ACFE CFE - Law (Certified Fraud Examiner - Law) Practice Test 8

Question 70

Counsel reviewing a historic procurement case identifies two constitutional limits. (1) Prosecutors wish to apply a newly enacted criminal penalty to bidding conduct that was lawful when it occurred; which prohibition is potentially triggered? (2) After a final acquittal of the same federal offense, federal prosecutors propose a second trial based solely on newly discovered records; which protection is implicated? Choose TWO.

  1. Ex post facto ban
  2. Privilege against self-incrimination
  3. Double-jeopardy protection
  4. Presumption of innocence

Explanation

Correct Answers

A:

U.S. constitutional ex post facto protection restricts retroactive criminal punishment, separate from ordinary changes to civil procedure; it specifically answers numbered situation 1.

C:

The Fifth Amendment generally limits a second prosecution for the same offense by the same sovereign after a qualifying jeopardy event; it specifically answers numbered situation 2.

Incorrect Answers

B:

The Fifth Amendment safeguards against compelled testimonial self-incrimination, with scope and exceptions determined by law; the separate questions call for ex post facto ban and double-jeopardy protection, while no prompt asks for this additional rule.

D:

A criminal accused is presumed innocent unless the government carries its burden; an accusation is not itself proof of guilt; the separate questions call for ex post facto ban and double-jeopardy protection, while no prompt asks for this additional rule.

Question 71

In a U.S. federal jury trial for document fraud, the court swears the jury and then dismisses it without a verdict. When did jeopardy ordinarily attach for purposes of analyzing whether a new trial is permissible?

  1. When investigators first interviewed the suspect
  2. When the jury was empaneled and sworn
  3. When the charging document was filed
  4. Only when a verdict of guilty was returned

Explanation

Correct Answer

B:

In a jury trial, jeopardy generally attaches once the jury is empaneled and sworn; whether a later retrial is barred depends on additional circumstances.

Incorrect Answers

A:

An interview precedes criminal trial proceedings and does not itself trigger the trial-specific jeopardy attachment rule.

C:

Filing an indictment or information starts formal charges but does not ordinarily mark attachment in a jury trial.

D:

Protection begins before the verdict; its application to a mistrial depends on consent, necessity and other rules.

Question 72

A suspect is pressured to testify against themself in a U.S. criminal proceeding. Which protection is central?

  1. Presumption of innocence
  2. Ultra vires action
  3. Ex post facto ban
  4. Privilege against self-incrimination
  5. Double-jeopardy protection

Explanation

Correct Answer

D:

The Fifth Amendment safeguards against compelled testimonial self-incrimination, with scope and exceptions determined by law.

Incorrect Answers

A:

A criminal accused is presumed innocent unless the government carries its burden; an accusation is not itself proof of guilt; privilege against self-incrimination addresses the distinct legal requirement stated in the facts.

B:

An agency acts beyond its powers if it exceeds lawful statutory or constitutional authority, regardless of its preferred policy outcome; privilege against self-incrimination raises a different threshold from this alternative.

C:

U.S. constitutional ex post facto protection restricts retroactive criminal punishment, separate from ordinary changes to civil procedure; that concept must be distinguished from Privilege against self-incrimination here.

E:

The Fifth Amendment generally limits a second prosecution for the same offense by the same sovereign after a qualifying jeopardy event; the circumstances point to Privilege against self-incrimination rather than that separate test.

Question 73

A public agency issues a final order with no clear authorizing statute. Which inquiry tests its authority?

  1. Administrative consent order
  2. Corporate indemnification limits
  3. Administrative procedural fairness
  4. Ultra vires action
  5. Statutory appeal of administrative order

Explanation

Correct Answer

D:

An agency acts beyond its powers if it exceeds lawful statutory or constitutional authority, regardless of its preferred policy outcome.

Incorrect Answers

A:

A regulator may resolve an enforcement matter by agreement imposing enforceable obligations without a full contested hearing; ultra vires action is the issue raised by the described conduct.

B:

Corporate law and public policy may restrict advancement or indemnification for certain misconduct even if internal documents promise it; the inquiry instead concerns Ultra vires action, with its own elements.

C:

Agency decisions must comply with governing procedures and applicable due-process protections even when substantive jurisdiction exists; the relevant step in this scenario is Ultra vires action.

E:

Agency review or appeal is available only on the terms and within the time limits supplied by relevant legislation; here the operative distinction is Ultra vires action.

Question 74

A regulator applies a valid rule to facts but disregards required notice-and-hearing protections. What concern arises?

  1. Administrative procedural fairness
  2. Statutory appeal of administrative order
  3. Ultra vires action
  4. Administrative consent order

Explanation

Correct Answer

A:

Agency decisions must comply with governing procedures and applicable due-process protections even when substantive jurisdiction exists.

Incorrect Answers

B:

Agency review or appeal is available only on the terms and within the time limits supplied by relevant legislation; those prerequisites should not be confused with Administrative procedural fairness.

C:

An agency acts beyond its powers if it exceeds lawful statutory or constitutional authority, regardless of its preferred policy outcome; administrative procedural fairness addresses the distinct legal requirement stated in the facts.

D:

A regulator may resolve an enforcement matter by agreement imposing enforceable obligations without a full contested hearing; administrative procedural fairness raises a different threshold from this alternative.

Question 75

A regulated firm challenges a sanction in federal court but bypassed a required agency appeals board that could have corrected the error. Which threshold issue may prevent immediate judicial review, subject to exceptions?

  1. Private arbitration as a substitute for an agency appeal mandated by law
  2. Exhaustion of available administrative remedies
  3. A criminal jury-verdict requirement before judicial agency review
  4. Corporate incorporation as an automatic bar to review of a regulator

Explanation

Correct Answer

B:

Where statute or governing doctrine requires exhaustion, a party ordinarily must use the specified agency review process before seeking judicial relief, unless an exception applies.

