LAW 531 Final Exam Correct Answers
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3. Gath Meat Packing Company is a meat processing business. To reduce costs and<br />
increase profits, the president and CEO of Gath orders Gath’s employees to violate<br />
federal criminal meat processing laws. The United States Department of Justice<br />
prosecutes Gath for criminal violations of the meat processing law. Has Gath committed<br />
criminal violations?<br />
a) Yes, because the president and CEO, a high-level administrator of Gath, authorized the<br />
commission of the crimes.<br />
b) No, because the board of directors did not authorize the president and CEO or the other<br />
employees to violate federal law.<br />
c) No, because a corporation is not liable for most crimes committed by its agents.<br />
d) Yes, because a corporation is always liable for the crimes committed by its agents.<br />
4. For which of the following would a shareholder derivative action be appropriate?<br />
a) The shareholder alleges that the corporation has violated the shareholder’s preemptive<br />
right.<br />
b) The shareholder alleges that the board of directors has imprudently managed the<br />
corporation.<br />
c) The shareholder has refused a request that his/her accountant be permitted to look at<br />
the corporate accounting records.<br />
d) The shareholder alleges that the corporation has been paying dividends to a previous<br />
shareholder from whom the shareholder purchased his/her shares.<br />
<strong>Final</strong> <strong>Exam</strong> <strong>Answers</strong> just a click away <strong>LAW</strong> <strong>531</strong> <strong>Final</strong> <strong>Exam</strong> Study Guide<br />
5. To prove his or her due diligence defense under the Securities Act Section 11 with regard<br />
to audited financial statements, an officer of the issuer must prove which of the<br />
following?<br />
a) The officer had no intent to misstate or omit a material fact in the audited financial<br />
statements.<br />
b) The officer had no reason to believe the financial statements omitted or misstated a<br />
material fact.<br />
c) The officer made a reasonable investigation into the accuracy of the audited financial<br />
statements.<br />
d) The officer believed the financial statements did not omit or misstate a material fact.