Term
| What is the main thing you need to make sure to do when entering into a partnership? |
|
Definition
Make a detailed contract that covers:
-Relation of partners to each other
-Responsibilities of partners
-duration
-split of profit
-any other vital info |
|
|
Term
| What are the disadvantages to running a sole proprietorship? |
|
Definition
-Unlimited liability
-Difficulty of selling the business
-Difficulty in raising capital |
|
|
Term
| What is the major disadvantage to a corporation? |
|
Definition
|
|
Term
| What is Piercing the Corporate Vail? |
|
Definition
| Running a corporation that does not follow the governmental guidelines set forth for corporations. Mainly done to get benefits of incorporation, but not pay as they should.. |
|
|
Term
| What are the requirements to setting up a limited partnership? |
|
Definition
| -Must file Cert. of Limited Partnership with appropriate authority. |
|
|
Term
| What are the types of partners and what do they entail? |
|
Definition
-General Partner-Unlimited liability, responsible for all debts.
-Limited Partner-Has limited liability up to amount of investment -CAN TAKE NO PART IN MANAGMENT (Even one comment or word) -Cannot see books for business -paid after creditors, but before General Partner. |
|
|
Term
| Closely Held Corporations (C Corporations) |
|
Definition
-Shares are held by very small group of people.
-Cant be publically traded.
-Created under state statutory law
-Operates like a sole prop.
-Can be owned by only one shar3eholder
-Must follow all of the corporate structure |
|
|
Term
|
Definition
| -Closely held corporations -Not double taxed -Must be domestic corporation, under state law -Shareholders must be individuals with limited exceptions like Estates and some Trust. -Can only have on class of shareholder whom are all residents of the US. |
|
|
Term
|
Definition
-Set up like C-Corporations
-Usually Doctors, Attorneys, Dentist, Accountants. |
|
|
Term
| What are the advantages to a Professional Corp. (PC)? |
|
Definition
-Limited liability to shareholders
.Except for malpractice of the other people.
-Gives Tortuous acts of other people in the PC
-Gives for liabilities of the contractual obligations of fellow partners. |
|
|
Term
|
Definition
-Started in Germany in late 1800s
-involve less record keeping
-Texas first state to enact LLCs |
|
|
Term
| LLC legislation setup by Texas? |
|
Definition
Texas Limited Liability Company Act
-Fist act to legislate LLCs in the US.
-By 96' all 50 states had LLC legislation |
|
|
Term
| Initial LLC problems with the IRS? |
|
Definition
-IRS wanted double tax
-LLC died if one person in it died.
-After 30 years the LLC dissolved |
|
|
Term
|
Definition
Revised Uniform Limited Liability Company Act of 2006
-Proposed by National Conference of Commissioners on Uniform Laws (UCC)
-New Texas law made it clear that one member dying did not dissolve LLC. |
|
|
Term
|
Definition
-Governed by state law
-Must file Articles of Organization/Formation with Sec of State
-Name of company must contain one of the 7 abbreviations for LLC.
-Must state length of intent (Perpetual is best)
-Must state purpose (All lawful purposes is best)
-Address, Name of agent whom may be served w/ paperwork
-Managers or no managers(state names if managers)
-If successful, Cert. of Organization is issued. |
|
|
Term
|
Definition
Owners are called "Members"
-Individuals
-Corporations
-Other LLCs |
|
|
Term
| What is the Operating Agreement for an LLC? |
|
Definition
A requirement for all members
-Has company regulations/agreement
-Can be oral, some states require write
-Governs internal affairs, relations of members
-Should specify division of income, how a membership is to be transferred, process for dissolution, other. |
|
|
Term
|
Definition
-Managers can appoint officers which may or may not be a member.
-Managers must do whatever members want inside of operation agreement/state law. |
|
|
Term
|
Definition
-All members leave the LLC-
-Can be Decree of judicial dissolution
Winding Up results of dissolution
-Creditors paid first
-Articles of Dissolution are to be filed
-Certificate of Dissolution terminates LLC |
|
|
Term
| What is the general rule of thumb regarding the amount of members in an LLC? |
|
Definition
| The more members the harder it is to run said LLC. |
|
|
Term
|
Definition
-Limited Liability
-Ease of operation
-Not required to have meetings
-Flexible taxation
-Flexible management options(Member/Manager)
-No limit on number of who can be a member. |
|
|
Term
|
Definition
-State law can vary
-Some types of businesses cant be LLCs (State Banks, Joint Stock Assoc., Some foreign entities, Insurance Company)
-Legal Uncertainties (due to the newness of the laws) |
|
|
Term
| Limited Liability partnerships |
|
Definition
-Texas first state to have
-First used by professionals (doctors, accountants, ect.)
-Was at first limited to professionals
-Created to avoid earlier problems to LLCs |
|
|
Term
|
Definition
-Limits Personal Liability
-Normally not liable for partner's crap (Errors, Omissions, Negligence, Incompetence, Malfeasance-torts, contracts.)
-Does have liability of partner was involved or knew of above mentioned acts. |
|
|
Term
| Creation and Duration of LLP |
|
Definition
-Annual Fees
-Annual reports
-Partnership assets can be reached for partnership debts
-Have to have insurance or separate 7 figures fund avail.
