Asked by Jaylee Field on May 27, 2024
Verified
Space Flight 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. The firm is charged with violating the Securities Act of 1933. Its 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.
Securities Act
A law aimed at regulating the securities industry and requiring disclosure of important information regarding offerings of securities to the public.
Registration Statement
A legal document filed with the Securities and Exchange Commission (SEC) that supplies essential financial and business information about a company prior to going public.
- Realize the significance of honest disclosure in the context of registering and the repercussions of misrepresenting facts.
- Examine the effects of nonobservance of securities laws, encompassing potential sanctions and obligations.
Verified Answer
OK
Ogechukwu Ki-OnwusiMay 28, 2024
Final Answer :
D
Explanation :
The best defense for Space Flight Inc. would be that the untrue statements were not material, meaning they would not have affected the investment decision of a reasonable investor. The Securities Act of 1933 requires that all material facts are accurately disclosed; immaterial inaccuracies would not constitute a violation.
Learning Objectives
- Realize the significance of honest disclosure in the context of registering and the repercussions of misrepresenting facts.
- Examine the effects of nonobservance of securities laws, encompassing potential sanctions and obligations.
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