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 FederalSecurities Statutes

Securities Act of 1933

Securities Act of 1933

Securities Exchange

Act of 1934

Securities Exchange

Act of 1934

Securities andExchange

Commission

Securities andExchange

Commission

Other securitieslaws

Other securitieslaws

22.3Registration Statement and

Prospectus The prospectusprospectus provides

information to potential investors

The registration statementregistration statement contains financial information

The statutory or formal formal prospectusprospectus 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