Securities Law / Edition 3

Preface     v
Introduction     1
What is a Security     2
Statutory Definition     2
Investment Contract     3
Investment of Money     4
Common Enterprise     4
Expectation of Profits     5
Solely from the Efforts of Others     6
Unless the Context Otherwise Requires     8
World of Securities Law     12
New Deal Securities Statutes     12
Hierarchy of Regulation     14
Where to Find the Law     17
Government Publications     17
Private Publications     19
State Securities Regulation     20
Special Position of Securities Lawyers     21
Business Context of Securities Law     26
Reasons Companies Register Securities     26
Advantages of Registration or Being Publicly Held     26
Cashing In     26
Economy     27
Control     27
Creation of Liquidity     27
Prestige     28
Estate Planning     28
Executive Recruiting and Retention     28
Acquisitions     29
Disadvantages of Registration or BeingPublicly Held     29
Expense     29
Disclosure of Information     30
Freedom of Action     30
Income Expectations     30
Functions of Securities Firms     31
Underwriting     31
Acting as Dealer, Broker, and Market Maker     32
Investment Banking     33
Steps in a Registered Offering     33
What Can Be Done During Securities Act Registration     36
Types of Issuers     36
Securities Act Section 5     37
Prefiling Period     37
Scheme of the Statute     37
What Is an Offer     39
Statutory Definition     39
Conditioning the Market     40
General Exceptions     44
Special Situations     45
Waiting Period     46
Scheme of the Statute     46
What Is a Sale     49
Special Situations     50
Acquisitions     50
Spin-offs and "Free" Stock Offerings     52
Pledges     53
What Is a Prospectus     54
Indirect Offers     55
Exceptions     57
Preliminary Prospectus Delivery Requirements     58
Posteffective Period     59
Scheme of the Statute     59
Section 5(b) and Defective Prospectuses     61
Final Prospectus Delivery Requirements     63
Summary     65
How Securities Are Registered Under the Securities Act     67
Scheme of the Statute     67
Drafting a Registration Statement     68
Registration Statement Forms     68
Rules, Regulations, and Industry Guides     70
Getting the Job Done     72
Procedures of the Commission     74
Review and Comment Procedure     74
Delaying and Accelerating Effectiveness     75
Shelf Registration Under Rule 415     77
Refusal Orders, Stop Orders, and Withdrawal     78
Exemptions From the Registration Requirements     79
Scheme of the Statute     79
Private Placements     80
Intrastate Offerings     84
Statutory Exemption     85
Rule 147     87
Limited Offerings: Sections 3(b), 4(2), 4(6), and 28; Regulations A, D, CE and S; Rules 701, 801 and 802     87
Sections 3(b) and 28     87
Regulation A     88
Section 4(6)      88
Regulation D     89
Regulation D Exemptions     90
Regulation CE     91
Rule 701     92
Rules 801 and 802     92
Regulation S     92
Resales by Security Holders     93
Control and Restricted Securities     93
Public Resales Outside Rule 144     96
Sales of Control Securities     96
Sales of Restricted Securities     98
Public Resales Under Rule 144     101
Rule 144A and Other Private Resales     103
Liability for Violation of the Securities Act     105
Criminal and Other Governmental Actions     105
Civil Liability     108
Section 11     108
Section 12     111=970 14$lSection 12(a)(1)     111=970 14$lSection 12(a)(2)     111=970 14$lSection 12(b)     114
Section 15     114
Section 17(a)     114
Indemnification and Contribution     117
Commission's General Exemptive Authority and Registration and Reporting Under the Exchange Act     119
Commission's General Exemptive Authority     119
Exchange Act Securities Registration      120
Periodic Reporting Under the Exchange Act     121
Edgar     124
Foreign Corrupt Practices Act     124
Sarbanes-Oxley Act of 2002     125
Proxy Regulation     128
Exchange Act Section 14 and the Proxy Rules     128
How the Proxy System Works     129
Proposals of Security Holders     131
False or Misleading Statements     132
Materiality     132
Causation     133
Degree of Fault Required     135
Other Liability Issues     136
Tender Offers     138
Williams Act     139
What is a Tender Offer     140
Issues in Williams Act Litigation     142
Who May Bring Suit?     142=970 14$lSection 13(d)     143=970 14$lSection 14(e)     143
Conduct Proscribed by Section 14(e)     144
Other Liability Issues     146
Fraud and Related Issues Under Rule 10b-5 and the Sarbanes-Oxley Act     148
How It All Started And Where It's Gone     148
"In Connection With" Requirement     150
Reliance and Causation     154
"Purchaser-Seller" Requirement     155
Fault Required      156
Persons Subject to Trading Constraints     157
Issuers' Duty to Disclose     162
Materiality     164
Damages and Penalties     165
Statute of Limitations     167
Controlling Person Liability, Aiding and Abetting, and Conspiracy     168
Contribution     169
Fraud and Related Issues Under the Sarbanes-Oxley Act     169
Liability for Trading Profits Under Section 16(b) and the Sarbanes-Oxley Act     172
Section 16(b)     172
Persons Liable     173
Titles     174
Deputization     174
Beneficial Ownership     175
What is a Purchase or Sale     176
Timing of Purchases and Sales     177
Standing to Sue     178
Calculation of Profits     179
Sarbanes-Oxley Blackout Trading Prohibition     180
Exchange Act Regulation of the Securities Business     182
Regulation of Stock Exchanges and the NASD     182
Regulation of Brokers and Dealers     184
Margin Requirements     186
Market Manipulation and Stabilization     186
International Aspects of Securities Law     190
Internationalization of the Securities Markets     190
When and Where United States Laws Apply     191
Breadth of "Interstate Commerce"     191
Importance of Context     191
United States Registration Requirements     192
Securities Offered Abroad     193
Regulation S     193
Certain Press Communications     194
Website Postings     194
Outside the Safe Harbors     195
Securities of Foreign Issuers Offered in the United States     196
Exemptions from Securities Act Registration     196
Securities Act Registration by Foreign Issuers     197
Exchange Act Registration and Reporting by Foreign Issuers     197
Special Case of American Depositary Receipts     198
United States Antifraud Requirements     198
Judicial Attitude and Congressional Intent     198
"Conduct" and "Effects" Tests     199
Approach of the Restatement (Third)     199
Other Requirements of United States Law     200
Enforcement Matters     200
Table of Cases     203
Index     207