1- Frank wanted to have his firm, Krilx, Inc., raise a total of $7.5 million through a stock offering. The company plans to sell stock to a local insurance company in the amount of $5 million. The company will also sell $250,000 in stock to each of eight investors for a total of $2 million. The company will sell the remainder of the stock to five members of the board of directors and four officers of the company. Is the company required to register its offering or does it qualify for a registration exemption?

2- How does the "misappropriation theory" discussed in the U.S. v. O'Hagan case on page 899 of the textbook differ from what the Court calls "classic insider trading theory?" Does it seem "fair" or "just" to criminalize actions like those of Mr. O'Hagan who seems to have perhaps only "caught a lucky break?"