Source: https://www.lectlaw.com/files/lws16.htm
Timestamp: 2019-04-19 20:37:00+00:00

Document:
and sale of securities in interstate commerce.
by governmental bodies, banks, and insurance companies.
-- $4 exempts securities sold in certain types of transactions.
statements in the registration statement.
deceptive acts and practices in the sale of securities.
defining any of the Acts' provisions.
rules in the federal district court.
that has become effective ($15d)).
registration allows the firm to hold stock for deferred sale.
qualify for an exemption from registration in that state.
significance in the deliberations of the reasonable shareholder.
mix" of information made available.
subjective test (see page 64.) Otherwise, the test is objective.
whether the principals have directly held negotiations, etc.
would place on the withheld or misrepresented information.
never comment on something like that."
be an independent duty requiring its disclosure.
disclosure could jeopardize completion of the acquisition.
can simply claim that you cannot identify any known trends.
seldom exist". Congress could not have intended such a result.
of reasons may be actionable even though conclusory in form.
was by itself enough to make the solicitation an essential link.
standards embodied in the rule."
company. What do you have to reveal?
3) For new companies, if have other important people (i.e.
scientists), must reveal them also.
what type of disclosure they require.
the company IF you are sued.
-- Materiality of bribes might depend on the size of the bribe.
with its disclosure of one of the above events.
hold under options or otherwise.
family or firms in which such persons have specified interests.
director or nominee director of the registrant is a member.
material and should be disclosed.
pending claims to be disclosed.
-- Disclosure is generally adequate if the "basic facts"
appropriate to offer assertions that suit is without merit, etc.
success or magnitude can themselves be materially misleading.
whether they are qualified to exercise stewardship of the company.
-- SEC v. Jos. Schlitz Brewing Co.
controls sufficient to provide reasonable assurance that"
accounting for assets is adequately controlled.
dealing with self- dealing, fraud, or securities violations.
not reasonably likely to occur, no disclosure is required.
registration or exemption from certain procedures.
-- '33 Act defines security in $2-1.
-- SEC v. Koscot Interplanetary, Inc.
there is no pooling of investors' funds or interest.
investment contract may be present.
jury should decide the issue.
exercise meaningful partnership or venture powers.
partnership interests can be classified as a security.
that a transaction involves a security.
anticipated profits, is not sufficient to be labeled a security.
Here, it is a traditional stock, within the statutory definition.
venture powers. None of these factors are present here.
to establish the requisite "common trading" in an instrument.
have led a reasonable person to question this characterization.
rubric of "notes", which are securities.
provisions of both Acts .
issued or guaranteed by a domestic governmental entity or a bank.
offering's proceeds, and the manager of the sale (i.e.
issuer is known as the "gross spread."
broker-dealer participating in the distribution.
any time prior to the public offering and/or settlement date (i.e.
adverse event affecting the issuer.
regulations as may be necessary to carry out the provisions of"
terms" used in the Act.
in acquisitions of other businesses.
reports incorporated by reference into the registration statement.
the integrated disclosure system embodied in Forms S-2 and S-3.
do so or for whom no other form is available.
Form 10-K is incorporated by reference into the prospectus.
information as will be presented in a Form S-1 or S-2 prospectus.
-- In 1992, the SEC lowered the requirements for use of Form S-3.
history of twelve months rather than the former thirty-six months.
annual trading volume test has been eliminated.
information prepared pursuant to the form's specific requirements.
plans where stock is to be issued.
also meet the definition of small business issuer.
requirements for use of those forms.
requires certain others associated with the distribution (i.e.
the registration statement to avoid sharing that liability.
-- Feit v. Leasco Data Processing Equipment Corp.
intelligible description of the transaction.
effective 20 days after filing.
change with respect to the distribution.
issuer's voting stock held by nonaffiliates.
or any participant in the distribution.
nonconvertible preferred stock or nonconvertible debt security.
distributed prior to the broker or dealer becoming a participant.
or any public proceeding or examination under $8."
connection with a prospectus that complies with $10 of the Act.
import of the "directly or indirectly" language of each provision.
from $5 everyone, other than "an issuer, underwriter, or dealer."
in fact part of the selling effort.
release being considered an offer to sell a security.
these events to his customers.
because it is "in registration"
not do with respect to disclosure of information.
such selling efforts. (in combination with $2(10)).
upon the offering price. This is the preliminary prospectus.
public company for 3 years and not in default.
copy must be filed as an exhibit to the registration statement.
statement for the purposes of $11 liability.
ad", which is the publicity about registration.
sale or delivered after sale.
cannot be used after the registration statement becomes effective.
materials are accompanied or preceded by a final prospectus.
long as they are offering the security to the public.
in an inter-dealer quotation system of a registered SRO (i.e.