-Partners can have limited liability unlike regular partnership |
|
|
Term
| What are the three normal main stock exchanges for securities in the US? |
|
Definition
New York Stock Exchange
American Stock Exchange
NASDAQ |
|
|
Term
| Where was the first general incorporation law passed in the US? |
|
Definition
|
|
Term
| What state laws are the current incorporation laws based off of in the US? |
|
Definition
|
|
Term
| Who developed the steam engine and what did it aid in? |
|
Definition
| James Watts, aided in the rise of the modern incorporations. |
|
|
Term
| What is the main governing set of laws that handle corporations? |
|
Definition
|
|
Term
| The Articles of Incorporation serves as what for corporations? |
|
Definition
|
|
Term
| What are the rights to Common Shareholders? |
|
Definition
-Elect board members
-Approve/Disapprove Mergers or amendments to articles of incorporation
-Elections occur at shareholder meetings
-Shareholders can question officers |
|
|
Term
| What is the main way shareholders vote and by what is it regulated? |
|
Definition
| By Proxy and regulated by Securities Exchange of 1934 |
|
|
Term
| What must be disclosed to shareholders when soliciting a proxy? |
|
Definition
-Must explain any contested matters
-Must explain consequences of vote
-Sometimes must identify the interest of the party seeking the proxy |
|
|
Term
| Even if there is no proxy, the incumbents must send shareholders what? |
|
Definition
Notice of shareholder meeting
Agenda of meeting |
|
|
Term
| What do Shareholder proposals entail? |
|
Definition
-required to be included in the proxy solicitation so all shareholders can vote on them
-Some proposals can be excluded (frivolous or repetitious)
-They are rarely successful |
|
|
Term
| What is a Derivative Action and what does it entail? |
|
Definition
-It is a lawsuit filed by shareholders against someone or something who has financially harmed the corporation when the BOD has chosen not to file suit.
-Shareholders must demand BOD take action. If BOD refuses then shareholders can take derivative actions.
-Some states require majority vote
-If lawsuit is successful, damages go to corporation. |
|
|
Term
| What happens if a Derivative Action fails in courts? |
|
Definition
| Some states require a security-for-expenses bond be used to pay for defendants legal fees. |
|
|
Term
| What can Derivative Actions be used for? |
|
Definition
-can serve as a check on the behavior of corporate managers.
-Unscrupulous shareholders may use them to extort a settlement from managers.
-Some states require security-for-expenses bond. |
|
|
Term
| How can a state allow for a dismissal in a Derivative Action suit? |
|
Definition
-If they believe the managers did not file suit in goodfaith and legitimate business reasons.
-Some states delegate authority to dismiss the case to a special litigation committee composed of "disinterested" directors. |
|
|
Term
| What is Corporate Governance? |
|
Definition
| formulating, overseeing, and monitoring the corporate process to shape it's strategic direction and performance, define it's mission and scope, and assess its interactions with affected groups. |
|
|
Term
| What does Corporate Governance also involve? |
|
Definition
implementing the rights, responsibilities, and accountability of it's
-shareholders
-BODs
-Managers(officers, executive officers) |
|
|
Term
| What are inside directors? |
|
Definition
| Corporate Officers who are also directors on the BOD. |
|
|
Term
| What can a corporate agent do to the principal when acting within scope of duties? |
|
Definition
| Bind the principal in contract and tort |
|
|
Term
| What is the problem with Principal-Agent dealings in corporation? |
|
Definition
| How to ensure that the agent will always put the interest of shareholder/principal first |
|
|
Term
| What can a firm do to ensure an agent is acting within scope? |
|
Definition
-directly monitor agent
-impose control systems to audit agent
-develop a system of punishment/reward
-utilize legal remedies and sue |
|
|
Term
| What is an Agency-Principal in corporate governance? |
|
Definition
-shareholders as principals hire BOD agents
-Directors as principals that hire officers/managers as agents |
|
|
Term
| Why does the Principal-Agent relationship cause issues with much larger and older companies? |
|
Definition
| the separation of ownership of shares. Many owners with very little majority holding. |
|
|
Term
| What is the result of large corporations having their shareholders just sell their stock when they are unhappy with the current decision of the company? |
|
Definition
| The BOD is left unchecked and allowed to do whatever they want. |
|
|
Term
| What is one way that shareholders can come together and get the BOD to do what they want? |
|
Definition
| To have a proxy vote, but the proxy is usually a member of the BOD and will thus, vote the way that the BOD already does things. |
|
|
Term
| What are the conflicting interest of shareholders and the BOD? |
|
Definition
Shareholders thinks the BOD should maximize stock price.
BOD just want to keep their position, make more money for themselves, increase/maintain fringe benefits |
|
|
Term
| Why would a director refuse a beneficial merger? |
|
Definition
| to maintain their position no matter if the merger would increase stock prices. (Inside directors could lose job, benefits, ability to move up latter, their seat on the board) |
|
|
Term
| What is Alignment of Financial Interest? |
|
Definition
| One solution for the Principal-agent problem that pays Officers/BOD with stock instead of salary to give them incentive to run the company better. |
|
|
Term
| Does Alignment of Financial Interest solve anything? |
|
Definition
| No, it only lessens the principal-agent problem because executives may still have motivation from other factors like doing things for himself with corporate money that may benefit him more then the small percentage of shares he is given in combination with his salary. |
|
|
Term
| Does having outside directors solve the principal-agent problem? |
|
Definition
| No, because outside directors often feel an obligation to the inside officers and will vote as they want. |
|
|
Term
| How can the idea of having outside directors be altered to improve it's effectiveness. |
|
Definition
-Increase the number, power and independence of the outside directors.