Incorrect Answers

A:

A private dispute clause does not necessarily displace the regulator's statutory review ladder; any required administrative remedy must be exhausted unless an exception applies.

C:

Judicial review of regulatory sanctions follows administrative and civil procedures; exhaustion concerns use of prescribed agency appeals, not the voting rules of a criminal jury.

D:

Legal entities can seek judicial relief where statutes grant it; being incorporated is not the threshold problem when the firm bypassed a required administrative appeal.

Question 76

A firm negotiates corrective conditions rather than contest an agency's proposed penalty. Which outcome is possible?

  1. Administrative procedural fairness
  2. Corporate indemnification limits
  3. Ultra vires action
  4. Statutory appeal of administrative order
  5. Administrative consent order

Explanation

Correct Answer

E:

A regulator may resolve an enforcement matter by agreement imposing enforceable obligations without a full contested hearing.

Incorrect Answers

A:

Agency decisions must comply with governing procedures and applicable due-process protections even when substantive jurisdiction exists; here the operative distinction is Administrative consent order.

B:

Corporate law and public policy may restrict advancement or indemnification for certain misconduct even if internal documents promise it; those prerequisites should not be confused with Administrative consent order.

C:

An agency acts beyond its powers if it exceeds lawful statutory or constitutional authority, regardless of its preferred policy outcome; administrative consent order addresses the distinct legal requirement stated in the facts.

D:

Agency review or appeal is available only on the terms and within the time limits supplied by relevant legislation; administrative consent order raises a different threshold from this alternative.

Question 77

A company's board considers indemnifying directors for claims about intentional misrepresentation. What governs permissibility?

  1. Corporate indemnification limits
  2. Avoidance of fraudulent transfer
  3. Derivative action
  4. Direct shareholder claim

Explanation

Correct Answer

A:

Corporate law and public policy may restrict advancement or indemnification for certain misconduct even if internal documents promise it.

Incorrect Answers

B:

Applicable insolvency law can permit recovery of certain transfers made with fraudulent intent or for inadequate value under specified conditions; that concept must be distinguished from Corporate indemnification limits here.

C:

A qualifying shareholder may sue on the corporation's behalf subject to standing and demand rules instead of simply claiming corporate loss as personal harm; the circumstances point to Corporate indemnification limits rather than that separate test.

D:

A direct claim seeks redress for a duty and injury owed to the investor personally, subject to statutory and pleading elements; corporate indemnification limits is the issue raised by the described conduct.

Question 78

A shareholder attempts to sue for injury suffered by the corporation rather than a distinct personal injury. Which route may be relevant?

  1. Confidentiality obligation
  2. Derivative action
  3. Direct shareholder claim
  4. Avoidance of fraudulent transfer
  5. Corporate indemnification limits

Explanation

Correct Answer

B:

A qualifying shareholder may sue on the corporation's behalf subject to standing and demand rules instead of simply claiming corporate loss as personal harm.

Incorrect Answers

A:

Private professional duties and applicable law may require restricted use and disclosure of sensitive investigation material; the relevant step in this scenario is Derivative action.

C:

A direct claim seeks redress for a duty and injury owed to the investor personally, subject to statutory and pleading elements; here the operative distinction is Derivative action.

D:

Applicable insolvency law can permit recovery of certain transfers made with fraudulent intent or for inadequate value under specified conditions; those prerequisites should not be confused with Derivative action.

E:

Corporate law and public policy may restrict advancement or indemnification for certain misconduct even if internal documents promise it; derivative action addresses the distinct legal requirement stated in the facts.

Question 79

A shareholder sues for direct misrepresentation made to them in a securities offering. Which category differs from derivative litigation?

  1. Corporate indemnification limits
  2. Corporate appraisal rights
  3. Derivative action
  4. Direct shareholder claim

Explanation

Correct Answer

D:

A direct claim seeks redress for a duty and injury owed to the investor personally, subject to statutory and pleading elements.

Incorrect Answers

A:

Corporate law and public policy may restrict advancement or indemnification for certain misconduct even if internal documents promise it; direct shareholder claim raises a different threshold from this alternative.

B:

Appraisal rights provide qualifying shareholders a process to challenge valuation in covered corporate transactions, rather than a personal fraud claim for direct misrepresentation in a securities offering.

C:

A qualifying shareholder may sue on the corporation's behalf subject to standing and demand rules instead of simply claiming corporate loss as personal harm; the circumstances point to Direct shareholder claim rather than that separate test.

Question 80

An insolvency administrator seeks to set aside an undervalue transfer by the debtor before bankruptcy. Which mechanism may apply?

  1. Avoidance of fraudulent transfer
  2. Derivative action
  3. Corporate indemnification limits
  4. Direct shareholder claim

Explanation

Correct Answer

A:

Applicable insolvency law can permit recovery of certain transfers made with fraudulent intent or for inadequate value under specified conditions.

Incorrect Answers

B:

A qualifying shareholder may sue on the corporation's behalf subject to standing and demand rules instead of simply claiming corporate loss as personal harm; the inquiry instead concerns Avoidance of fraudulent transfer, with its own elements.

C:

Corporate law and public policy may restrict advancement or indemnification for certain misconduct even if internal documents promise it; the relevant step in this scenario is Avoidance of fraudulent transfer.

D:

A direct claim seeks redress for a duty and injury owed to the investor personally, subject to statutory and pleading elements; here the operative distinction is Avoidance of fraudulent transfer.

Certified Fraud Examiner - Law (CFE - Law) Practice Tests