Securities regulation : examples and explanations / Alan R. Palmiter.
2011
KF1440 .P25 2011 (Map It)
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Details
Author
Title
Securities regulation : examples and explanations / Alan R. Palmiter.
Published
New York : Aspen Publishers, [2011]
Copyright
©2011
Call Number
KF1440 .P25 2011
Edition
Fifth edition.
ISBN
9780735599574
0735599572
0735599572
Description
xxiv, 621 pages ; 26 cm.
System Control No.
(OCoLC)698361301
Note
Includes index.
Record Appears in
Gift
Purchased from the income of the Edith L. Fisch Fund
Gift

The Arthur W. Diamond Law Library
Purchased from the income of the Edith L. Fisch Fund
Table of Contents
Preface
xix
Acknowledgments
xxi
Special Notice
xxiii
ch. 1
Introduction to Securities Markets and Regulation
1
[§] 1.1
Securities Markets and Participants
2
[§] 1.1.1
Primary and Secondary Markets
2
[§] 1.1.2
Functions of Securities Markets
3
[§] 1.1.3
Participants in Securities Markets
4
[§] 1.1.4
Interconnection Among Financial Markets
6
[§] 1.1.5
New Technologies
8
Examples and Explanations
9
[§] 1.2
Efficiency of Public Stock Markets
13
Examples and Explanations
16
[§] 1.3
Federal Securities Regulation---Overview
19
[§] 1.3.1
Securities Act of 1933
20
[§] 1.3.2
Securities Exchange Act of 1934
21
[§] 1.3.3
Specialized Securities Laws
23
[§] 1.3.4
Securities and Exchange Commission
24
[§] 1.3.5
Evaluation of Mandatory Disclosure
29
[§] 1.4
Beyond Disclosure: Federal Incursions into Corporate Governance
32
[§] 1.4.1
Sarbanes-Oxley Act of 2002
32
[§] 1.4.2
Dodd-Frank Act of 2010
39
[§] 1.5
State Securities Regulation---State Blue Sky Laws
43
ch. 2
Definition of Security
47
[§] 2.1
Implications of Definition
48
[§] 2.2
Testing for a "Security"
49
[§] 2.2.1
Investment Contracts---The Howey Test
49
[§] 2.2.2
Risk Capital Test
51
[§] 2.3
"Securities" in Varying Contexts
51
[§] 2.3.1
Real Estate as Securities
52
[§] 2.3.2
Business Interests as Securities
53
[§] 2.3.3
Pension Plans as Securities
56
[§] 2.3.4
Notes as Securities
57
[§] 2.3.5
Bank Instruments as Securities
60
[§] 2.3.6
"Stock" as Security
60
Examples and Explanations
62
ch. 3
Materiality
79
[§] 3.1
Definition of Materiality
80
[§] 3.1.1
"Substantial Likelihood" Test
80
[§] 3.1.2
Who Is a Reasonable Investor?
81
[§] 3.1.3
Relationship of Materiality and Duty to Disclose
82
[§] 3.2
Materiality---Types of Information
82
[§] 3.2.1
Historical Information
83
[§] 3.2.2
Speculative Information
84
[§] 3.2.3
"Soft Information"
85
[§] 3.2.4
Information About Management Integrity
88
[§] 3.2.5
Social/Environmental Disclosure
90
[§] 3.2.6
Materiality in Different Contexts
91
[§] 3.3
Materiality in Context: "Total Mix" of Information
92
[§] 3.3.1
"Total Mix" Test
92
[§] 3.3.2
Safe Harbors for Forward-Looking Statements
94
Examples and Explanations
97
ch. 4
Registration of Securities Offerings
111
[§] 4.1
Distribution of Securities to Public Investors
112
[§] 4.1.1
Types of Public Offerings
112
[§] 4.1.2
Pricing and Commissions in a Public Offering
114
[§] 4.1.3
Documentation in a Public Offering
117
Examples and Explanations
119
[§] 4.2
Registration of Public Offerings
125
[§] 4.2.1
Section 5: The Heart of the Securities Act
126
[§] 4.2.2
Contents of Registration Statement
126
[§] 4.2.3
Preparation of Registration Statement
128
[§] 4.2.4
SEC Review (and Effectiveness) of the Registration Statement
129
[§] 4.2.5
