| 9633014080 | Introduction (1) | - Federal securities laws are designed to protect investors from deceptive, unfair and manipulative practices when buying or selling securities. | | 0 |
| 9633025177 | Introduction (2) | - Securities are instruments such as corporate stock or limited partnership interests that evidence owenership or debt. | | 1 |
| 9634823261 | The Securities and Exchange Commission
"Defined" | - The securities and Exchange Act of 1934 created the SEC, an independent federal regulatory agency that administers federal securities laws | | 2 |
| 9634848116 | The Securities and Exchange Commission
"SEC basic functions" (1) | 1 - Interprets federal securities laws and investigates securities law violations | | 3 |
| 9634859791 | The Securities and Exchange Commission
"SEC basic functions" (2) | 2 - Issues new rules and amends existing rules | | 4 |
| 9634866753 | The Securities and Exchange Commission
"SEC basic functions" (3) | 3 - Oversees the inspection of securities firms, brokers, investment advisers, and ratings agencies | | 5 |
| 9634876414 | The Securities and Exchange Commission
"SEC basic functions" (4) | 4 - Oversees private regulatory organizations in the securities, accounting, and auditing fields. | | 6 |
| 9634885420 | The Securities and Exchange Commission
"SEC basic functions" (5) | 5 - Coordinates U.S. securities regulation with federal, state, and foreign authorities. | | 7 |
| 9634901198 | The Securities and Exchange Commission
"Updating the Regulatory Process" | - Use of internet (SEC now requires certain documents to be filed electronically)
- SEC now requires companies to make statements on potential climate impact. | | 8 |
| 9634928973 | The Securities and Exchange Commission
"The SEC's Expanding Regulatory Powers" | - Securities Enforcement Remedies and Penny Stock Reform Act of 1990.
- Securities Acts Amendments if 1990.
- Market Reform Act of 1990. | | 9 |
| 9634945066 | The Securities Act of 1933
"Defined" | - Securities Act of 1933 regulates solicitation, buying and selling of securities: stocks and bonds. | | 10 |
| 9634957721 | The Securities Act of 1933
"What is a Security" (1) | 1 - Preferred and common stocks, treasury stocks, bonds, debentures, and stock warrants. | | 11 |
| 9634964710 | The Securities Act of 1933
"What is a Security" (2) | 2 - Stock options, puts, calls, or other types of privilege on a security or on the right to purchase a security or a group of securities in national security exchange. | | 12 |
| 9634981901 | The Securities Act of 1933
"What is a Security" (3) | 3 - Notes, instruments, or other evidence of indebtedness, including certificates of interest in a profit-sharing agreement and certificates of deposit. | | 13 |
| 9634995092 | The Securities Act of 1933
"What is a Security" (4) | 4 - Any fractional undivided interest in oil, gas, or other mineral rights. | | 14 |
| 9635004266 | The Securities Act of 1933
"What is a Security" (5) | 5 - Investment contracts, including interests in limited partnerships and other investment schemes. | | 15 |
| 9635014392 | The Securities Act of 1933
"What is a Security" (6)
The Howey Test | 6 - Any transaction in which a parson: 1) invests 2) in a common enterprise 3) reasonably expecting profits 4) derived primarily from others' managerial or entrepreneurial efforts.
"SEC v. Howey, (1946)" | | 16 |
| 9635045821 | The Securities Act of 1933
"Registration Statement" | - Unless exempt, an offering must be registered before offered to the public.
- Issuing corporation must file a registration statement and prospectus with the SEC.
- A prospectus is later distributed to investors. | | 17 |
| 9635067395 | The Securities Act of 1933
"Registration Statement"
Contents of Registration Statement (1) | 1 - The securities being offered for sale, including their relationship to the registrant's other capital securities. | | 18 |
| 9635084242 | The Securities Act of 1933
"Registration Statement"
Contents of Registration Statement (2) | 2 - The corporation's properties and business (including a financial statement certified by an independent public accounting firm) | | 19 |
| 9635126973 | The Securities Act of 1933
"Registration Statement"
Contents of Registration Statement (3) | 3 - The management of the corporation, including all benefits, and any interests of directors or officers in any material transactions with the corporation must be disclosed. | | 20 |
| 9635136031 | The Securities Act of 1933
"Registration Statement"
Contents of Registration Statement (4) | 4 - How the corporation intends to use the proceeds of the sale | | 21 |
| 9635140404 | The Securities Act of 1933
"Registration Statement"
Contents of Registration Statement (5) | 5 - Any pending lawsuits or special risk factors. | | 22 |
| 9635148893 | The Securities Act of 1933
"Registration Statement"
Registration Process (WAITING PERIOD) | - Securities can be offered but not sold. All issuers can distribute a red herring prospectus, advertise with a tombstone ad, and a free-writing prospectus. | | 23 |
| 9635190039 | The Securities Act of 1933
"Registration Statement"
Registration Process (Post-effective Period) | - Securities can now be sold | | 24 |
| 9635193363 | The Securities Act of 1933
"Registration Statement"
Registration Process (Registration Process Review) | | | 25 |
| 9635223172 | The Securities Act of 1933
"Well-Known Seasoned Issuers" (WKSI) | - A WKSI has issued $1 Billion in securities during last 3 years, or $700 million outstanding stock in public hands
- Can file registration statement the same day they announce. | | 26 |
| 9635246381 | The Securities Act of 1933
"Exempt Securities & Transactions"
Regulation A Offerings (1) | - Up to $5 million in any twelve-month period is exempt from registration.
