Securities Act of 1933
Gets securities in the hands of the public
Full and fair disclosure
Requires the delivery of a prospectus for the sale of new issues
Securities Exchange Act of 1934
A law governing the secondary trading of securities in the US; established the SEC (Securities and Exchange Commission). Regulates the secondary market
What securities are exempt from the 33 act
Us Gov
Municipal Securities
Intrasate offering
Reg A offering
Reg A offering
Limited size offering that cannot exceed 50 million
Also known as short form registration
Shares can be sold immediately
Shelf Registration
A procedure that allows firms to file one registration statement for several issues of the same security. 3 year period.
Do new issues of ADRs require registration with the SEC?
Yes
Wash sales and painting the tape
Trading securities to create the appearance of interest or liquidity with the intent to manipulate or deceive other investors
Want to sell stock at a higher price than it is right now, continue to sell and buy it back to mislead someone that it is a heavi
What % of shares are needed to be considered an insider
more than 10% of the outstanding shares of a company
Short Swing
An insider buys own company stock and turns around and sells it for a profit within 6 months of the purchase
Reg D Offering
Under 33 act that exempts private companies from filing requirements under certain conditions
cannot exceed 5000000
Must be accredited investor
Rule 506b
Traditional private placement, issuers can continue to conduct quiet private placement without using general solicitation.
Non accredited investors may participate
No more than 35 sophisticated investors, plus an unlimited amount of accredited investors
Rule 506c
May use general solicitation and advertising
All purchasers MUST be accredited
SEC Rule 144
Sets forth conditions under which a holder of Unregistered securities may make a public sale without filing a registration statement with the SEC
- Resale of Restricted (unregistered/non-registered) Stock
Selling short against the box holding period
Holding period on the long stock would be suspended until the short stock is covered
SEC Rule 144A
-Allows qualified institutional investors to trade private placements.
-These issues do not have to meet the strict information disclosure requirements of publicly traded issues.
-Would include insurance companies, banks, and trust funds
WOULD NOT INCLUDE
SEC Rule 145
Applies to to situations in which securities are being offered as a result of business combinations, such as mergers, acquisitions, consolidations, reclassifications of securities, or transfers of corporate assets
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