The Securities Litigation Reform Act of 1995

question 276

Multiple Choice

The Securities Litigation Reform Act of 1995:

• A) makes companies strictly liable for misstatements
• B) gives companies and executives a safe harbor when making forecasts about the future
• C) imposes greater liability on companies that make predictions about future performance
• D) changes the liability standard in securities fraud cases to negligence
• E) does none of these things

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Definitions:

Dividend

A payout of a portion of a company's earnings to its shareholders, usually decided by the board of directors.

Public Corporation

A company whose shares are traded freely on a stock exchange.

Registrars

Entities responsible for maintaining records of shareholders and bondholders for corporations and ensuring compliance with regulatory requirements.

Transfer Agents

Entities responsible for maintaining records of a company's securities owners, handling transfers of stock or bonds, and managing lost, destroyed, or stolen certificates.