Purchases During Registration
133
[§] 4.2.6
State Regulation of Public Offerings
134
Examples and Explanations
138
[§] 4.3
Managed Disclosure During Registration---"Gun Jumping"
145
[§] 4.3.1
Prefiling Period
149
[§] 4.3.2
Waiting Period
155
[§] 4.3.3
Posteffective Period
162
[§] 4.3.4
Summary of Gun-jumping Rules
168
Examples and Explanations
170
ch. 5
Exemptions from Securities Act Registration
191
[§] 5.1
Exempt Securities
192
[§] 5.2
Transaction Exemptions
194
[§] 5.2.1
Intrastate Offerings
195
[§] 5.2.2
Private Placements
197
[§] 5.2.3
Small Offerings
200
[§] 5.2.4
Regulation D
202
[§] 5.2.5
Issuer Exchanges
210
[§] 5.3
State Blue Sky Exemptions
211
Examples and Explanations
214
ch. 6
Securities Act Liability
239
[§] 6.1
Common Law of Misrepresentation
240
[§] 6.1.1
Common Law Deceit
240
[§] 6.1.2
Equitable Rescission
241
[§] 6.2
Section 12(a)(1): Violations of [§]5
243
[§] 6.2.1
Strict Liability
243
[§] 6.2.2
"Statutory Sellers"
243
[§] 6.2.3
Limitations Period
244
[§] 6.3
Section 11: Misrepresentations in Registration Statement
244
[§] 6.3.1
Section 11 Plaintiffs
245
[§] 6.3.2
Section 11 Defendants
246
[§] 6.3.3
Material Misinformation in Registration Statement
246
[§] 6.3.4
Culpability---Defenses and Limitations on Liability
247
[§] 6.3.5
Reliance
253
[§] 6.3.6
Loss Causation
253
[§] 6.3.7
Damages
254
[§] 6.3.8
Periods of Limitations and Repose
255
[§] 6.4
Section 12(a)(2): Misrepresentations in "Public" Offerings
256
[§] 6.4.1
Coverage
256
[§] 6.4.2
Section 12(a)(2) Defendants
258
[§] 6.4.3
Elements of [§]12(a)(2) Rescission Action
258
[§] 6.4.4
Periods of Limitations and Repose
260
[§] 6.5
Section 15: Liability of Control Persons
260
[§] 6.6
Section 17(a): Liability in SEC Enforcement Action
261
[§] 6.7
Liability Under State Blue Sky Laws
261
Examples and Explanations
263
ch. 7
Secondary and Other Postoffering Distributions
285
[§] 7.1
Definitions of Issuers, Underwriters, and Dealers
287
[§] 7.1.1
Agent "for Issuer"
289
[§] 7.1.2
Purchaser from Issuer "with a View" to Distribute
290
[§] 7.1.3
Underwriter for "Control Person"
291
[§] 7.2
Exemptions for Control and Restricted Securities
292
[§] 7.2.1
Rule 144: Secondary Distributions in Public Markets
293
[§] 7.2.2
Exemptions for Secondary Private Placements
297
[§] 7.3
Corporate Reorganizations and Recapitalizations
299
[§] 7.3.1
Issuer Exchanges
299
[§] 7.3.2
Fundamental Corporate Transactions---Rule 145
300
[§] 7.3.3
Downstream Sales and Spinoffs
301
[§] 7.3.4
Warrants, Options, and Conversion Privileges
301
[§] 7.4
Resales Under Blue Sky Laws
302
Examples and Explanations
303
ch. 8
Securities Exchange Act of 1934
319
[§] 8.1
Regulation of Securities Trading Markets
321
[§] 8.1.1
Regulation of Stock Exchanges
322
[§] 8.1.2
Regulation of Over-the-Counter Market
324
[§] 8.1.3
Alternative Trading Systems
324
[§] 8.1.4
Regulation of Collateral Market Participants
325
[§] 8.2
Regulation of Market Practices
325
[§] 8.2.1
Market Manipulation
325
[§] 8.2.2
Short Selling
327
[§] 8.2.3
Purchasing Securities on Margin
330
[§] 8.3
Regulation of Public Companies
331
[§] 8.3.1
Registration with the SEC
331
[§] 8.3.2
Periodic Disclosure
333
[§] 8.3.3
False or Misleading SEC Filings
336
[§] 8.3.4
Oversight of Corporate Misconduct
337
[§] 8.3.5
Corporate Governance Listing Standards
341
[§] 8.4
Proxy Regulation (A Summary)
344
[§] 8.4.1
Mandatory Disclosure in Proxy Solicitation
