Answer :
Final answer:
The violation of federal laws with regard to tender offers is the tender of stock in a short margin account that has been borrowed by a customer. The correct answer is D.
Explanation:
The violation of federal laws with regard to tender offers in this scenario is the tender of stock in a short margin account that has been borrowed by a customer. When stock is borrowed and then tendered in a short margin account, it violates federal laws because it involves using borrowed assets to participate in the tender offer. This can lead to improper manipulation of the market and is regarded as illegal.
The tender of stock in a short margin account that has been borrowed by a customer is a violation of federal laws with regard to tender offers. The question asks which of the following choices is a violation of federal laws with regard to tender offers. The correct answer is D. The tender of stock in a short margin account that has been borrowed by a customer.
This is prohibited under federal securities laws because in a short sale, the stock hasn't been actually owned by the seller; they have merely borrowed it to sell, with the intent to buy it back later at a lower price. Therefore, tendering borrowed stock misrepresents the seller’s actual stake in the company and could manipulate the tender offer result.