-Separate the role of CEO and Board Chairperson. |
|
|
Term
| What are institutional investors? |
|
Definition
| large, professionally managed providers of capital, such as pension funds, insurance companies, or mutual funds. |
|
|
Term
| How much can institutional investors own of a company on the NYSE? |
|
Definition
|
|
Term
| What is the council of Institutional Investors (CII)? |
|
Definition
| group of institutional investors got together to promote accountability of corporate executives. They monitor the governance of corporations to be sure they are promoting shareholder interest. (Best result: Maybe get 1 or 2 directors on the board.) |
|
|
Term
| Who is a major player in the CII world and what do they do? |
|
Definition
California Public Employees Retirement System (CalPERS)
-major shareholders, sponsored many reforms to corp. governance such as outside directors majority, make chairperson of the board an outside director, audit committees only outside directors. |
|
|
Term
| Has CalPERS been successful? |
|
Definition
| Not really, they usually withdraw proposals before the vote happens and often make deals with directors who promise reform. |
|
|
Term
| How does product market competition affect the way officers run companies? |
|
Definition
| If the market is competitive then the officers must strive to develop new products, reduce cost and eliminate waste in order to maintain profitability and thus, their own jobs. |
|
|
Term
| What is "executive talent"? |
|
Definition
| The knowledge that you distinguished yourself at a company as an officer who turns companies around, thus other companies want you to do the same for them. Self dealing will ruin this rep, so it stops most execs from self dealing. |
|
|
Term
| What does the market for corporate control mean? |
|
Definition
| if a corporation is not being profitable due to officers not acting like faithful agents of the shareholders as determined by an outside group, then the outside group may target that company for a takeover. |
|
|
Term
|
Definition
| acquiring company offers more than face value for stock in an attempt to purchase a controlling interest in the target company. |
|
|
Term
| What is a friendly offer? |
|
Definition
| where the acquiring company has asked the target BOD and they have agreed to endorse the takeover and recommend it's acceptance to the shareholders. |
|
|
Term
| What is a un-friendly offer? |
|
Definition
| where the board of the target company refuses the bid from the acquiring company. |
|
|
Term
| What does an un-friendly offer usually do for the target company? |
|
Definition
| It gives added incentive to the officers to run the company properly. |
|
|
Term
| What happens after a un-friendly offer when the officers fail to run the company properly? |
|
Definition
-company vulnerable to takeover
-officers may lose job
-insiders might endorse takeover to save their own jobs
-Outside directors wouldn't act in own interest which is why CalPERS prefers outside directors. |
|
|
Term
| What are the Public Solutions to Corporate Governance? |
|
Definition
Legal Duties of Directors and Officers
-Officers owe a fiduciary duty to corporation and shareholders(defined by common law and specifies the standards of care and loyalty.) |
|
|
Term
| What is the primary enforcement behind public solutions to corp. governance? |
|
Definition
| To hold officers personally liable for corporate losses such as derivative lawsuits. |
|
|
Term
| What does duty of care mean? |
|
Definition
it means that officers will
-act in good faith
-and exercise a level of care that an ordinary prudent person would in a similar situation. |
|
|
Term
| Why do the courts not second guess the corp. officers very much? |
|
Definition
-courts realize officers make big decisions like that all the time
-courts realize if they heard every corp. case then it would bog down court system
-court cases could effect decision making of the BOD |
|
|
Term
| When do Business Judgment Rules protect the corp. directors/officers? |
|
Definition
-the action taken was an informed decision
-there was no conflict of interest between decision maker and the corp.
-there was a rational basis for the decision |
|
|
Term
| What is key to remember about the Business Judgment Rule? |
|
Definition
| The decision only needs to be based on some rational basis and that is all. |
|
|
Term
| What was the severance package issue with Walt Disney about? |
|
Definition
-suit against BOD for 140 million severance package.
-basis was the BOD were responsible for outrageous amount because they hired Ovitz.
-Did not think Ovitz was right for the job.
-Judge ruled the amount was fine as long as not grossly negligent |
|
|
Term
| What are some issues with the Business Judgment Rule? |
|
Definition
-Might stop good officers from wanting job
-Might stop officers from potential good ventures because they don't want to be blamed if deal goes south.
--Several states allow for indemnification by the corp. of directors/officers for liability payments or expenses in defending themselves for unwarranted suits. |
|
|
Term
| What is the courts stand on "Duty to Loyalty" and what case is refferenced? |
|
Definition
| The have very low tolerance for it. (Guth v. Loft, Inc.) |
|
|
Term
| What issue(s) does the :Duty of Loyalty" address? |
|
Definition
| -conflicts of interest that may arise in the performance of the manager's duties. |
|
|
Term
| What is the Opportunity Doctrine? |
|
Definition
-a form of fiduciary loyalty owed by the officers to the corp.
-if officer discovers business opportunity then they must first make it available to the corp. |
|
|
Term
| Is self dealing considered a breach of contract always? |
|
Definition
|
|
Term
| What are the two types of self dealing? |
|
Definition
-Transactions between director or officer and the corp.
---Sale of property by the director to the corp. at a price greater than the market value.
---the payment to a director or officer of an exorbitant salary
-Transactions between corp. with common directors, one of the corps. might not be treated fairly in the transaction. |
|
|
Term
| When will a self dealing deal be set aside? |
|
Definition
When there is:
-fraud
-undue overreaching
-waste of corporate assets |
|
|
Term
| If the court is not convinced that a deal is fair, then when will the deal only be allowed? |
|
Definition
-After full disclosure by the majority of shareholders
-By a disinterested majority of the board w/o the participation of the interested director. |
|
|
Term
| What was the Securities Act of 1933 and Securities Act of 1934 designed for? |
|
Definition
-to promote public confidence in securities market
-give investors info to make informed decisions |
|
|
Term
| What is the basis for the 1933/34 Securities Act? |
|
Definition
|
|
Term
| What is the Blue Sky Law? |
|
Definition
| Investor complained about investment having no backing. (Judge: "The only backing this investment has is the 'Blue Sky'." |
|
|
Term
| What are the details of the 1933 Securities law? |
|
Definition
| -Regulates the initial sale of the securities to the public. (Full Disclosure before sale.) |
|
|
Term
| What must Initial sellers of securities do before sale under 1933 securities act and what are the securities? |
|
Definition
Must file registration statement w/ SEC
-Bonds
-Common/Preferred Stock |
|
|
Term
| What does the securities registration statement entail? |
|
Definition
-1.Prospectus(first page must be in all red "red haring"
-2.Regulation SA (backs up prospectus)
--Must include terms, financial statements of issuer, bio's of corps. management persons, discussion of financial interest(stock holdings, stock options), conflicts of interest, enumeration of any risk of investors, status of any lawsuits pending. |
|
|
Term
| What is the purpose of the registration statement? |
|
Definition
To provide a potential investor with the info to make a good investment.