344
[§] 8.4.2
No Open-Ended Proxies
345
[§] 8.4.3
Shareholder Access
345
[§] 8.4.4
Liability for Proxy Fraud
346
[§] 8.5
Regulation of Tender Offers (A Summary)
347
[§] 8.5.1
Disclosure of 5 Percent Ownership
347
[§] 8.5.2
Disclosure in Tender Offer
348
[§] 8.5.3
Regulation of Substantive Terms of Tender Offer
349
[§] 8.5.4
Liability for Deception in Tender Offers
350
Examples and Explanations
350
ch. 9
Rule 10b-5
369
[§] 9.1
Rule 10b-5 Overview
369
[§] 9.1.1
History of Rule 10b-5
369
[§] 9.1.2
Some Essential 10b-5 Pointers
372
[§] 9.1.3
Private 10b-5 Actions and SEC Enforcement
374
[§] 9.1.4
Typical 10b-5 Cases
375
[§] 9.2
Scope of Private 10b-5 Action
376
[§] 9.2.1
Purchasers and Sellers: 10b-5 Standing
376
[§] 9.2.2
Primary Violators: 10b-5 Defendants
379
[§] 9.2.3
Fraud "in Connection with" Securities Transactions
382
[§] 9.3
Fraud Elements of Private 10b-5 Action
384
[§] 9.3.1
Material Deception
385
[§] 9.3.2
Scienter --- "Manipulative or Deceptive Device or Contrivance"
388
[§] 9.3.3
Reliance and Causation
392
[§] 9.3.4
Damages
394
[§] 9.3.5
Nature of 10b-5 Liability
398
[§] 9.4
Defenses in Private 10b-5 Action
399
[§] 9.4.1
Limitations and Repose Periods
399
[§] 9.4.2
In Pari Delicto Defense
401
[§] 9.4.3
Contribution and Indemnification
401
[§] 9.4.4
Contract Defenses
402
[§] 9.5
Comparison to Other Securities Fraud Remedies
403
[§] 9.5.1
Express Federal Remedies for Securities Fraud
403
[§] 9.5.2
State Law Remedies
408
[§] 9.5.3
Racketeer Influenced and Corrupt Organizations Act (Private RICO)
410
[§] 9.5.4
Arbitration and Private Ordering
411
Examples and Explanations
412
ch. 10
Insider Trading
427
[§] 10.1
Introduction to Insider Trading
428
[§] 10.1.1
Classic Insider Trading
428
[§] 10.1.2
Misappropriation of Information---Outsider Trading
428
[§] 10.1.3
Theories for Regulation of Insider Trading
429
[§] 10.2
Rule 10b-5 and Insider Trading
430
[§] 10.2.1
Duty to "Abstain or Disclose"
431
[§] 10.2.2
Insider Trading Primer
435
[§] 10.2.3
Outsider Trading---Misappropriation Liability
437
[§] 10.2.4
Remedies for Insider Trading
441
[§] 10.2.5
Regulation FD and Selective Disclosure
443
Examples and Explanations
446
[§] 10.3
Short-Swing Insider Profits: Disclosure and Disgorgement
456
[§] 10.3.1
Coverage of [§]16
456
[§] 10.3.2
Disgorging Short-Swing Profits---Mechanical Test
458
[§] 10.3.3
Special Interpretive Issues
459
[§] 10.3.4
Section 16(b) Litigation
463
[§] 10.4
Regulation of Insider Trading Under Sarbanes-Oxley / Dodd-Frank
464
[§] 10.4.1
Insider Trading During Pension Plan Trading Blackout
464
[§] 10.4.2
Reimbursement of Incentive Pay When Financials Misstated
465
Examples and Explanations
467
ch. 11
Regulation of Securities Industry
475
[§] 11.1
Capacities of Securities Professionals
477
[§] 11.2
Broker-Dealer Regulation
478
[§] 11.2.1
SEC and FINRA Supervision
479
[§] 11.2.2
Regulation in Public Offerings
480
[§] 11.2.3
Disclosure Responsibilities
482
[§] 11.2.4
Standards of Conduct
483
[§] 11.2.5
Enforcement of Customer Rights
492
[§] 11.2.6
Insurance of Customer Accounts
494
[§] 11.2.7
State Blue Sky Regulation
495
[§] 11.3
Investment Adviser Regulation
496
[§] 11.3.1
Definition of Investment Adviser
496
[§] 11.3.2
Federal Regulation of Investment Advisers
496
[§] 11.3.3
State Blue Sky Regulation
498
Examples and Explanations
498
[§] 11.4
Mutual Fund Regulation
509
[§] 11.4.1
What Is a Mutual Fund?
