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Full-Text Articles in Securities Law
Law, Share Price Accuracy, And Economic Performance: The New Evidence, Merritt B. Fox, Randall Morck, Bernard Yeung, Artyom Durnev
Law, Share Price Accuracy, And Economic Performance: The New Evidence, Merritt B. Fox, Randall Morck, Bernard Yeung, Artyom Durnev
Michigan Law Review
Mandatory disclosure has been at the core of U.S. securities regulation since its adoption in the early 1930s. For many decades, this fixture of our financial system was accepted with little examination. Over the last twenty years, however, mandatory disclosure has been subject to intensifying intellectual crosscurrents. Some commentators hold out the U.S. system as the standard for the world. They argue that adoption by other countries of a U.S.-styled system, with its greater corporate transparency, would enhance their economic performance. Other commentators, in contrast, insist that the U.S. mandatory disclosure regime represents a mistake, not a model. These crosscurrents …
Pleading Under Section 11 Of The Securities Act Of 1933, Krista L. Turnquist
Pleading Under Section 11 Of The Securities Act Of 1933, Krista L. Turnquist
Michigan Law Review
The Securities Act of 1933 ("Securities Act") requires full and fair disclosure of the nature of securities sold in interstate and foreign commerce. Section 11 of the Securities Act prohibits false or misleading registration statements. It also provides buyers a private remedy for false or misleading statements against any signer of the registration statement, any partner or director of the issuer, any professional involved in preparing or certifying the statement, and any underwriter. The rule appears simple: if there is a material misstatement or omission in the registration statement, the buyer may sue the seller. Courts disagree, however, over how …
The Obsolescence Of Wall Street: A Contextual Approach To The Evolving Structure Of Federal Securities Regulation, Joel Seligman
The Obsolescence Of Wall Street: A Contextual Approach To The Evolving Structure Of Federal Securities Regulation, Joel Seligman
Michigan Law Review
As a matter of analytical style, this article illustrates a contextualist approach. For a considerable period of time, the dominant analytical style in corporate and securities .law has been a variant of economic, or law and economics, analysis. The virtue of this type of analysis is that it focuses on what its authors deem to be crucial variables and reaches conclusions derived from the core of a specific legal problem. The defect of this type of analysis is that so much is assumed or often assumed away.
Foreign Bribes And The Securities Acts' Disclosure Requirements, Michigan Law Review
Foreign Bribes And The Securities Acts' Disclosure Requirements, Michigan Law Review
Michigan Law Review
The Securities Act of 1933 and the Securities Exchange Act of 1934 require most major corporations to disclose to investors all material information concerning company operations. Although they were not intended to regulate the conduct of business, these disclosure obligations can have a deterrent effect upon improper corporate activities. The recent revelation that a significant number of corporations have been making bribes and similar payments abroad has created interest in the feasibility of employing the disclosure requirements to curtail this practice. This Note will show that, despite recent pressures for change, the Securities and Exchange Commission has continued to view …
Intrastate Offerings Under Rule 147, J. William Hicks
Intrastate Offerings Under Rule 147, J. William Hicks
Michigan Law Review
In an effort to publicize administrative and judicial interpretations of the exemption, to protect investors, and to provide more certainty in determining the parameters of section 3(a)(ll), the SEC has adopted rule 147. This Article, in three parts, will examine that rule. Part I is devoted to an explanation of the rule; it will indicate how the rule differs from earlier interpretations of section 3(a)(ll) and discuss the problems that the rule leaves unanswered. Part II will consider the interrelationships among the various sections of the rule, as well as interpretative issues that have not yet arisen under section 3(a)(ll). …
Securities-Purchaser Of Outstanding Shares Of Same Class As Registered Issue Cannot Bring Suit Under Section 11 (A) Of Securities Act--Colonial Realty Corp. V. Brunswick Corp., Michigan Law Review
Securities-Purchaser Of Outstanding Shares Of Same Class As Registered Issue Cannot Bring Suit Under Section 11 (A) Of Securities Act--Colonial Realty Corp. V. Brunswick Corp., Michigan Law Review
Michigan Law Review
The court in the principal case conceded that, as a matter of economic reality, the prospectus (which contained the alleged misstatement) affects, because of its wide circulation, the value of the shares outstanding at the time it is distributed, as well as that of the new issue which is the subject of the registration statement. Indeed, financial institutions, market experts, brokers, and dealers digest and analyze the prospectus, and their opinions inevitably affect market values of all outstanding stock. However, in light of the act's legislative history, its general scheme of regulation, and the language contained in its other provisions, …