-Underwriter
-Corporate Director |
|
|
Term
| How is the meaning of a security determined? |
|
Definition
| the Howey Test (SEC v. W.J. Howey, Co.) |
|
|
Term
| What must something be for it to be considered as a security? |
|
Definition
Must be:
-Investment of money into a common enterprise and with the expectation of profits to be made primarily by someone else. |
|
|
Term
| Who else other than the issuer of a security liable for if they make material misrepresentation of the facts? |
|
Definition
-Underwriters (banks)
-Lawyers
-Corporate officer who signed the docs
-Outside experts (lawyers, accountants, engineers, geologist)
---Violators are subject to 10k fine and or prison sentence of 5 yrs |
|
|
Term
| What does the 1934 SEC Act entail? |
|
Definition
Disclosure law before RESALE of securities
-regulates re-sale of previously issued securities on secondary markets like the NASDAQ and NYSE.
-One portion of the law regulates the activities of stock exchanges, stock, brokers and other professionals. |
|
|
Term
| What must securities issuers do under the 1934 act? |
|
Definition
-must file periodic reports to SEC detailing their financial performance
-must notify of any:
--merger offer--unexpected changes in earnings
--significant new contracts
--key employee changes
--loss of important customer(s) |
|
|
Term
| What is the "yearly report"? |
|
Definition
| a summary of the 10k report which is an update of the prospectus every year. |
|
|
Term
|
Definition
| a quarterly report which is a update to the prospectus using in house info. |
|
|
Term
|
Definition
| Major changes in the company like a new CEO. |
|
|
Term
| What is the main goal of the 1934 SEC Act? |
|
Definition
| to restrict the ability of the use of inside info by Rule 16(b) and 10(b). |
|
|
Term
|
Definition
the "short-swing" profits rule which is when a company makes capital gains by buying and selling their own stock within any six month period.
-gain must be returned to corp. treasury
-Applies to directors/officers any shareholders with 10% or more of ownership |
|
|
Term
| What was the Texas Gold/Sulfur case about? |
|
Definition
| Company convince shareholders to invest because of promise of huge oil field soon to be tapped. Company found no oil, but found gold and did not tell shareholders about gold, only about not oil. Shareholders sold off stock, company bought stock dirt cheap and then told people about the gold. |
|
|
Term
|
Definition
The Insider Trading Rule
-Applies to anyone directly or indirectly associated
-applies to any situation where misappropriation of material inside info for profits |
|
|
Term
| What is insider information? |
|
Definition
nonpublic info obtained through the relationship w/ corp
-employee, lawyer, banker, janitor |
|
|
Term
|
Definition
| people who receive info from people with insider info |
|
|
Term
| What is the Trading Sanctions Act of 1984? |
|
Definition
-provides civil and criminal penalties for insider trading.
-provides for 3x damages
-includes aiders and abettors
-5 yrs statute of limitations
-There is no statutory definition of insider trading |
|
|
Term
| What is the misappropriation Theory? |
|
Definition
inside trader should be criminally liable for rule 10(b)violation if:
-if that person conveys non-public info that was confidential even if shareholders/officers weren't harmed |
|
|
Term
| What are some examples of insider trading cases? |
|
Definition
-Martha Stewart
-Affiliates of SAC Capital Advisors
-Raj Rajaratnam of the Galleon Group
-Scot London of KPMG
-Thomas Conradt and IBM's plan to acquire SPSS |
|
|
Term
| In 2012, how many insider trading cases were initiated by the SEC? |
|
Definition
| 58 cases involving 131 people |
|
|
Term
| What are the reporting requirements for insiders because of the 1934 SEC Act? |
|
Definition
-Officers/Directors/10% or more owners must register with SEC
-Must notify SEC in timely manner of any purchase/sale of securities, source of funds used to purchase those securities and reason for purchase. |
|
|
Term
| What gives the SEC most of it's control over corporate takeovers? |
|
Definition
|
|
Term
| What does the Williams Act of 1968 entail? |
|
Definition
-Any prospective purchase of more than 5% of a company's stock must file a tender offer with SEC
-Purchaser must notify SEC and shareholders
-All offers must put on table for 20 days
-Shareholders who agree to sell have 7 days to withdraw
-If target company's BOD refuses, they must tell SEC
-If acquiring company sweetens the deal by raising price, current selling shareholders can withdraw and re-sell for new price. |
|
|
Term
| What is the purpose the Williams Act? |
|
Definition
-Prevent acquiring company from pressuring small shareholders to sell.
-allow shareholders to have time to judge the attractiveness of the tender offer |
|
|
Term
| What countries do not have transparent accounting and securities laws? |
|
Definition
|
|
Term
| What law was passed in response to the Corporate Governance scandals? |
|
Definition
| Public Company Accounting Reform and Investor Protection Act |
|
|
Term
| What was the purpose of the Public Company Accounting Reform and Investor Protection Act? |
|
Definition
-To restore trust in capital market
-Commonly called Sarbanes-Oxley Act |
|
|
Term
| What are goals of Sarbanes-Oxley? |
|
Definition
-seeks to strengthen corp. governance of publicly traded corps. by new requirements on auditors and BODs/officers.
