Securities Law 2
Terms
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- Securities act of 1934
- SEC was created, AKA The exchange act. Regulates the tradings and securities once they are issued.
- Foreign corrupt
- cant bribe an official
- investment co act
- if a co has >40% of its assets as securities it is an investment co
- securities investor protection act
- supervises the liquidation of brokerage firms that are in financial trouble and protect investors from losses up to 500 grand.
- scientor
- intent to decieve, state of mind
- penney reform act
- power to fine
- Underwriters
- investment banking firm purchases a securities issue from the issuer to sell to the public.
- fully underwritten
- investment bank can suffer
- best effort
- issuer can suffer
- private placement
- an exemption, 35 potential buyers "institutional investors"
- Intrastate offering
- must be residents of the state
- small business exemption: Reg a
- 5 million or less, offering circular (no audited financials)
- Small business exemption: Reg d
- 5 million or less, no circular if you sell to accredited investors
- rule 144
- exemption, restricted stosck. Cant turn it around and sell it for a period of time. Intrastate is 9 month and the rest is 1 year.
- control person liability
- anybody in control of a person liable is jointly and severally liable unless they had no knowledge of it.
- Over the counter market
- no physical facility and no membership qualifications. Broker dealers are market makers who buy and sell stocks directly from the public
- Exchange Market
- a securities market that has a physical facility and has members
- proxy solicitation
- a way for SH to vote without actually going to the meetings
- Williams act
- regulations for groundwork for the proxy solicitation
- 10b
- covers fraud of securities
- channel stuffing
- bringing the sales from the next quarter into this quarter to make it look like they hit their numbers
- selling with conditions
- if it goes on the financial statement it is fraud
- fraud on the market
- way to get around a class action. Saying all the SH relied on the Market
- short swing profit
- any profit made within a 6 month period and could be based on insider info.