The SEC Allows for a Private Placement Exemption Because

question 286

Multiple Choice

The SEC allows for a private placement exemption because:

• A) registration of "blue chip" securities is not necessary
• B) small investors have insufficient information about the background of such offerings, so they need additional protection
• C) small issuers need a break in the costs of the process to be able to compete effectively with large security issues
• D) issuers need greater flexibility when dealing with large numbers of small investors
• E) none of the other choices

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Definitions:

Mitigate Damages

Refers to the legal principle requiring a party to reduce their losses following a breach of contract.

Equitable Remedy

Judicial relief granted based on principles of fairness, including actions like injunctions and specific performance, as opposed to monetary damages.

Breach of Contract

An act of failing to fulfill the duties agreed upon in a contract, leading to legal ramifications for the party in breach.

Creditor

An individual or organization that is owed a financial debt or obligation by a debtor.