A Security Is Sold to the Public Under a Private

question 296

Multiple Choice

A security is sold to the public under a private placement exemption. Later a suit is filed under federal securities law claiming securities fraud. This suit will:

• A) fail since the security is not subject to the federal law since it was sold under an exemption
• B) fail since the security is not subject to the federal law since it was sold under an exemption⎯unless there were subsequent financial disclosures to the SEC
• C) fail since the security is not subject to the federal law since it was sold under an exemption⎯unless a private common law fraud suit has already prevailed
• D) be allowed since all securities are subject to the law
• E) none of the other choices

---

Definitions:

Finished Goods

Goods that have finished being manufactured and are available for purchase.

Total Manufacturing Costs

The sum of all costs directly involved in the production of a product, including direct labor, materials, and manufacturing overhead.

Work in Process Inventory

Items that are in the production process but have not yet been completed or turned into finished goods.

Actual Overhead

The real, incurred costs of running a business, excluding direct labor and direct materials, over a given period.