510
[§] 11.4.2
Mutual Fund Costs
512
[§] 11.4.3
Regulation of Mutual Funds
513
[§] 11.5
Private Fund Regulation
516
[§] 11.5.1
What Are Private Funds?
516
[§] 11.5.2
Regulation of Private Funds
517
[§] 11.6
Regulation of Credit Rating Agencies
518
[§] 11.6.1
Accountability of Credit Rating Agencies
519
[§] 11.6.2
Internal Controls in Credit Rating Agencies
520
[§] 11.6.3
Regulation of Credit Rating Agencies
520
ch. 12
Public Enforcement
523
[§] 12.1
SEC Investigations
524
[§] 12.1.1
Investigations: Formal and Informal
524
[§] 12.1.2
Investigative Powers
525
[§] 12.2
SEC Administrative Enforcement
526
[§] 12.2.1
SEC Administrative Enforcement Powers
527
[§] 12.2.2
SEC Disciplinary Powers
529
[§] 12.2.3
SEC Settlements and Consent Decrees
530
[§] 12.3
Judicial Enforcement: Injunctions and Other Remedies
531
[§] 12.3.1
Standard for Relief
531
[§] 12.3.2
Types of Relief
532
[§] 12.3.3
Effect of Injunction
533
[§] 12.3.4
Modification or Dissolution of SEC Injunctions
534
[§] 12.3.5
Statute of Limitations
534
[§] 12.4
Enforcement Against Securities Professionals
535
[§] 12.4.1
SEC Rules of Practice
535
[§] 12.4.2
Accountant Discipline
536
[§] 12.4.3
Lawyer Discipline
538
[§] 12.4.4
Reporting "Up the Ladder"
539
[§] 12.5
Criminal Enforcement
542
[§] 12.5.1
Use of Criminal Law in Securities Enforcement
542
[§] 12.5.2
Criminal Violations of Federal Securities Law
543
[§] 12.5.3
Securities Activities Creating Criminal Liability
544
[§] 12.5.4
Non-Securities Criminal Law Applied to Securities Activities
546
[§] 12.5.5
Sentencing of Individual and Corporate Offenders
549
[§] 12.5.6
Parallel Enforcement
550
[§] 12.6
State Enforcement
553
[§] 12.6.1
New York's Martin Act
553
[§] 12.6.2
Enforcement Actions Against Securities Firms
554
Examples and Explanations
555
ch. 13
U.S. Regulation of Cross-Border Securities Transactions
561
[§] 13.1
Offshore Offerings by U.S. Issuers (and Foreign Issuers)
561
[§] 13.1.1
Regulatory Dilemma
562
[§] 13.1.2
SEC Safe Harbors --- Regulation S
562
Examples and Explanations
569
[§] 13.2
Foreign Securities in the United States
577
[§] 13.2.1
Public Offerings of Foreign Securities
577
[§] 13.2.2
American Depositary Receipts (ADRs)
579
[§] 13.2.3
Private Placements and Rule 144A
582
[§] 13.2.4
Requirements for Foreign Issuers with U.S.-Traded Securities
582
Examples and Explanations
586
[§] 13.3
Extraterritorial Reach of U.S. Securities Laws
591
[§] 13.3.1
Securities Fraud Litigation
591
[§] 13.3.2
Federal Government Enforcement
595
Examples and Explanations
597
Table of Cases
605
Index
611