- An issuer must file a notice with SEC and Offer circular. | | 27 |
| 9635278695 | The Securities Act of 1933
"Exempt Securities & Transactions"
Regulation A Offerings (2) | - Companies can "test the waters" without actually selling securities.
- Can sell online. | | 28 |
| 9635292001 | The Securities Act of 1933
"Exempt Securities & Transactions"
Regulation D Offerings (Rule 504) | - Rule 504: up to $1 million during 12 months to accredited investors only. | | 29 |
| 9635309299 | The Securities Act of 1933
"Exempt Securities & Transactions"
Regulation A Offerings (Rule 505) | - Rule 505: up to $5 million during 12 months to both accredited and unaccredited investors. | | 30 |
| 9635315636 | The Securities Act of 1933
"Exempt Securities & Transactions"
Regulation A Offerings (Rule 506) | - Rule 506: Unlimited if no general solicitation and notice to SEC. Max of 35 unaccredited investors. | | 31 |
| 9635338221 | The Securities Act of 1933
"Exempt Securities & Transactions"
Resales and Safe Harbor Rules | - Generally, most securities can be resold without registration. | | 32 |
| 9635325667 | The Securities Act of 1933
"Exempt Securities & Transactions"
Resales and Safe Harbor Rules (Rule 144) | - Rule 144: Exempts restricted securities if certain conditions are met. | | 33 |
| 9635328287 | The Securities Act of 1933
"Exempt Securities & Transactions"
Resales and Safe Harbor Rules (Rule 144A) | - Rule 144A: Allows sale only to a qualified institutional buyer | | 34 |
| 9635532972 | The Securities Act of 1933
"Violations of the 1933 Act" (A) | - Intentional or negligent defrauding of investors by misrepresenting or omitting material information in the registration statement or prospectus. | | 35 |
| 9635546289 | The Securities Act of 1933
"Violations of the 1933 Act" (B) | - Criminal Penalties
- Civil Sanctions
- Defenses. | | 36 |
| 9635569015 | The Securities Act of 1933
"Violations of the 1933 Act" Defenses (1) | 1 - Statement or omission was not material. | | 37 |
| 9635571033 | The Securities Act of 1933
"Violations of the 1933 Act" Defenses (2) | 2 - Plaintiff knew about misrepresentation at sale. | | 38 |
| 9635580019 | The Securities Act of 1933
"Violations of the 1933 Act" Defenses (3) | 3 - Defendant exercised due diligence and believe statements were true. | | 39 |
| 9635586198 | The Securities Act of 1933
"Violations of the 1933 Act" Defenses Case | - Case 28.1 Litwin V. Blackstone Group, LP (2011). What information had Blackstone negligently omitted from the registration statement. | | 40 |
| 9635605721 | The Securities Exchange Act of 1934
"Defined" | - Provides for registration of securities exchanges, brokers, dealers, and national securities exchanges and associations.
- Applies to companies with $10 million in assets and 500 or more shareholders. | | 41 |
| 9635620212 | The Securities Act of 1934
"Section 10 b, SEC Rule 10b-5 and Insider Trading"
(Section 10b) | - Prohibits use of any manipulative or deceptive device or contrivance in violation of SEC rules and regulations. | | 42 |
| 9635644957 | The Securities Act of 1934
"Section 10 b, SEC Rule 10b-5 and Insider Trading"
(SEC Rule 10b-5) | - Prohibits fraud in connection with the purchase or sale of any security.
- Applicability of SEC Rule 10b-5: all cases concerning securities trading. | | 43 |
| 9635669298 | The Securities Act of 1934
"Section 10 b, SEC Rule 10b-5 and Insider Trading"
(Insider Trading) | - Goal of the 10b and 10b-5 is to prevent purchases or sale of securities on basis of information that is not available to the public. | | 44 |
| 9635682033 | The Securities Act of 1934
"Section 10 b, SEC Rule 10b-5 and Insider Trading"
(Disclosure Under SEC Rule 10b-5) | - Any material omission or misrepresentation in connection with the sale or purchase of security may violate Section 10b or SEC Rule 10b-5. | | 45 |
| 9635689318 | The Securities Act of 1934
"Section 10 b, SEC Rule 10b-5 and Insider Trading"
(Disclosure Under SEC Rule 10b-5) Examples 1 | - Examples of materials facts in disclosure.