The Federal Securities Act And The Locked-In Stockholder, Neil Flanagin
The Federal Securities Act And The Locked-In Stockholder, Neil Flanagin
Michigan Law Review
The Securities Act of 1933 is generally identified with Securities and Exchange Commission registration and the attendant disclosure for primary and secondary public offerings of securities. Because of the uncertain scope of the registration requirements, however, it has the practical effect of seriously restricting certain security holders in selling or dealing in their securities. Security holders so restricted may be underwriters themselves or persons considered to be underwriters for the particular transaction. The difficulties arise in determining which security holders are included within this class and which transactions by those parties are affected. It is to these problems that the …
The Expanding Jurisdiction Of The Securities And Exchange Commission: Variable Annuities And Bank Collective Investment Funds, John W. Erickson
The Expanding Jurisdiction Of The Securities And Exchange Commission: Variable Annuities And Bank Collective Investment Funds, John W. Erickson
Michigan Law Review
The Securities and Exchange Commission is presently attempting to assert jurisdiction over certain aspects of two industries traditionally exempt from federal securities regulation-insurance and banking. The SEC claims that two recently developed investment vehicles-variable annuities in the insurance field and pooled funds of managing agency accounts in the banking field-are virtually the same as mutual funds, which are subject to SEC regulation under the Investment Company Act of 1940. (A mutual fund is essentially a fund (usually in corporate form), the participants' contributions to which are collectively invested in a portfolio of securities, each participation representing a pro rata interest …
A Reappraisal Of The Role Of Disclosure, Robert L. Knauss
A Reappraisal Of The Role Of Disclosure, Robert L. Knauss
Michigan Law Review
The objective of this paper is to assess the current role of disclosure in its various aspects in security regulation. Following a brief description of the current uses of disclosure in securities regulation, there are separate sections describing and evaluating (1) the obligation of disclosure imposed on issuers at the initial sale of securities, (2) the obligation of disclosure resting on issuers if they have securities which are traded, and (3) obligations of disclosure imposed on parties in the securities business other than issuers. This last section includes obligations of insiders, broker-dealers, and investment advisers, as well as duties of …
Securities-Investment Advisers Act Of 1940-Antifraud Provisions Interpreted, Byron Bronston S.Ed.
Securities-Investment Advisers Act Of 1940-Antifraud Provisions Interpreted, Byron Bronston S.Ed.
Michigan Law Review
Defendant, Capital Gains Research Bureau, Inc., an investment advisory service, published a bulletin entitled "A Capital Gains Report," each issue of which advised approximately 5,000 subscribers as to the investment potential of a particular corporation's stock. On at least five occasions Capital Gains, and its president and sole stockholder, also a defendant, acquired some shares of a stock and, without revealing their interest therein, recommended its purchase in the bulletin. Following each recommendation, trading in the stock increased, the price rose, and, within a few days, defendants sold their shares at a profit. The Securities and Exchange Commission, alleging that …
Regulation Of Business - Securities Act Of 1933 - Sec Loses Fight To Regulate Variable Annuity, William J. Wise S.Ed.
Regulation Of Business - Securities Act Of 1933 - Sec Loses Fight To Regulate Variable Annuity, William J. Wise S.Ed.
Michigan Law Review
The defendant, Variable Annuity Life Insurance Company, regulated as a life insurance company by the District of Columbia, issued a contract which it termed an annuity, but which differed from a conventional annuity in certain important respects. Ordinary annuity premiums are invested in debt securities while the premiums paid on the variable annuity are invested in common stocks. Further, instead of benefit payments in fixed dollar amounts, the variable annuity's benefits fluctuate since the value of the fund from which they are paid is affected by changing stock prices and dividend policies. The SEC, claiming these provisions brought the contract …
Executive Compensation And Federal Securities Legislation, Myer Feldman, V. Henry Rothschild
Executive Compensation And Federal Securities Legislation, Myer Feldman, V. Henry Rothschild
Michigan Law Review
In this article we first consider the type of compensation plan or arrangement which must be registered with the Securities and Exchange Commission. We shall then outline the requirements for disclosing the plan and its terms, as imposed by federal securities legislation and administrative regulation thereunder.
Corporations - Securities Regulation - Material Misstatements Of Omissions Of Fact Under The Securities Act Of 1933, Eric E. Bergsten S.Ed.
Corporations - Securities Regulation - Material Misstatements Of Omissions Of Fact Under The Securities Act Of 1933, Eric E. Bergsten S.Ed.
