Chapter 45 - Securities regulation. After completing this chapter, students will be able to: Define “security” and explain how issuances and issuers of securities are regulated, describe communication rules for a public offering of securities, list the securities act’s exemptions from registration, discuss liability for securities. | Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 10 History and Nature of Corporations Organization and Financial Structure of Corporations Management of Corporations Shareholders’ Rights and Liabilities Securities Regulation Legal and Professional Responsibilities of Auditors, Consultants, and Securities Professionals Corporations P A R T Securities Regulation P A E T R H C 45 Quality, at its broadest and most basic level, is the protection of the investor interest. This principle reaffirms a simple and salient truth – markets exist by the grace of investors. Arthur Levitt, Jr., former SEC chairman, Sept. 23, 1999 Learning Objectives Define “security” and explain how issuances and issuers of securities are regulated Describe communication rules for a public offering of securities List the Securities Act’s exemptions from registration Discuss liability for securities Warning: Once again, this is a very large and detailed chapter! In . | Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 10 History and Nature of Corporations Organization and Financial Structure of Corporations Management of Corporations Shareholders’ Rights and Liabilities Securities Regulation Legal and Professional Responsibilities of Auditors, Consultants, and Securities Professionals Corporations P A R T Securities Regulation P A E T R H C 45 Quality, at its broadest and most basic level, is the protection of the investor interest. This principle reaffirms a simple and salient truth – markets exist by the grace of investors. Arthur Levitt, Jr., former SEC chairman, Sept. 23, 1999 Learning Objectives Define “security” and explain how issuances and issuers of securities are regulated Describe communication rules for a public offering of securities List the Securities Act’s exemptions from registration Discuss liability for securities Warning: Once again, this is a very large and detailed chapter! In general, security means any investment of money in a common enterprise with an expectation of profits solely from efforts of others, including but not limited to: A short-term note, stock, treasury stock, security future, bond, debenture, investment contract, participation in any profit-sharing agreement, or fractional undivided interest in oil, gas, or mineral rights What is a Security? Securities Act of 1933 and Securities Exchange Act of 1934 have 3 purposes: Require disclosure of meaningful information about a security and its issuer to allow investors to make intelligent investment decisions Impose liability on those who make inadequate and erroneous disclosures of information Regulate insiders, professional sellers of securities, securities exchanges, and other self-regulatory securities organizations The Disclosure Laws The 1934 Act created the Securities and Exchange Commission (SEC) Empowered to investigate violations of securities laws and hold hearings to determine whether