- Fraudulent trading by broker, Dividend Change, Contract for sale of corporate assets. | | 46 |
| 9635706029 | The Securities Act of 1934
"Section 10 b, SEC Rule 10b-5 and Insider Trading"
(Disclosure Under SEC Rule 10b-5) Examples 2 | - Examples of materials facts in disclosure
- The new discovery, process, or product, Significant change in firms financial condition, Potential litigation against the company. | | 47 |
| 9635729449 | The Securities Act of 1934
"Section 10 b, SEC Rule 10b-5 and Insider Trading"
(Outsiders and SEC Rule 10b-5) | - Tipper/Tippee Theory: insider's fiduciary duty must be breached.
- Misappropriation Theory: One wrongfully obtains inside info and trades on it. | | 48 |
| 9635751616 | The Securities Act of 1934
"Insider Reporting and Trading-Section 16b" | - Requires recapture of all short-swing profits by insiders (those owning 10% of equities) to corporation.
- Applies to stocks, warrants, options, and securities. | | 49 |
| 9635784597 | The Securities Act of 1934
"Private Securities Litigation Reform Act of 1995" | - "Safe harbor" for publicly held companies that make forward-looking statements, such as financial forecasts.
- "Meaningful Cautionary Statements" protect against securities fraud. | | 50 |
| 9635803235 | The Securities Act of 1934
"Regulation of Proxy Statements, Section 14a" | - Whoever solicits a proxy must fully disclose all of the facts and which shareholders must vote. | | 51 |
| 9635808161 | The Securities Act of 1934
"Regulation of Proxy Statements" | - Section 14 (1) of the 1934 Act regulates the sale of proxies from shareholders of section 12 companies.
- Remedies for violations include injunctions to damages. | | 52 |
| 9643939542 | The Securities Act of 1934
"Violations of the 1934 Act" (1) | - Scienter is required to prove civil or criminal penalties under 10b and Rule 10b-5. | | 53 |
| 9643969293 | The Securities Act of 1934
"Violations of the 1934 Act" (2) Criminal Penalties | - Scienter not Required for Section 16b Violations.
- Criminal Penalties: 10b and rule 10b-5, a person faces $5 million and 20 years in prison, $25 million for partnership or corporation. | | 54 |
| 9644002905 | The Securities Act of 1934
"Violations of the 1934 Act" (3) Criminal Penalties | - Sarbanes-Oxley provides for 25 years in prison if willful. | | 55 |
| 9644014420 | The Securities Act of 1934
"Violations of the 1934 Act"
Civil Sanctions | - Both SEC and private parties can bring actions against violators under Insider Trading and Securities Fraud Enforcement Act
- Private parties may bring action for violations of 10b and Rule 10b-5. | | 56 |
| 9644044944 | State Securities Laws
"State securities laws are called "blue sky" laws"
Requirements | - Issuers must comply with federal and state securities laws.
- Not all states allow the same exemptions as federal government. | | 57 |
| 9644062181 | State Securities Laws
"State securities laws are called "blue sky" laws"
Concurrent Regulation | - Uniform Securities Act has been adopted in part by many states. | | 58 |
| 9644068720 | Corporate Governance | - Relationship between a corporation and its shareholders.
- Attempts at Alignment between Officers and Shareholders.
- Stock Options | | 59 |
| 9644092213 | Corporate Governance
"Goal is to Promote Accountability" | 1 - The audited reporting of financial conditions to evaluate managers.
2 - Legal protections for shareholders so that violators can be punished and victims can recover losses. | | 60 |
| 9644504745 | Corporate Governance
"Goal is to Promote Accountability"
Governance and Corporate Law (Board of Directors) | - Responsible to ensure all corporate officers are operating in best interests of shareholders. | | 61 |
| 9644532515 | Corporate Governance
"Goal is to Promote Accountability"
Compensation Committee | - Assess performance and design fair compensation systems. | | 62 |
| 9644542264 | Corporate Governance
"Sarbanes-Oxley Act of 2002" (1) | - Attempts to increase corporate accountability by imposing strict disclosure requirements and harsh penalties for securities violations.
- Applies to all public companies | | 63 |
| 9644554447 | Corporate Governance
"Sarbanes-Oxley Act of 2002" (2) | - Requires CEO's to take responsibility for accuracy of financial statements filed with SEC
- Requires independent auditor report except for smaller companies of less than $75 Million. | | 64 |
| 9644567008 | Corporate Governance
"Sarbanes-Oxley Act of 2002" (3) | - Public Company Accounting Oversight Board regulates public accounting firms. | | 65 |
| 9644579012 | Corporate Governance
"Sarbanes-Oxley Act of 2002"
Internal Controls and Accountability | - Direct federal corporate governance requirements. High-level managers must maintain internal controls and disclosures. | | 66 |
| 9644588758 | Online Securities Fraud | - the SEC is aggressively prosecuting internet fraud using traditional laws.
- Investment Scams
- Online Investment Newsletters and Forums. | | 67 |
| 9644619440 | Online Securities Fraud
"Ponzi Schemes" | - Offshore Fraud
- Risk-Free Fraud | | 68 |