Legal and Regulatory Frameworks Flashcards

Under the Resource Conservation and Recovery Act (RCRA), which category of waste is subject to the most stringent 'cradle-to-grave' tracking and disposal requirements?

Answer: Listed and characteristic hazardous waste

RCRA Subtitle C governs hazardous waste (listed or exhibiting hazardous characteristics) with strict generator, transporter, and disposal facility requirements from generation to final disposal.

Which element is NOT required to establish a securities fraud claim under SEC Rule 10b-5?

Answer: Privity of contract between the plaintiff and defendant

Rule 10b-5 claims require a material misrepresentation, scienter, connection to a security purchase/sale, reliance, economic loss, and loss causation — privity is not required.

A company's board of directors relies on management's representations when approving a significant transaction without independently investigating warning signs. Under which doctrine might directors face personal liability for resulting losses?

Answer: The duty of care / gross negligence standard

Directors who fail to exercise informed, good-faith oversight may breach their duty of care; gross negligence in the decision-making process can override business judgment rule protection.

Under the Bank Secrecy Act, financial institutions must file a Suspicious Activity Report (SAR) within how many calendar days of detecting a suspicious transaction?

Answer: 30 days

BSA regulations (31 CFR 1020.320) generally require SARs to be filed within 30 calendar days of detecting the facts constituting a basis for filing.

Which principle in regulatory compliance holds that a company cannot escape liability for a violation by claiming it was following industry standard practice if that practice itself violates the law?

Answer: Custom is not a defense to regulatory non-compliance

Compliance with industry custom or 'everybody does it' is not a legal defense; regulations set binding minimum standards regardless of prevalent industry practices.

Under the CAN-SPAM Act, which requirement applies to commercial email messages sent to recipients who have NOT opted in to receive them?

Answer: Each message must include a clear opt-out mechanism that is honored within 10 business days

CAN-SPAM does not require prior consent but mandates a working opt-out mechanism that senders must honor within 10 business days of the request.

A multinational corporation's subsidiary in a foreign country bribes a local official to secure a contract. Under the FCPA, which parties may face liability?

Answer: The parent corporation, the subsidiary, and any US person who participated, under agency and control-person theories

The FCPA extends to issuers, domestic concerns, and US persons; parent companies can be liable for subsidiaries' acts through agency, authorization, or willful blindness theories.