Scan0010.rtf

MODULE 22 FEDERAL SECURITIES ACTS AND ANTITRUST LA W 41. (c) Forms lO-K (annual reports) and lO-Q (quarterly reports) must be filed with the SEC. Forms 10K containing financial statements must be audited by independent public accountants. However, this is not true of Forms lO-Q which cover the first three fiscal quarters of each fiscal year of the issuer. The financial statements in 10-Qs must be reviewed by public accountants. 42. (b) When certain material events take place, such as a change in corporate control, the corporation covered under the 1934 Act must file Form 8-K, a current report, with the SEC within four days after the material event occurs. Answer (a) is incorrect because Burk Corporation must file Forms lO-K, annual reports, and Forms lOQ,.quarterly reports, whether or not a material event has taken place. Answer (c) is incorrect because there is no such exception provided. Answer (d) is incorrect because Rules 504, 505, and 506 under Regulation D apply to the initial issuance of securities under the Securities Act of 1933 and do not relieve Burk Corporation from the filing requirements with the SEC under the 1934 Act. 43. (c) Government creation of monopoly status through a patent is permissible under the antitrust law as long as no other anticompetitive conduct is involved, Loop Corporation is, therefore, entitled to sell the micropencil at a price determined by the normal competitive forces of supply and demand. A patent grants the holder a twenty-year exclusive right to market the product. The twenty years starts at the application date. For design patents, the period is fourteen years. Answer (a) is incorrect because prohibiting the retailers from selling competing products is an exclusive dealing agreement which is illegal where the effect is to substantially lessen competition in that market. Answer (b) is incorrect because tying agreements involving patented products are illegal per se if a substantial amount of business is involved. Answer (d) is incorrect because imposing a minimum resale price on the retailers is a vertical price fixing agreement which is also illegal per se. 44. (b) The R~binson-Patman Act prohibits price discrimination in interstate commerce of commodities of like grade and quality. A violation of the act exists if the effect of the price discrimination may be to substantially lessen competition or tend to create a monopoly. Therefore, all that Patman must do to maintain a suf~cient legal action is to allege that due to Robinson's pricing activities

t h e r e i s a r e a s o n a b l e p o s s i b i l i t y t h a t c o m p e t i t i o n m a y b e a d v e r s e l y a f f e c t e d . A n s w e r ( a )

i s i n c o r r e c t b e c a u s e P a t m a n d o e s n o t h a v e t o s h o w a c t u a l i n j u r y t o c o m p e t i t i o n ; P a t m a n m u s

t show that such discrimination may substantially lessen competition. Answer (c) is incorrect because Congress purposely adopted the Robinson-Patman Act to prevent unilateral price determination which has the resultant effect of les ening competition or tending to create a monopoly. Answer (d) is incorrect because the reasonableness of the prices charged is irrelevant. The issue is whether the price discrimination may substantially lessen competition or tend to create a monopoly.

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