Legal Research & Case Analysis Flashcards
7 cards from real Series 66 – Uniform Combined State Law Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Legal Research & Case Analysis flashcards as text
Chiarella v. United States held that a printer who traded on information in takeover documents did NOT violate Rule 10b-5 because:
Answer: He owed no duty to disclose to the sellers
Silence is fraud only where there is a duty to disclose, and the printer had no relationship with the target's shareholders.
Under Dirks v. SEC, a tippee is liable for trading on inside information only if:
Answer: The tipper breached a duty by disclosing for a personal benefit and the tippee knew or should have known it
Tippee liability is derivative of the insider's breach, which requires a personal benefit to the tipper.
United States v. O'Hagan upheld which theory of insider trading liability?
Answer: The misappropriation theory
O'Hagan held that trading on confidential information in breach of a duty owed to its source violates Section 10(b).
SEC v. Capital Gains Research Bureau established that investment advisers:
Answer: Owe clients a fiduciary duty, and the SEC need not prove intent to injure or actual injury
The Court held that Section 206 reflects congressional intent to eliminate conflicts of interest, including undisclosed scalping.
Lowe v. SEC is important for its holding that publishers of impersonal, bona fide, regularly published newsletters:
Answer: Fall within the publisher's exclusion from the adviser definition
Lowe protected general, non-personalized financial publications from adviser registration requirements.
Janus Capital Group v. First Derivative Traders held that, for Rule 10b-5(b), the 'maker' of a statement is:
Answer: The person with ultimate authority over the statement, including its content and communication
A service provider that merely helped prepare a prospectus did not 'make' the statement.
Morrison v. National Australia Bank limited the reach of Section 10(b) to:
Answer: Transactions in securities listed on U.S. exchanges and domestic transactions in other securities
Morrison rejected the 'conduct and effects' test and applied a presumption against extraterritoriality.
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