-the act addresses perceived problems within the public accounting profession. |
|
|
Term
| What does the audit committee of the BOD entail? |
|
Definition
-only outside directors could be on audit committee
-Audit committee oversees hiring and performance of it's outside auditors
-auditors report to audit committee any disagreements w/ managers |
|
|
Term
| What must CEOs and CFOs do for financial statements? |
|
Definition
| They must certify financial statements so the SEC can eliminate the "I didn't know defense" |
|
|
Term
| What is the Public Company Accounting Oversight Board? |
|
Definition
-five person committee
-suppose to establish and enforce ethical and auditing standards for auditors of public companies.
-Auditors are required to keep records for 5 years |
|
|
Term
| What are the controversial issues with the Sarbanes-Oxley Act? |
|
Definition
-doesn't go far enough
-too expensive
-people think companies avoid going public because of this. |
|
|
Term
| What are some criticism of advertising? |
|
Definition
-ads are tasteless and wasteful assaults on consumers' senses
-creates false difference between products
-allocates demand among competition
-high expense cause hardship on new companies to compete |
|
|
Term
| What are the defenses of advertising? |
|
Definition
-offers real info about the product
-providing such info lowers the consumers cost of searching for goods
-info allows consumer to make a rational choice among goods |
|
|
Term
| Remedies for false advertising? |
|
Definition
1. Contracts-must have offer and accept.
2. advertisement is an offer for an offer
3. Therefore, common law gives little or no remedy |
|
|
Term
| What must a consumer prove to win a suit for false advertisement? |
|
Definition
-misrepresentation of material fact
-knowledge by seller that info is false
-seller's intent that consumer relied on the bad info
-Consumers justified reliance on bad info
-damage to the consumer |
|
|
Term
| What is the statutory remedy for false advertisement under the UCC and what does it entail? |
|
Definition
-advertisement can be an express warranty
--if false then it's a breach of warranty.
-Consumer must prove he relied on the advertisement
-Seller can usually prove the buyer would have still bought the goods in absence of the ad |
|
|
Term
| What act can companies use to back a false ad claim by a competitor and what does it entail? |
|
Definition
| The Lanham Trademark Act-if use false description or representation, then the company is liable. |
|
|
Term
| What are the procedures for the FTC Bureau of Consumer Protection? |
|
Definition
1.FTC investigates
2.Informal at First
3.Often ends when target of investigation agrees to stop engaging in unfair deceptive practices
4.If the FTC determines adequate reason then they pursue complaint
5.Defendant can settle w/ FTC and redress for injured consumers, pay fines, stop the bad practices
6.If no agreement then trial by ALJ who can dismiss complaint or issue a cease and desist order
7.appeal to 5 member FTC board who can either affirm, modify or reverse ALJ ruling
8. Appeal to Court of Appeals
9. FTC can sue in US District Court for injunction |
|
|
Term
| What companies have trade regulation rules? |
|
Definition
-used car dealers
-telemarketers
-funeral homes |
|
|
Term
| What are the remedies available for the FTC in regards to false advertising? |
|
Definition
1.Cease and desist orders
2.Corrective advertising |
|
|
Term
| What was Listerine ordered to put in their advertisements? |
|
Definition
| That their product will not prevent colds or sore throats or lessen their severity. |
|
|
Term
| What did STP have to do about their false advertisement? |
|
Definition
| They had to do corrective ads to let people know that their oil additive would not reduce oil consumption. |
|
|
Term
| What did Exxon have to do about their false advertisement? |
|
Definition
| They had to do corrective ads to let people know that their gas did not lower maintenance expenses or clean engines better then normal gas. |
|
|
Term
| What did Volvo have to do about their false advertisement? |
|
Definition
| They had to do corrective ads to let people know that their cars were not really safer and that they rigged their crash test to fluff the results. |
|
|
Term
| What did Doan have to do about their false advertisement? |
|
Definition
| They had to do corrective ads to let people know that their pain killers did not work any better then any other. |
|
|
Term
| What does a Deceptive Quality Claim entail? |
|
Definition
1. Establish what claim, if any is being made in the ad
2.the claim must be shown to be deceptive
3.A reasonable consumer would view ad and believe the context. |
|
|
Term
| What did dieting company have to add to their ads as a result of the probe in the 90's and who were the big names? |
|
Definition
had to add "This result is not typical; other users may be less successful" and "for many dieters, weight loss is temporary"
-Jenny Craig
-Weight Watchers |
|
|
Term
| What was the FTC Improvement Act about? |
|
Definition
| Congress ordered the FTC to focus it's energies on deceptive and misleading advertising and not on unfair ads. |
|
|
Term
| Who does the whistleblower protection act apply to? |
|
Definition
|
|
Term
| how much is a serious or non serious OSHA violation? |
|
Definition
|
|
Term
| How much is a repeat violation fine for OSHA? |
|
Definition
|
|
Term
| How much is it when there is a failure to correct an OSHA violation? |
|
Definition
|
|
Term
| What does the Family and Medical Leave Act entail? |
|
Definition
-12 weeks in a 12 month period of unpaid leave
-must have been full time for a year before.
