CHAPTER 33: SECURITIES REGULATION

Learning Objectives: Nature and Purpose of Laws Regulating Securities Initial Sales of Securities (1933 Act) Secondary Sales of Securities (1934 Act) Chapter 332 CHAPTER 33: SECURITIES REGULATION

1.Purpose of Securities Regulation 2.Approaches: A.Statutes B.Administrative Regulations C.State “Blue Sky” Laws Chapter 333 INTRODUCTION TO SECURITIES REGULATION

3.Initial Sales: Securities Act of 1933 (“1933 Act”) 4.Secondary Sales: Securities and Exchange Act of 1934 (“1934 Act”) 5.Securities and Exchange Commission (SEC) Chapter 334 INTRODUCTION TO SECURITIES REGULATION

1.Purpose of the 1933 Act 2.Main Goal: Disclosure 3.Underwriting Process 4.Definition of “Security” 5.Obligations under the 1933 Act: a.Registration Statement b.Prospectus Chapter ACT

6.Exempt Securities 7.Exempt Transactions: a.Need for Exempt Transactions b.Categories: i.Interstate Offering ii.Private Placement iii.Small Offering Exemption 8.Liability 9.Due Diligence Defense Chapter ACT

1.Purpose of the 1934 Act 2.Requirements: a.Registration b.Reporting 3.Proxy Solicitation a.Role of Proxies b.Regulation c.Proxy Contest Chapter ACT

4.Insider Trading a.Rule 10b-5 i.Essence: Type of Fraud ii.Basics b.“Insider” c.“Outsider” d.Elements of a 10b-5 Violation i.Misstatement or Omission ii.Material Information iii.Scienter iv.Reliance Chapter ACT

5.Short-Swing Profit Taking a.Section 16(b): i.Need ii.Requirements b.Imposition of Strict Liability c.Requirement to Disclose Chapter ACT

CHAPTER 33: SECURITIES REGULATION