Reserved for Prof Linda Harris
ajatho
quiz_law.docx
226. The Sherman and Clayton Act provide strict guidelines for what illegal monopolization is f
227. In U.S. v. Trenton Potteries, a group of sanitary potters successfully argued that reasonable price-fixing agreements were legal. f
228. In U.S. v. Trenton Potteries, the Supreme Court held that the defendants' price-fixing agreements were legal under a rule of reason analysis because they resulted in lower prices for consumers. f
229. In Freeman v. San Diego Assn. of Realtors the court held that for the Multiple Listing Services to join services together and to set prices together was illegal under a rule of reason analysis because the defendant failed to show how it helped the market. f
230. Vertical restraints of trade concern contracts among buyers and sellers at the same level of business. f
231. In Leegin Creative Leather Products v. PSKS, the Supreme Court held that minimum vertical price fixing controls (resale price maintenance) would be legal if it helped interbrand competition at the expense of intrabrand competition. t
232. If a firm engages in price discrimination, it may defend itself by showing that there is a cost justification for charging different customers different prices. t
In 2001, Bettina opened Bettina Brownies in a shopping mall. The brownies were a hit and soon Bettina was operating shops in several malls in Illinois. By 2008 she had expanded operations to Indiana and she decided that it was time to finance expansion through the equity markets. With an investment banker, she prepared for the initial offering of Bettina Brownies. She sold 50,000 shares of stock at $10 a share.
Expansion continued. Keebler determined that Bettina was a well-run company with an attractive financial position. It began secret negotiations with Bettina to buy her interest in the business. News of the negotiations leaked. Mr. Little, CEO of Keebler, denied that they were pursuing a deal with Bettina. A month later Bettina sold her share of the business to Keebler.
Shortly before Bettina sold her interest to Keebler, Joe Kelso, a carpet cleaner was working at Bettina office when he overheard discussion of the sale to Keebler. Joe bought a large number of shares in Bettina. After the Keebler sale was completed, Joe sold his stock for a substantial profit.
Please answer the following question(s) referring to these facts.
____ 233. Refer to Fact Pattern 21-1. Once Bettina sells stock in Bettina Brownies she is under a legal obligation to repay the shareholders of her company the amount that they have invested. f
234. Refer to Fact Pattern 21-1. Even if Bettina calls her security offering "brownie squares," she will still be subject to the 1933 Securities Act if the security meets the requirements of the Howey test. t
235. Refer to Fact Pattern 21-1. If Bettina complied with the disclosure requirements of the 1933 Act she would need to fully disclose all material information concerning her stock and issue a prospectus. t
236. Debt and equity both provide sources of funds for a company. t
237. Stocks and bonds are the most commonly known form of securities. t
238. The Securities and Exchange Commission is responsible for enforcement and administration of federal securities law. t
239. The SEC may require that information be released about the high-risk factors of a proposed security offering. t
240. Companies that issue publicly traded securities must turn in quarterly and annual financial reports to the SEC. t
241. Investment advisers may not, by law, be the managers of an investment company.
242. The regulations adopted by the SEC under the Investment Advisers Act provide regulation of professionals working in the securities industry.
243. The over-the-counter stock market is governed by the National Association of Securities Dealers (NASD).
244. The use of mandatory arbitration clauses in contracts between investors and their brokerage firms has been prohibited by the SEC.
245. The Supreme Court has noted that the Customs officials who assign tariff classes to imported goods must be given deference by the courts in how Customs interprets the law of tariffs.
246. Dumping occurs when a company sells its products for less money in a foreign market than it charges for those same goods in its home market.
247. In Huaiyin Foreign Trade Corp. v. U.S. the appeals court held that crawfish from China were being sold in the U.S. market at below U.S. prices was a reflection of lower production costs in China, so that no tariff could be applied.
248. A foreign trade zone is where businesses can import goods for processing, assembly, or warehousing, without paying duties until the finished products are sent to the market.
250. Individuals and businesses in countries that are "part of the world community" have standing to go before the International Court of Justice at The Hague, Netherlands.