-Company must have 50 or more employees for 20 or more weeks a year
-Limited to serious illness, injury, mental conditions, certain continuing treatments |
|
|
Term
| When can 12 week leave be denied to employees? |
|
Definition
| If they are the upper 10% of upper level employees |
|
|
Term
| What qualifies companies for the Drug Free Workplace Act? |
|
Definition
| -company must do more than 25,000 a year |
|
|
Term
| How much is worker compensation usually? |
|
Definition
| 2/3 the amount of the normal pay check |
|
|
Term
| What percentage do women get paid in compared to men? |
|
Definition
|
|
Term
| What must a consumer prove for false advertisement? |
|
Definition
-misrepresentation of material fact
-knowledge by seller that info is false
-seller's intent that consumer rely on misrepresentation
-consumer's justified reliance on the misrepresentation.
-Damage to the consumer |
|
|
Term
| What will be difficult for a consumer to win in regards to a false advertisement? |
|
Definition
|
|
Term
| What is the statutory remedy for false advertisement? |
|
Definition
-Express warranty under UCC
-Consumer must prove he reasonably relied on the advertisement.
-Seller usually proves consumer would have bought product w/o advertisement. |
|
|
Term
| What act gives sellers the right to sue other sellers for false advertisement about their products? What are the cases? |
|
Definition
Lanham Trademark Act
-Gillette v. Wilkinson Sword
-Coca Cola v. Tropicana |
|
|
Term
| What is the procedure for the FTC to engage in investigating consumer protection cases? |
|
Definition
-investigate
-informal at first
-often ends w/ target agreeing to stop
-if FTC determines basis for complaint, then more investigation
-defendant can settle, agree to consent, pay consumers, penalties
-if no agreement, then trial before ALJ
-Appeal to five member FTC
-FTC can also sue in US District Court |
|
|
Term
| What cases created the Employment at Will rule? |
|
Definition
Tennessee Supreme Court
Payne v Western |
|
|
Term
| What are some downsides to Employment at Will? |
|
Definition
| -Employers can fire employees for non work related stuff like being divorced or giving to certain charities. |
|
|
Term
| What cases cause the Employment at Will law to be chipped away and what were they about? |
|
Definition
Sabine Pilot Service v. Hauck
Phipps v Clarks Oil and Refining
-about employee getting fired for not breaking the law as told by the employer. |
|
|
Term
| What is the only state to offer comprehensive protection against Employment at Will? And what do they limit damages to? |
|
Definition
|
|
Term
| What states protect employees from being fired for legal recreational activities? |
|
Definition
| Colorado, New York, North Dakota |
|
|
Term
| Who does the whistleblower act apply to? |
|
Definition
|
|
Term
| What is fine schedule for OSHA? |
|
Definition
| 7,000 per violation per day and repeat violation is 70k per violation |
|
|
Term
|
Definition
| Family Medical Leave Act-12 weeks unpaid, must have been 1250 hours full time employee for prior year to qualify. |
|
|
Term
| What is the NRDC and what do they do? |
|
Definition
| National Resources Defense Council-pressures polluters into conformance. |
|
|
Term
| What was called the conservative president (environmental)? |
|
Definition
|
|
Term
| What does the antiquities act do? |
|
Definition
| declares historic objects to be national monuments |
|
|
Term
| What was the Tennessee Valley Authority made for? |
|
Definition
-helped control Tennessee river flooding
-provided electricity, recreation area, drinking water |
|
|
Term
| What is the NEPA? And what did it do? |
|
Definition
National Environment Policy Act,
-required all federal agencies to submit environmental impact statements
-instructed president Nixon to create a council on environmental quality |
|
|
Term
| Who created the EPAct and how was it done? |
|
Definition
|
|
Term
| What is the NAAQS and what are the primary and secondary levels? |
|
Definition
| National Ambient Air Quality Standards, Human protection and then protection to vegetation, climate, visibility, property |
|
|
Term
| What are the chemicals that the EPA sets specific standards for? |
|
Definition
Lead, carbon monoxide, ozone, nitrogen oxide, sulfur oxide (acid rain)
LCONS |
|
|
Term
| What is SIP and what does it do? |
|
Definition
State Implementation Plan
-divides states into air quality control regions AQCR |
|
|
Term
| What do states lose if they don't comply with AQCR? |
|
Definition
-lost of highway funds
-limitation on new sources of pollution |
|
|
Term
|
Definition
| Reasonably Available Control Technology |
|
|
Term
|
Definition
| Best available control technology |
|
|
Term
| What are the main controlled air pollutants? |
|
Definition
-Asbestos
-Mercury
-Benzene |
|
|
Term
| How much worse can indoor air be and what can it contain? |
|
Definition
100 times more
-construction materials
-radon gas |
|
|
Term
| What was the first clean water way act and what was it for? |
|
Definition
-River and Harbor Act
-put in place to limit logs from floating down rivers and sinking boats |
|
|
Term
| What was the second clean water act? |
|
Definition
| Federal Water Pollution Control Act |
|
|
Term
| What is the NPDES and what does it involve? |
|
Definition
National Pollutants Discharge Elimination System
-waterways
-lakes
-coastal waterways
-freshwater wetlands |
|
|
Term
| What does the clean water act amend and who is it administered by? |
|
Definition
-The Clean water act
-Water qualify act
--the EPA |
|
|
Term
|
Definition
| Best Practical Control Technology |
|
|
Term
|
Definition
| Best Available Control Technology |
|
|
Term
| Who issues permits for wetlands development? |
|
Definition
|
|
Term
|
Definition
| Marine Protection, Research and Sanctuaries ACt |
|
|
Term
| What are the penalties for MPRSA? |
|
Definition
| 50,000 and imprisonment for up to a year or both |
|
|
Term
| What is the OPA and what caused it to come into effect? |
