South Dakota is the location for many national banks’ credit card operations. How much
income tax could the state of South Dakota collect on the banks that operate their credit
card divisions there?
a. South Dakota could collect tax on the banks’ full income.
b. South Dakota cannot collect income tax unless the banks are headquartered or
incorporated there.
c. South Dakota cannot collect any income tax from foreign corporations.
d. South Dakota can collect income taxes from earnings on the credit card operations.
B has made a valid acceptance.
a. True
b. False
Personnel manuals have been held to constitute an employee contract.
a. True
b. False
Threatening a job loss for joining a union is an unfair labor practice for employers.
a. True
b. False
A tombstone ad:
a. is permitted in Regulation D offerings.
b. is an offer to sell securities.
c.can be run prior to the effective date of the registration.
d.all of the above
Employers are responsible when employees use their computers to infringe on others’
intellectual property rights.
a. True
b. False
U.S. companies that operate plants in other countries:
a. are required to comply with OSHA standards outside the United States if they are
incorporated in the United States.
b. are subject to the Fair Labor Standards Act if they have 15 or more employees in the
United States.
c.must apply for exemptions from the National Labor Relations Act prior to opening
factories in other countries.
d.are exempt from U.S. labor laws there if they close plant operations in the United
States. e. none of the above
Pressure contributes to the use of the either/or test for resolving ethical dilemmas.
a. True
b. False
Competition restraints in commercial leases are generally valid.
a. True
b. False
The language “as is” disclaims both the warranty of merchantability and the warranty of
fitness for a particular purpose.
a. True
b. False
Police power is:
a. the states’ authority to bypass the Fifth Amendment.
b. the states’ authority to conduct searches under the Fourth Amendment.
c. government agencies’ authority to conduct a search of private property at any time.
d. the states’ power to pass laws to promote public welfare and health and safety .
Reverse FOIA suits are suits by agencies to stop disclosures.
a. True
b. False
Which of the following is not an element of the Nash test?
a. Will I feel as good over the long term about this decision?
b. Is it legal?
c.How did I get into this situation in the first place?
d.Could I discuss this decision with the affected parties?
A hostile takeover is one supported by management.
a. True
b. False
Territorial restrictions are:
a. illegal per se.
b. questioned when there is no interbrand competition.
c.the same as tying sales.
d.none of the above
The Regulatory Flexibility Act:
a. created the process of hybrid rule making.
b. requires publication of rule notices in trade magazines.
c. requires a six-month comment period in formal rule making.
d. allows regulators to promulgate rules without prior notice.
For an injured party to recover for breach of a UCC warranty under the UCC:
a. there must be privity of contract.
b. even under the strictest alternative, the party can be a guest.
c.he/she must be a natural person.
d.none of the above
A bond is not considered a security under federal law.
a. True
b. False
The U.S. Supreme Court has no original jurisdiction.
a. True
b. False
Limited liability partnerships are favored by accounting firms because they limit the
liability of partners for the acts of the other partners.
a. True
b. False
Appeals from federal administrative agency decisions go:
a. to federal district court.
b. to U.S. Court of Appeals.
c. directly to the U.S. Supreme Court.
d. none of the above
The No Electronic Theft Act:
a. makes it a crime to use the Internet to pass along copyrighted material even when
there is no profit.
b. applies only when copyrighted material is used for profit.
c.does not apply to written materials.
d.none of the above
Which protection is not part of FLSA?
a. minimum wage
b. maximum hours
c.retirement benefits
d.All of the above are protections.
Firing an agent does not end apparent authority.
a. True
b. False
Pump and dump is the act of hyping a stock in order to benefit from a sale once the
hype affects the price.
a. True
b. False
Ads by members of professional groups can be regulated by the state.
a. True
b. False
Which of the following does not enjoy an absolute privilege to charges of defamation?
a. members of Congress while speaking on the floor
b. witnesses in a court hearing
c.newspaper reporting witness testimony from a trial
d.All of the above carry absolute privileges.
