BLAW Final Exam Ch. 19

Securities and Exchange Commission (SEC)

- all requirements have to be registered - protects investors - you want to know if the company is legitimate/profitable - you can go to jail for violation

Registration Statement

- you cannot sell any shares to corporations if SEC hasn't approved you - not guaranteed to make money - if privately held, you don't have to go through the SEC (only public)

Concurrent Regulation

Issuers must comply with both federal and state securities laws. Most duplicate regulations have been eliminated.

Required for State Law Securities

State securities laws apply mainly to intrastate transactions

Investment Newsletters

an investor may believe that information in an online newsletter is unbiased, when in fact fraudsters will directly profit by convincing investors to buy or sell particular stocks

Contents of the Registration Statement

• Securities being offered for sale, including their relationship to issuer's other securities • Corporation's properties and business • Management of the corporation • How the corporation intends to use proceeds of sale • Any pending lawsuits or special risk factors