|
Definition
Oil Pollution Act
-Exxon Valdez dumping oil in Alaskan ocean |
|
|
Term
| What are the penalties for oil spills? |
|
Definition
| 1000 per barrel spilled, 25000 per day |
|
|
Term
| What does the Safe Drinking Water Act entail? |
|
Definition
-authorized the EPA to establish drinking water standard
-states are primarily responsible for enforcement, if not then EPA steps in |
|
|
Term
|
Definition
| the Federal Insecticide, Fungicide, and Rodenticide Act |
|
|
Term
| What are the penalties for registrants or producers under FIFRA? |
|
Definition
-1 year in jail
-fine of not more then 50,000 |
|
|
Term
| What are the penalties for commercial dealers under FIFRA? |
|
Definition
-1 year in jail
-fine of 25,000 |
|
|
Term
| What are the penalties for private users under FIFRA? |
|
Definition
-30 days in jail
-fine of 1,000 |
|
|
Term
| What act governs the disposal and handling of hazardous solid waste and what does it entail? |
|
Definition
Resource Conservation and Recovery Act (RCRA)
-Decreases use of land containments
-Expanded coverage to new hazardous waste |
|
|
Term
| What does RCRA stand for? |
|
Definition
| Resource Conservation and Recovery Act |
|
|
Term
| What are the fines under the RCRA? |
|
Definition
-50,000 per day of violation
-jail for two years
-or both
-fines and penalties are doubled for repeat offenders |
|
|
Term
| What does CERLA stand for and what does it entail? |
|
Definition
Comprehensive Environment Response, Compensation and Liability Act
-regulates the clean up of existing waste sites
-requires that producers of haz waste notify EPA and public on annual basis |
|
|
Term
|
Definition
| Nuclear Regulatory Commission |
|
|
Term
| What does the Nuclear Waste Policy Act do? |
|
Definition
| selects and develops a permanent site of the disposal of nuclear wastes |
|
|
Term
| What are the fines for noise pollution? |
|
Definition
-50,000 per day
-two years in prison |
|
|
Term
| What is the most powerful and hated environmental law? |
|
Definition
|
|
Term
| How many members does the European union have? |
|
Definition
|
|
Term
| How much of China's GDP is produced by for profit firms? |
|
Definition
|
|
Term
| How much has China's economy grown every year since they joined the WTO in 2001? |
|
Definition
|
|
Term
| What are Brazil's main exports? |
|
Definition
| fruits, iron, bauxite, manganese |
|
|
Term
|
Definition
-Hong Kong
-China
-Singapore
-South Korea |
|
|
Term
|
Definition
| Newly Industrialized Economies |
|
|
Term
| Who are the nations that copied the 4 tigers? |
|
Definition
-Malaysia -Thailand -Indonesia -The Phillippines
MIIT |
|
|
Term
| What organizations are at the center of the foreign exchange markets? |
|
Definition
-Barclays
-Deutsche Bank
-Credit Suisse
-Citibank |
|
|
Term
| What are the main cities that currency trade is in and what are the secondary? |
|
Definition
Main: London, New York, Tokyo
Secondary: Sydney, Hong Kong, Singapore, Frankfurt, Bahrain, Zurich |
|
|
Term
| How much currency is traded on a daily basis around the world? |
|
Definition
|
|
Term
| What countries use the Flexible Exchange rate system? |
|
Definition
-US
-Japan
-Canada
-United Kingdom
-Switzerland
-Australia |
|
|
Term
| What countries use the Fixed Exchange system? |
|
Definition
-panama
-Oman
-Bahamas
-others |
|
|
Term
| How much did the US Import/Export in 2011? |
|
Definition
Import: 2,663 Billion or 18%
Export: 2,103 Billion or 14% |
|
|
Term
| What is contract manufacturing? |
|
Definition
| Hiring a firm in a foreign country to produce goods for your firm. (Nike) |
|
|
Term
| What are the 3 big MNCs from the Netherlands? |
|
Definition
|
|
Term
| What is the law of one price? |
|
Definition
| The price of a good in the long run must be equal in all markets except for the cost of getting the good from one market to another |
|
|
Term
| What is an "Ad Valorem" Tariff? |
|
Definition
| a tax evaluated on the good's value. |
|
|
Term
| What is a specific tariff? |
|
Definition
| a tax determined on a per unit basis (per pound) |
|
|
Term
| What is a compound tariff? |
|
Definition
| a tax based on a combination of value and unit amount of a good. |
|
|
Term
| What is a NQTNB and what does it entail? |
|
Definition
Non-quantitative and non tarrif barriers
-bases on economic, social or cultural reason to barrier from trade |
|
|
Term
| What are the forms to NQTNBs? |
|
Definition
-Product Testing and Standards
-Public procurement
-Local Purchase Requirement
-Access to Distribution Systems
-Regulatory Procedures
-Investment Controls |
|
|
Term
| What does Public Procurement entail? |
|
Definition
| when a country's government tries to bias their procurement of goods or services to favor local residents and firms. (12% preference to local businesses, 60% French broadcast requirement) |
|
|
Term
| How many allied nations sent someone to the Bretton Woods, New Hampshire delegation? |
|
Definition
|
|
Term
| What was the goal of Bretton Woods? |
|
Definition
| to construct a postwar international economic environment that would promote peace and prosperity |
|
|
Term
| What organizations did Bretton Woods create? |
|
Definition
-International Bank for Reconstruction and Development
-International Monetary Fund |
|
|
Term
| What does IBRD stand for? |
|
Definition
| International Bank for Reconstruction and Development |
|
|
Term
| What is International Bank for Reconstruction and Development also known as? |
|
Definition
|
|
Term
| What was the Marshall Plan? |
|
Definition
| The US's way to help non-communist countries rebuild after WWII |
|
|
Term
| What does the International Bank for Reconstruction and Development and the International Monetary Fund do today? |
|
Definition
| help promote economic growth and prosperity in less developed countries through low-interest, long term loans |
|
|
Term
| What does the International Monetary Fund IMF do? |
|
Definition
helps avoid the beggar-thy-neighbor policies enacted after WWI.
