ch02 - Chapter 2 The Legal and Regulatory The Framework...

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The Legal and Regulatory The Legal and Regulatory Framework Framework 2 2 Chapter Chapter
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Chapter 2-2 Proposed M&A Activity Possible Applicable Laws and Regulations Federal Securities Law Insider Trading Laws Tender Offer / Merger Law Industry Specific Regulation Antitrust Law State Law International Regulation Examples Securities Act of 1933 Insider Trading Sanctions Act Williams Act of 1968 Clayton Act of 1914 FCC (telecom) PA: strong antitakeover laws EU Competition Commission
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Chapter 2-3 Canada Business Corporation Act Investment Canada Act Competition Act Ontario Securities Act Industry regulators: e.g. Canadian Radio- Television & Telecommunications Commission
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Chapter 2-4 Federal Securities Law Goals of Federal Securities Law Investors should be treated fairly Companies should fully disclose relevant information Standardized accounting and reporting to achieve a “fair playing field” New laws typically enacted after market crashes and/or scandals
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Chapter 2-5 Federal Securities Law Seven main pieces of federal legislation (most enacted after 1929 market crash) Securities Act of 1933 Securities Exchange Act of 1934 Public Utility Holding Company Act of 1935 Trust Indenture Act of 1939 Investment Company Act of 1940 Investment Advisers Act of 1940 Securities Investor Protection Act of 1970
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Chapter 2-6 Federal Securities Law More recent developments Securities Act Amendments of 1975 Shelf registration (Rule 415) [1982] Private Securities Litigation Reform Act (1995) Securities Litigation Uniform Standard Act of 1998 Sarbanes-Oxley Act of 2002
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Chapter 2-7 Operation of Securities Acts Securities Act of 1933 — recording of information Securities Exchange Act of 1934 Basis of later amendments applicable to takeover activities Established SEC to administer securities laws
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Chapter 2-8 Tender Offer Regulation — The Williams Act of 1968 Must file Schedule 13D within 10 days of acquiring 5% or more of any public company Public tender offer for ownership of more than 5% must file Schedule 14D Acquiring firms must disclose in Schedule 14D-1 intentions/business plans for target Section 14(d)(4)-(7) – regulates tender offer terms Target management — as advisors to shareholders must file Schedule 14D-9 with recommendations Section 14(e) prohibits deceptive practices in connection with tender offers
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Chapter 2-9 Insider Trading Three broad categories of insider trading regulation Rule 10b-5 — defines fraud, deceit Rule 14e-3 — insider trading in context of tender offer Insider Trading Sanctions Act of 1984 – more general – must give back profit
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This note was uploaded on 05/10/2011 for the course MGT D72 taught by Professor Chau during the Spring '11 term at University of Toronto.

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ch02 - Chapter 2 The Legal and Regulatory The Framework...

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