22.1 Chapter 22 Securities Regulations © 2003 by West Legal Studies in Business/A Division of Thomson Learning Municipal Bond Stock Certificate

22.2 Major Federal Securities Statutes Securities Act of 1933 Securities Act of 1933 Securities Exchange Act of 1934 Securities Exchange Act of 1934 Securities and Exchange Commission Securities and Exchange Commission Other securities laws Other securities laws

22.3 Registration Statement and Prospectus prospectus  The prospectus provides information to potential investors registration statement  The registration statement contains financial information formal prospectus  The statutory or formal prospectus contains particular basic financial information

22.4 The IPO Registration Process  Prefiling period  Sales, preconditionning  Waiting period  Statutory offers, tombstone ads, red herring prospectus, formal oral offers, summary prospectus  Post-effective period  Actual sales begin

22.5 Exemptions from the 1933 Act Registratin  Intrastate exemption  Small issue exemption  Private placement exemption  Integration of exempt offerings  Resale restrictions

22.6 Disclosure  Periodic financial disclosure  Non-periodic disclosure  Electronic delivery of investor communications  Ethical consideration

22.7 Insider Trading  Why is insider trading unlawful?  Who is an insider?  What is inside information?  When is insider trading restricted as unlawful?  Where is the jurisdiction with authority to enforce insider trading law?

22.8 Insider Trading: Short Swing Profits  Insider trading profits made by specified insiders  Presumption that high-level insiders have access to confidential information  Two provisions:  Section 16(a)  Section 16(b)

22.9 Insider Trading Under SEC Rule 10b-5  Who is an “insider”?  Traditional/classical insider trading  Tipping liability  Temporary traders  The misappropriation theory  Tender offer insider trading

22.10 Proxy Solicitations and Tender Offers  Proxy statements  Proxy contests  Mandatory shareholder proxy proposals  Definition of “tender offer”  State tender offer regulations

22.11 Liabilities Under the Securities Laws  Securities Act liability  Liability for proxy and tender offer violations  Materiality  Securities litigation reform