-Established new monetary system that fixed currency and ended in 71' |
|
|
Term
| What 4 countries did the IMF and IBRD help during the Asian monetary crisis and how much? |
|
Definition
100 Billion
-Indonesia
-Thailand
-The Philippines
-South Korea |
|
|
Term
| What countries did the IMF and IBRD help in the European Union and how much? |
|
Definition
103 Billion
-Ireland
-Greece
-Portugal |
|
|
Term
| What is the US's Generalization System of Preferences? |
|
Definition
| -a standard to allow the US to go outside of GATT to grant bilateral trade bias to LDCs |
|
|
Term
| What was GATT no successful in? |
|
Definition
|
|
Term
| How many members does the WTO have? |
|
Definition
|
|
Term
| What did the Information Technology Agreement from the WTO entail? |
|
Definition
eliminated trade barriers for
-telecommunication equipment
-computers
-software
-fax machines |
|
|
Term
| What is the Doha round of the WTO focused on? |
|
Definition
-reducing ag subsidies and tariffs
-liberalizing trade in services
-improving access of pharmaceutical products from LDCs |
|
|
Term
| What does GATS stand for and what does it entail? |
|
Definition
General Agreement on Trade in Servies
-landing rights for airlines situation |
|
|
Term
| What does TRIM stand for? |
|
Definition
| Trade Related Investment Measures Agreement |
|
|
Term
| What are the current issues being worked on in the WTO? |
|
Definition
| GATS, TRIM, TRIP, Agricultural |
|
|
Term
| What does TRIP stand for? |
|
Definition
| Trade Related Intellectual Property Rights |
|
|
Term
| What is the definition of a Custom Union? |
|
Definition
| free trade area plus members also adopt common trade policies toward non members |
|
|
Term
| What is the definition of a Common Market? |
|
Definition
| custom union plus members drop all barriers that hinder the free movement of labor, capital, and other factors of production among them |
|
|
Term
| What is the definition of a Economic Union? |
|
Definition
| common market plus intertwining deeper their economic integration by implementing similar economic policies |
|
|
Term
| What did the Treaty of Rome entail? |
|
Definition
-Created the European Economic Union
-Create a common Market |
|
|
Term
| What does EEC stand for and who all is involved? Who was added? |
|
Definition
European Economic Union
-France
-West Germany
-Italy
-Belgium
-Netherlands
-Luxembourg
ADDED in 70's
-Denmark
-Ireland
-UK |
|
|
Term
| What does EC stand for and how did it come about? Who was added to it? |
|
Definition
European Community
-came about from a name change of the ECC
-Greece, Spain, Portugal |
|
|
Term
| What was the Treaty of Maastricht about and what did it involve? Who got added to the EU? |
|
Definition
-Created a Economic Union
-Austria
-Finland
-Sweden
-Everyone else except Switzerland and Norway |
|
|
Term
| What are the 4 primary institutions of the EU? |
|
Definition
-European Council of Ministers(28 members)
-Commission of the EU(28 Members)
-Court of Justices (28 members)
-Parliament (736 Members) |
|
|
Term
| What was the weakest out of the 4 primary institutions of the EU? |
|
Definition
|
|
Term
| How are the justices selected for the Court of Justices in the EU and who have the most seats/second most? |
|
Definition
| Country wide elections and then by population for seats in the house. Largest with 99 seats is Germany and the UK, Italy and France have 78 |
|
|
Term
| Who is considered the most powerful of the 4 primary institutions of the EU? |
|
Definition
|
|
Term
| Who has the sole power to propose legislation in 4 the primary institutions of the EU? |
|
Definition
|
|
Term
| What are some examples of "Harmonization" and did it work? |
|
Definition
-UK ski instructors
-Tilde key on typewriters
--No, it did not work |
|
|
Term
| What is the Mutual Recognition rule about and what case brought it up? |
|
Definition
-if one member state recognizes a product as appropriate for sale then all must do so.
-Cassis de Dijon |
|
|
Term
| What act amended the Treaty of Rome and what did it amend? |
|
Definition
-Single European Act
-called for completion of the internal market by 92'
-required 279 regulatory changes |
|
|
Term
| What is the formal name for the treaty of Maastricht? List what this treaty did |
|
Definition
Treaty of European Union
-changed the name to the EU
-established common defense
-created cohesion fund(brings member economies of 90% less to same level as all)
-Created the Econ and Monetary Union |
|
|
Term
| What was the most important part of the Maastricht treaty and what does it involve? |
|
Definition
The creation of the Econ and Monetary Union
-created the Euro |
|
|
Term
| Who chose not to participate in the Econ and Monetary Union? |
|
Definition
|
|
Term
| Who of the newest members met the standard of the Econ and Monetary Union? |
|
Definition
| -Cyprus, Estonia, Malta, Slovakia, Slovenia |
|
|
Term
| How many members total participate in the Econ and Monetary Union? |
|
Definition
|
|
Term
| What bank controls the Euro monetary system? |
|
Definition
| European Central Bank in Frankfort |
|
|
Term
| Who were the members of the Mercosur Accord? Who joined later? |
|
Definition
Argentina, Brazil, Paraguay, Uruguay
-Bolivia and Chile |
|
|
Term
| Who are the members of the Andean Pact? |
|
Definition
| -Bolivia, Colombia, Ecuador, Peru, Venezuela |
|
|
Term
| What area of law is BACT, RACT and MACT used for? |
|
Definition
|
|
Term
| What area of law is BPCT and BACT used for? |
|
Definition
|
|
Term
|
Definition
|
|
