"An officer of a company has been invited by a large mutual fund company to give a talk to the fund company's analysts about its business plans and prospects. At the talk, the officer inadvertently discloses material information that could affect the stock's price. Which statements are TRUE?"

Complete/Correct Question:

An officer of a company has been invited by a large mutual fund company to give a talk to the fund company's analysts about its business plans and prospects. At the talk, the officer inadvertently discloses material information that could affect the stock's price. Which statements are TRUE?

I A public announcement of the news must be made within 24 hours

II A public announcement of the news must be made within 10 business days

III The company must file an 8K with the SEC disclosing the information to avoid insider trading liability

IV The company must file a 10K with the SEC disclosing the information to avoid insider trading liability

i and iii

Explanation:

Under the Securities Exchange Act of 1934, insurance coverage for a customer accounts at any broker-dealer must be provided by the Securities Investor Protection Corporation, SIPC. Also,broker-dealers that handle non-exempt securities must be registered

By the above statements, if a a bank has customers that have both exempt and non-exempt securities, such bank is mandated to register as a broker-dealer according to the Securities Exchange Act of 1934 and as a matter of fact register under SIPC.

Cheers.  

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