ch%2028 - Chapter 28 Investor Protection and Corporate...

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1 Chapter 28 Investor Protection and Corporate Governance Securities Regulation Ch 28: Learning Objectives 1. Identify the objective of the 1933 Securities Act, the 1934 Securities Exchange Act and the Sarbanes - Oxley Act 2. Define "investment contract." 3. Review an offering to determine whether it qualifies as exempt under the 1933 Securities Act. 4. Define "insider," and determine when rule 10b-5 or section 16(b) applies to transactions by those parties. 5. Identify the two theories under which the actions of "outsiders" may be regulated by rule 10b-5, and discuss the use of these theories relative to the objectives of the 1933 and 1934 Acts.
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2 Ch 28: Major Legislation • Two primary objectives of legislation: –Provide investors with more information to help them make buying and selling decision, –Prohibit deceptive, unfair and manipulative practices in the purchase and sale of securities. Ch 28: Major Legislation Securities Act of 1933 Governs initial sales Requires disclosure through registration The Securities Exchange Act of 1934 Applies to subsequent trading Provides for continuous periodic disclosures Prohibits fraud, manipulation Sarbanes Oxley Act of 2002 Increase corporate accountability through disclosure and penalties Creates the PCAOB
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3 What is a security? • The Statutory Definition
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This note was uploaded on 08/12/2011 for the course ECON 212 taught by Professor Shwritzer during the Spring '11 term at Alabama A&M University.

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ch%2028 - Chapter 28 Investor Protection and Corporate...

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