Legal English: Quiz 2 / 2012-01

I.    Mark the statements below true (T) or false (F):

1.  _____ The SEC fraud complaint against Countrywide does not charge that the company’s mortgage underwriting guidelines violated federal law.

2.   _____ The SEC action against Countrywide is within US District Court/Central District of California jurisdiction solely because the plaintiffs reside in that district.

3.   _____ The SEC seeks jail time for the three Countrywide executives being charged with fraud.

4.   _____ The Dodd-Frank Act, President Obama’s financial reform law, reduces SEC funding and enforcement authority.

5.  _____ Under Dodd-Frank, security-based swaps (SBS’s), or over-the-counter (OTC) securities, are defined as securities under SEC enforcement authority.

6.  _____ Dodd-Frank allows the SEC to bring fraud cases relating to transactions outside the US.

7.  _____ The Act repeals monetary incentives and employment protections for whistleblowers.

8.  _____ Dodd-Frank will take years to be fully implemented, as the law requires extensive rule-making by various agencies.

9.  _____ The new agencies created by Dodd-Frank will have examination and enforcement authority over all financial institutions.

10.  ____ The Dodd-Frank Act has been praised for adopting a strong version of the Volker Rule.

II.            Use words from the list below to complete the sentences that follow:

________________________________________________________________________

reporting / statute / conduct / bounty / complaint / practices

to mislead / to conceal / to pursue / to originate / to bring

entitled / forthcoming / lax / bankrupt / mortgage-backed

________________________________________________________________________

• The executives’ (1) __________, as well as the company’s (2) __________, caused the regulator to (3) __________ a fraud claim against them.
• Countrywide Financial was not (4) __________ with investors regarding how much risk it was taking.
• The SEC charges that, in their (5) __________, the defendants (6) __________  from investors how dependent their business model had become on the sale of (7) __________ securities.
• They also (8) __________ investors and analysts about how many sub-prime loans they were actually (9) __________ and how (10) __________ their lending criteria were.
• The law now allows for a __________ (11) to be paid to whistleblowers in some cases.

III.           Choose the best options for completing the statements below:

• Justice Kennedy (1) delivered / heard the opinion of the court in the case and, for the most part, all other justices (2) dissented / concurred.
• It is charged that company executives (3) engaged / sustained in fraudulent (4) enforcement / disclosures designed to hide from investors how (5) prudent / exposed they were.
• Countrywide’s business model was highly dependent on the sale of mortgages to the (6) prime / secondary market, and its (7) excessive / underwriting guidelines became extremely (8) wide / narrow.
• All (9) ill-gotten / pursuant gains from fraudulent conduct must be (10) challenged / disgorged.