-- SEC v. Manor Nursing Center, Inc.
unlikely event they occur via radio or television.
obstruction of the staff's investigation.
declare and thereupon the stop order shall cease to be effective."
examination under $8? has been initiated.
date that the Commission determines.
appearing in the registration statement.
interest and the protection of investors.
securities to facilitate the distribution.
-- There are 13 exemptions to the rule.
shares are withdrawn from registration.
special selling efforts and selling methods."
public offering of the security.
offerings that are made "at market".
a price greater than the security's offering price.
the price at which the rights are so purchased.
register its offering under $5.
securities of U.S. and foreign issuers.
percent on their capital during the preceding three fiscal years.
effective when the state administrator so orders.
are registered or another exemption is available.
registered but also may be resold free of registration burdens.
and doing business within, such State or territory.
exemption unavailable to the entire offering.
conducted, the exemption should not be relied upon.
distribution thereafter sell to nonresidents.
it is important to try to figure out intent.
mails or instruments of interstate commerce in the distribution.
amount of his business within this same State.
branch offices in the state where the offering occurs.
holding period before securities may be sold to nonresidents.
-- are the offerings made for the same general purpose.
the principal or predominant business must be carried on there.
issuer must be within the state.
eliminating the need for underwriting.
issuer anticipates subsequent public trading in the securities.
denominations is evidence of a private offering.
would disclose. Thus, this transaction would not be exempt.
purchasers is no substitute for information.
-- Doran v. Petroleum Management Corp.
relies on the latter route. When the issuer relies on "access"
review of account statements and recommendations.
sophistication of the expert may be imputed to the offeree.
of restricted securities without the consent of the issuers.
-- This is a safer harbor for 4(2) exempt transactions.
pertaining to state registration applies.
investors; resale of securities is restricted.
securities is restricted. This is a safe harbor for 4(2).
on the manner of offering.
dealers, insurance companies, investment companies.
-- Entity Owned by Accredited Investors.
-- Mark v. FSC Securities Corp.
and jury could not determine whether investors were sophisticated.
2) the issuer reasonably believes this is the case.
least 50 percent beneficial owners.
for the purpose of purchasing securities in the offering.
-- In the Matter of Kenman Corporation, et. al.
offeror and the investors solicited for an offer.
offerings in the future may violate the rule.
prospective offerees' sophistication and financial circumstances.
over a relatively short period of time.
other consideration the issuer receives for the securities.
securities are offered for cash.
as determined by an accepted standard."
investors, no affirmative disclosure under Regulation D imposed.
material when unaccredited investors receive the material.
made with the SEC pursuant to the 1934 Act reporting requirements.
together with an audited balance sheer.
of the form the issuer is eligible to use.
last two years and audited balance sheets for the last two years.
provide such information without unreasonable effort or expense.
into the hands of underwriters.
securities of any issuer described in Rule 252 of Regulation A.
lost by virtue of the bad boy disqualifiers.
measuring compliance with the conditions of the safe harbor.
integrated with the offering if it is part of the same issue.
made for the same general purpose.
purchasers in the states lacking such procedures.
and therefore beyond the protection of the rule.
-- Similar to Regualation D, so not of much use today.
securities and may be used for primary or secondary offerings.
provisions of the securities laws remain applicable.
availability of an exemption for either or both of the offerings.
on whether they are within $2(11)'s definition of an underwriter.
exempts everyone except issuers, underwriters, and dealers.
direct or indirect underwriting of any such undertaking.
purchaser acquired the shares with a view to their distribution.
