LAWS 310 Securities and Exchanges Act

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LAWS 310 Securities and Exchanges Act
What was the purpose of the Securities and Exchanges Act of 1933 and do its…

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LAWS 310 Securities and Exchanges Act

LAWS 310 Securities and Exchanges Act

Discussions Week 4 All Students Posts – 35 Pages 

What was the purpose of the Securities and Exchanges Act of 1933 and do its provisions actually protect investors? Why or why not?  Are there sufficient safeguards in the law to ensure the veracity of the information companies provide in the prospectus?

Not all offerings of securities must be registered with the Commission. Some exemptions from the registration requirement include:

  • private offerings to a limited number of persons or institutions;
  • offerings of limited size;
  • intrastate offerings; and
  • securities of municipal, state, and federal governments.

By exempting many small offerings from the registration process, the SEC seeks to foster capital formation by lowering the cost of offering securities to the public. Is the CGC transaction a private offering or would it be considered a limited size?

“Offering” registrations are used to register securities before they are offered to investors. The registration of a security, a preliminary prospectus contains preliminary information that will be in the final prospectus. Included in registration statements are:

  • Description of Securities to be Registered
  • Use of Proceeds
  • Risk Factors
  • Determination of Offering Price
  • Potential Dilution
  • Selling Security Holders
  • Plan of Distribution
  • Interests of Named Experts and Counsel
  • Information with Respect to the Registrant (description of business, legal proceedings, market price and dividends on common equity, financial statements, Management Discussion and Analysis, changes in and disagreements with accountants, directors and executive officers, security ownership of certain beneficial owners and management and certain relationships and related transactions).

Does this affect your answer?  Why or why not….?