohibited

Tie-in arrangements are considered fraud under the Act of 1934 and are strictly prohibited.

Which of the advertising or sales promotion activities described below would be permitted in
conjunction with a Rule 506(b) private placement

Blanket mailing of a magazine reprint sent by a broker-dealer to all of the firm's customers that is
highly favorable to the issuing corporation

Announcement of a private placement and invitation to attend an investment information
meeting sent to a select group of institutional investors correct answers Announcement of a
private placement and invitation to attend an investment information meeting sent to a select
group of institutional investors

The SEC's rule centers on keeping private placements out of the general public's view. Any
advertisement or promotion that solicits buying interest in private placement securities and can
be freely seen or read by average investors violates SEC rules governing the terms under which
these distributions are permitted.

Under SEC rules, all of the following would be considered accredited investors except

an individual with annual income of $500,000 for the last two year with an expectation of
continued earnings at that level.

an officer of the issuer with annual income of $100,000.

,an individual with a personal net worth of $200,000. correct answers an individual with a
personal net worth of $200,000.

Under SEC rules, an accredited investor is an institution, an individual with annual income of
$200,000 or more (with an expectation of continued earnings), an individual with a net worth of
$1 million or more, exclusive of the net equity of their primary residence, or any officer or
director of the issuer. In joint accounts, the income threshold is $300,000.

Under SEC Rule 10b-13, all of the following would be prohibited from tendering shares except

an investor long call options

an investor long stock.

an investor short against the box.

an investor short stock correct answers an investor long stock.

To tender stock, a customer must be long the stock. Being long call options does not satisfy this
requirement unless the customer has issued exercise instructions. If a customer is short against
the box, the customer's net position is zero.

Regulation A requires an underwriting broker-dealer to furnish an offering circular to purchasers

concurrently with the mailing of the customer confirmation.

24 hours before the confirmation.

24 hours before the confirmation. correct answers 24 hours before the confirmation.

Regulation A requires that an offering circular be provided to purchasers at least 48 hours in
advance of sales.

A public reporting company is looking to offer securities privately under a safe harbor exemption
found in Regulation D Section 506(b). Which of the following statements is most accurate
regarding this planned offering

There is no limit to the number of nonaccredited investors who may participate.

"Bad actors" may not rely on the safe harbor.

General solicitation is acceptable. correct answers "Bad actors" may not rely on the safe harbor.

Felons and other bad actors may not rely on the Rule 506 safe harbor. In 2013, the SEC adopted
the bad actor disqualification for Rule 506 of Regulation D under the Securities Act of 1933. A

, bad actor may not rely on either Rule 506(b) or 506(c) of Regulation D if the issuer or any other
person covered by the rule has a relevant criminal conviction.

Under SEC rules, Form 8-K must be filed

within 10 business days of the event.

promptly

within 4 business days of the event. correct answers within 4 business days of the event.

Form 8-K is used to report newsworthy events to the SEC. The reporting time limit is four
business days.

A member firm receives an order from an investment adviser to purchase shares in a common
stock IPO. Under FINRA Rule 5130, the member must

obtain a representation from the conduit that the purchaser is not a restricted person.

refuse to accept the order.

obtain a list of all of the adviser's clients to determine eligibility. correct answers obtain a
representation from the conduit that the purchaser is not a restricted person.

When receiving an order to buy a new equity issue from a bank, investment adviser, or other
conduit, a member must obtain a representation from the conduit that all purchasers are in
compliance with FINRA Rule 5130 (i.e., they are not restricted persons).

A broker-dealer selling a block of restricted securities for an insider pursuant to Rule 144 may
engage in which of the following activities?

Showing the stock to any customers who have indicated buying interest in the securities within
the preceding 10 business days

Soliciting buyers for the stock without restriction but filling all orders as an agent

none of these correct answers Showing the stock to any customers who have indicated buying
interest in the securities within the preceding 10 business days

An exception to the general ban on soliciting for Rule 144 sales for insiders occurs when
customers have called indicating interest within the last 10 business days or when other broker-
dealers have called indicating interest within the last 60 calendar days.

A seasoned penny stock investor is looking to open an account at your firm to continue trading in
low priced, speculative securities. The branch office manager (BOM) explains to the
representative that to open this kind of new account requires

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