1)  Marcmen Manufacturing Inc

Subject:BusinessPrice:3.87 Bought7

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1)  Marcmen Manufacturing Inc. files a registration statement with the SEC before making an offering to the general public. The registration contains false, immaterial statements of which the investors are unaware. Marcmen is charged with violating the Securities Act of 1933. Marcmen’s best defense is

a. the investors were not aware of the misrepresentations.

b. the issuer reasonably believed the misstatements were true.

c. the offering was made available to the general public.

d. the untrue statements were not material.

2) As part of a stock offering for Stakemark Realty, the firm’s accountant Edward intention¬ally misrepresents material facts in the prospectus. Frankie buys the stock unaware of the misrepresentation and suf¬fers a loss. Edward may be subject to

a. a fine and damages only.

b. a fine and imprisonment only.

c. a fine, imprisonment, and damages.

d. damages only.

3) 

Linfield Retail Stores Corporation is a public company with a market capitalization of less than $75 million. Linfield is poised to issue securities in a transaction that, under the Securities Act of 1933, is “exempt.” This enables Linfield to

a.         reduce the compliance costs by not requiring an auditor report.

b.         buy and sell the securities without liability for “recaptures.”

c.         make forward-looking financial forecasts without liability.

d.         withhold inside information from accredited investors.