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Salgado, Mary Antonnete M. Corporate Finance

2012-0117 7:30 – 9:30 PM!edne"day

 Atty. #$de Cantoria"  Marc%

2&, 201&

MIDTERM EXAM

'.

(%ere are no ca$"e" o) action again"t t%e co*pany and t%e dealer +eca$"e alt%o$g%t%ere ere ario$" )al"e "tate*ent" in t%e pro"pect$", t%e ine"tor neer relied on t%e "aid

pro"pect$" in re)erence to t%e p$rc%a"e o) t%e "%are". 'n order )or t%e ca$"e o) action topro"per, it *$"t +e proen t%at "$c% act or o*i""ion )all" $nder Section 2 o) /ep$+lic Act

799 or t%e Sec$ritie" /eg$lation Code, %ic% proide" t%at a per"on, directly or indirectly,in connection it% t%e p$rc%a"e or "ale o) any "ec$ritie" to:

2.1. *ployed any deice, "c%e*e, or arti)ice to de)ra$d

2.2. +tain *oney or property +y *ean" o) any $ntr$e "tate*ent o) 

a *aterial )act o) any o*i""ion to "tate a *aterial )act nece""ary inorder to *a4e t%e "tate*ent" *ade, in t%e lig%t o) t%e circ$*"tance"

$nder %ic% t%ey ere *ade, not *i"leading or

2.3. ngage in any act, tran"action, practice or co$r"e o) +$"ine""%ic% operate" or o$ld operate a" a )ra$d or deceit $pon any per"on.

S$c% act o) t%e co*pany regarding t%e pro"pect$" a" not )ra$d$lent, deceit)$l and

*i"leading to t%e "tate*ent o) t%e *aterial )act a" to ind$ce t%e ine"tor to p$rc%a"e t%e"aid "ec$ritie". 'n )act, t%e ine"tor did not een +ot%er to read t%e pro"pect$" t%at a"

gien. (%$", t%ere i" no c%ance o) "$cce"" in p$r"$ing t%e clai* o) t%e ine"tor.

''.

 A. (%e pro"pect$" deliery re5$ire*ent to t%e ine"tor "%o$ld +e eli*inated +eca$"et%i" only "ere" an additional re5$ire*ent, %ic% *ay +e di"pen"ed it%. 't can +e

*aintained to +e condition precedent in regi"tering it% t%e Sec$ritie" and 6c%angeCo**i""ion, +$t can +e eli*inated a" to t%e deliery to t%e ine"tor, )or it *ay +e

re5$e"ted or in5$ired into i) t%e in)or*ation contained t%erein i" nece""ary in proiding

ine"ting and p$rc%a"ing deci"ion".

. (%e periodic di"clo"$re re5$ire*ent" and e"ta+li"%*ent o) a tr$e contin$o$"di"clo"$re "y"te* *ay +e repealed +eca$"e "$c% re5$ire*ent o$ld +e an inconenience to

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t%e co*pany in )$rt%er co*pliance o) t%e "aid re5$ire*ent. Co*panie" *ay )ail toi**ediately proide periodic )$ll di"clo"$re )or t%ey *ay lac4 "$))icient ti*e to go t%ro$g%

ol$*ino$" doc$*ent" and *y end $p it% "$pply in)or*ation +a"ed on e"ti*ate". 't *aynot +e e))icient )or t%e ine"tor" to rely on periodic di"clo"$re in)or*ation, e"pecially in

olatile *ar4et condition" and *ay ind $p it% ader"e re"$lt" in it" ine"ting deci"ion.

C. (%e a$to*atic e))ectiity o) regi"tration "tate*ent a)ter it" initial )iling, regardle""o) "$+"e5$ent a*end*ent" "%o$ld +e *odi)ied +eca$"e t%i" p$rport" t%e eli*ination o) eal$ation or a""e""*ent t%e pertinent doc$*ent" or in)or*ation t%at a" proided )or +y

t%e co*pany. (%i" o$ld gie an opport$nity to t%e co*panie" to *a4e )al"e di"clo"$re" int%e initial )iling to *a4e t%e co*pany *ore attractie and "$+"e5$ently a*end t%e

in)or*ation.

'''.

' o$ld adice *y client t%at t%e regi"tration re5$ire*ent co$ld +e aoided, proidedt%at t%e "elling o) "ec$ritie" o$ld )all $nder t%e e6e*pt tran"action" %ic% doe" not

proide )or t%e regi"tration. A" proided in Section 10 o) /A 799 or t%e Sec$ritie"

/eg$lation Code, t%e re5$ire*ent o) regi"tration $nder "$+"ection .1 "%all not apply to t%e"ale o) any "ec$rity in any o) t%e )olloing tran"action":

666

8c An i"olated tran"action in %ic% any "ec$rity i" "old, o))ered )or"ale, "$+"cription or deliery +y t%e oner t%ere)ore, or +y %i"

repre"entatie )or t%e oner" acco$nt, "$c% "ale or o))er )or "ale oro))er )or "ale, "$+"cription or deliery not +eing *ade in t%e co$r"e o) 

repeated and "$cce""ie tran"action o) a li4e c%aracter +y "$c% oner,or on %i" acco$nt +y "$c% repre"entatie and "$c% oner or

repre"entatie not +eing t%e $nderriter o) "$c% "ec$rity and 666

84 (%e "ale o) "ec$ritie" +y an i""$er to )eer t%an tenty 820

per"on" in t%e P%ilippine" d$ring any tele-*ont% period.

666

(%$", *y client can "ell "ec$ritie" )or t%e e6pan"ion o) %i" +$"ine"" proided t%at t%e"aid tran"action" are *ade $nder t%e e6e*ption" a" proided +y la.