-- If held three years or more, probably investment intent.
any change in the purchaser's circumstances after their purchase.
sales to those who cannot "fend for themselves."
distribution of the control person's securities is an underwriter.
to regulation similar to that applied to issuers.
had unlawfully sold their shares publicly through underwriters.
sold in accordance with all the terms and conditions of the rule.
filed with the Commission concurrently with the sale.
factor in determining whether a person is an underwriter.
by that Act and the rules and regulations.
loss statement, which shall be reasonably current.
respective pledgors, donors or settlors.
than the issuer of such securities.
thatt are not affiliated with the institution.
would themselves be deemed to be qualified institutional buyers.
qualify as a riskless principal for purposes of the Rule.
riskless principal for a qualified institutional buyer.
securities, if they satisfy the qualifying test.
and is, therefore, entitled to the exemption.
within one of several possible exemptions.
any prospective buyer in this state .[is exempt].
[above] which is available only for ISSUER transactions.
reasonable belief that the purchaser takes with investment intent.
a dividend) does not involve the sale or offer to sell a security.
not involved in the sale of its securities.
convertible security, warrant, or option is being offered.
-- Reincorporations and Amendments of Articles and Indentures.
not substance, and registration is not required.
SHELLS AND SPIN-OFFS: CREATING "VALUE"
-- SEC v. Datronics Engineers, Inc.
solicitation undertaken in connection with the exchange.
involved for the purposes of $5 of the Act.
are determined according to paragraph (d) of Rule 144.
securitties need no exemption in order to resell their securities.
Common, or Single Trust Funds.
subject to the same standards/rules as are U.S. banks.
-- Common, Collective, and Single Trust Funds are exempt.
maturity at time of issuance does not exceed nine months.
to the "benefit" of any person.
regulation by insurance regulators at the state or federal level.
tthe issuer "assumes the investment risk under the contract."
that will not be changed more often than once a year.
small amount involved or the limited character of the offering.
amount of $1 million or more.
prepared, it must be made available to interested investors.
recognized municipal securities information repository.
the issuer at least as frequently as every nine months.
bought securities issued pursuant to that registration statement.
actual reading of the prospectus.
after the security was offered to the public.
omissions in its registration statement.
(6) every control person of the issuer.
-- The courts have refused to impose "aiding and abetting"
registration statement will not lie. (b)(1).
reasonable ground to believe" such information is inaccurate.
statement merely by reason of their involvement as experts.
required of "a prudent man in the management of his own property".
Violators are subject to joint and several liabilty.
upon the relative culpability of thevarious parties.
-- Escott v. BarChris Construction Co.
company might have large exposure.
are also officers or directors or otherwise treated as experts.
person is alleged to exist."
-- Akerman v. Oryx Communications, Inc.
and may not be charged to the defendants.
substantial factor was clearly against congressional intent.
within the time stated in the statute of limitations found in $13.
prove that he ever received the misleading prospectus."
-- $12(2) also provides the seller with a "quasi due diligence"
of the untruth or omission.
registration statement. Under 12, can be either written or oral.
only applies to registered offerings.
that $11 is not available to purchasers in the aftermarket.
invoke aiding and abetting theories. Under 10b-5, you can.
same access to information as do potential $11 defendants.
-- Wilson v. Saintine Exploration & Drilling Corp.
identical to the definition of seller under 12(2).
intentionally or with actual knowledge.
omission is not part of the plaintiff's case under 12(2).
or omission itself--played a role in the purchase.
of action as is 10(b)(5).
-- For some aspects of $17(a), a negligence standard suffices.
-- Most courts follow this decision from the 9th Circuit.
federal right in favor of the plaintiff?
implicit, either to create such a remedy or to deny one?
legislative scheme to imply such a remedy for the plaintiff?
-- Much of the emphasis is now on the second prong of that test.
-- SEC v. National Student Marketing Corp.
takes promptt steps to end the client's noncompliance.
abroad, if the earlier misrepresentations in the U.S.
would be sufficient to establish subject matter jurisdiction.
-- Bersch v. Drexel Firestone, Inc.
U.S. directly caused such losses.
HELD: Yes, since some activities took place in the U.S.
conduit for moneys received from the Fund.
the 8tth Circuit held that where defendants' conduct in the U.S.
commerce, the district court has subject matter jurisdiction.
-- Zoelsch v. Arthur Andersen & Co.
if reliance and damages occur elsewhere.
RESTATEMENT THIRD OF FOREIGN RELATIONS LAW OF THE U.S.
compliance with its laws or punish noncompliance.
-- What does plaintiff need to prove?
AMEX, and NASDAQ are generally regarded as efficient.
a showing of reliance or causation.
will be sufficient to rebut the presumption of reliance.

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