GUEST LECTURER BOB GHOORAH
Securities laws are a regulatory framework that apply whenever a security is sold or
offered for sale. They impose disclosure obligations on the seller, to prevent fraud,
provide the buyer with material information.
Securities Act of 1933 (Federal)
Exchange Act of 1934 (Federal)
Duty of loyalty (state law)
Duty of care (state law)
What is a security?
Limited Partnership interests
From the 1933 Act:
The term "security" means any note, stock, treasury stock, security future, bond,
debenture, evidence of indebtedness, certificate of interest or participation in any profit-
sharing agreement, collateral-trust certificate, preorganization certificate or subscription,
transferable share, investment contract
, voting-trust certificate, certificate of deposit for a
security, fractional undivided interest in oil, gas, or other mineral rights, any put, call,
straddle, option, or privilege on any security, certificate of deposit, or group or index of
securities (including any interest therein or based on the value thereof), or any put, call,
straddle, option, or privilege entered into on a national securities exchange relating to
foreign currency, or, in general, any interest or instrument commonly known as a
"security", or any certificate of interest or participation in, temporary or interim
certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase,
any of the foregoing.
“Investment contract” = investing money in business with expectation to profit from the
efforts of others.
Example: limited partnership interest.
Securities Act of 1933
the first federal law to regulate new issues (example IPOs)
previously various state laws existed
provide investors with true and complete information about the issuer
Requires issuers to file registrations statements (usually S-1)
And provide investors with a prospectus