The Family Medical and Leave Act provides for a paid 12-week leave for family
illness, birth, or adoption.
a. True
b. False
The Consumer Product Safety Improvement Act of 2008 includes rules covering the
resale of goods such as in a garage sale.
a. True
b. False
Bait and switch:
a. is a sales tactic of advertising a cheaper product in order to get a customer in to buy a
more expensive product.
b. is not based on ad content.
c.is not regulated by the FTC.
d.none of the above
The Federal Register Act is:
a. not part of the Administrative Procedures Act.
b. an act that provides for publication of the United States Code.
c. the same as the Regulatory Flexibility Act.
d. the act that covers the registration of meetings.
Otis Elevator became a joint venturer with the government of South Vietnam, with a
70/30 profit split. The Vietnamese government then imposed a rule that allowed it to
take 90% of all profits earned in Vietnam. Does Otis have any rights to return to the
70/30 split?
Pedro Moreno and Rolando Cue-Baiza brought their boat from Nassau to Miami. They
re-entered the Miami port without going through customs. They docked the boat and
began unloading it. Miami customs officials had observed the boat re-enter (by
helicopter). When Moreno and Cue-Baiza began unloading the boat, customs officials
sent in
a team of officers to search the boat (no warrant). The officers discovered numerous
bales of marijuana during the search and Moreno and Cue-Baiza were charged with
drug possession and trafficking. They are now challenging the validity of the
warrantless search. Discuss its validity.
Alan Freeman is in the process of forming a corporation in order to protect himself
from liability in the operation of his construction/development business. The business is
incorporated on November 1, 1986. However, Alan was anxious to get started on a
townhouse development. He signed contracts with subcontractors for the project during
September and October. Discuss Alan’s liability before and after incorporation.
Al Hunt was an engineer with the State Department of Transportation. While surveying
a segment of highway, Mr.
Hunt was injured when a motorist did not honor the “Slow” and “Caution” signs posted
for 1/2 mile before the survey location. Mr. Hunt’s leg is permanently damaged and he
has missed 3 months of work in recovery and therapy. Can Hunt recover from the State
Department of Transportation? What are his rights against the motorist?
The Economic Espionage Act only applies in international transactions.
a. True
b. False
Rule 506 has no dollar limitations.
a. True
b. False
Describe what brownfields are and what the federal government had been doing to help
manage them.
What is a hung jury and what is its effect?
The National Park service withdrew its proposed rules on the use of snowmobiles in
national parks. Describe any legal issues that might exist in its withdrawal of the rules.
Anne Twain purchased two hamsters for her children. She told the salesperson, “I want
two hamsters of the same gender, now.” The pet store salesperson said, “No problem.
These are two males.” Six weeks later, Anne’s children reported the birth of thirteen tiny
hamsters. What rights does Anne have?
List international courts with consensual jurisdiction.
An agency at will is a relationship in which there is no definite ending date.
a. True
b. False
What penalties exist for violation of federal environmental regulations?
Ann McEachron is an administrative assistant at a large international accounting firm.
Her supervisor has asked her to destroy boxes of documents from an audit the firm
conducted 2 years ago. The firm generally keeps records for
7 years, because of potential tax liability and issues, but it has destroyed documents
earlier in cases in which the amount of paperwork becomes overwhelming. Ann
wonders about the request, but complies with her supervisor’s order.
The company that was the subject of the audit is currently under criminal investigation
and the partner in the accounting firm who conducted the audit is aware of that
investigation.
It is a federal crime to destroy documents that are involved in or could potentially be
involved in either a civil or criminal investigation. Evaluate the criminal liability of
Ann, her supervisor and the partner for the destruction of the comments. Would your
answer be different if Ann had read in the newspaper about the criminal investigation of
the company?
Put the following steps in the securities registration process in chronological order.
Experts’ opinions
Registration filing
Red herring prospectus
Tombstone ad
Offers to sell securities Sale of securities Registration approval
Discuss why Bernie Madoff received the sentence he did for his crimes.
A Section 12 violation results from making a material misstatement in a registration
statement.
a. True
b. False
Janet Walker is a computer information systems major who has been able to tap into an
ice cream manufacturer’s computer system. As a practical joke, Walker changes the
manufacturer’s ice cream formula so that an entire day’s production has a bitter taste to
it. Has Walker committed any crime?
Name the three government publications covered under the Federal Register Act.