Michigan Law Review
Plaintiff sued for rescission of his purchase of stock in a corporation under section 12 (2) of the Securities Act of 1933 (hereafter referred to as the act) alleging a material misleading statement of fact in the prospectus. The alleged misstatement was that defendant was an "underwriter (as defined pursuant to the Securities Act of 1933 as amended)." No further explanation of defendant's status and consequent obligation was made in the prospectus. Defendant had agreed in fact to be only a "best efforts" underwriter. The trial court found that the statement was misleading and material. On appeal, held, affirmed. …
Securities Regulation - Controlling Stockholders As "Issuers" Under The Securities Act Of 1933, Richard R. Dailey
Securities Regulation - Controlling Stockholders As "Issuers" Under The Securities Act Of 1933, Richard R. Dailey
Michigan Law Review
The Securities and Exchange Commission sought an injunction to restrain the corporate defendant, a brokerage company, and the individual defendant, its president and controlling stockholder, from selling stock in an oil company. At the time the stock was issued and sold, the individual defendant was also president and controlling stockholder of the oil company. No registration statement was in effect with reference to the stock,. which was sold through the mails in interstate commerce in violation of section 5 of the Securities Act of 1933. Section 5 of the act applies only to transactions by an "issuer, underwriter, or dealer." …
Corporations - Securities Regulation - Investment Contracts Under Securities Act Of 1933, James W. Beatty S.Ed.
Corporations - Securities Regulation - Investment Contracts Under Securities Act Of 1933, James W. Beatty S.Ed.
Michigan Law Review
Plaintiffs purchased tracts of twenty acres, part of a larger tract owned by the defendant, for the purpose of developing the tracts into small citrus groves. Plaintiffs also executed with defendant a care and management contract, whereby plaintiff was to give directions as to the marketing of the crops on the tract; the defendant management company was to follow these directions but would still supervise harvesting and marketing and would receive its compensation therefor. Plaintiff brought an action under the Securities Act of 1933 to impose civil liability for fraudulent misrepresentations and material omissions concerning the value of the land. …
Corporations - Securities Act Of 1933 - Stock Sale To Employees As A Public Offer, Paul B. Campbell S.Ed.
Corporations - Securities Act Of 1933 - Stock Sale To Employees As A Public Offer, Paul B. Campbell S.Ed.
Michigan Law Review
The Securities and Exchange Commission sued to enjoin defendant corporation from offering stock for sale to its employees without first complying with the registration requirements of the Securities Act of 1933. Defendant claimed that its offer was not a public offer and therefore it came under a class of transactions which were exempt from the registration requirements. The offer was made to about 500 of the company's 7,000 employees. The company classified the offer as one made only to ''key employees." The court of appeals affirmed the trial court's judgment for defendant. On certiorari, held, reversed, two justices dissenting. …
Loss: Securities Regulation, Arthur H. Dean
Loss: Securities Regulation, Arthur H. Dean
Michigan Law Review
A Review of SECURITIES REGULATION. By Louis Loss.
Securities Legislation - Civil Liabilities On Account Of False Registration Statement - Limitations Of Actions - Licenses, Michigan Law Review
Securities Legislation - Civil Liabilities On Account Of False Registration Statement - Limitations Of Actions - Licenses, Michigan Law Review
Michigan Law Review
Plaintiff, purchaser of stock in Condor Pictures, Inc., brought an action against the officers of the corporation and the auditors who certified the registration statement, to recover damages under section II of the Securities Act of 1933. The action was founded upon misrepresentations and omissions in the registration statement, concerning a lease made by Condor Pictures, Inc., which the auditors failed to set up as a contingent liability. The defendants at the time of the suit stipulated that the stock had no market value, but the plaintiff did not offer any evidence of the actual value of the stock beyond …
Securities Legislation - Securities Act - Stop Order Proceedings - Administrative Tests Of Materiality, Bertram H. Lebeis
Securities Legislation - Securities Act - Stop Order Proceedings - Administrative Tests Of Materiality, Bertram H. Lebeis
Michigan Law Review
With a view toward correcting many of the abuses which had accompanied the distribution of securities, the Congressional mandate embodied in the Securities Act of 1933, together with the regulations of the Securities and Exchange Commission adopted in pursuance thereof, require the publication of much information previously withheld from the investing public. The basic objective of the act is the full disclosure of every essentially important element attending issues of securities in interstate commerce or through the mails, and to that end the commission is empowered to issue a stop order suspending the effectiveness of a registration statement if it …
Administrative Law - Investigating Powers Of Federal Commissioners - Securities And Exchange Commission, Brackley Shaw
Administrative Law - Investigating Powers Of Federal Commissioners - Securities And Exchange Commission, Brackley Shaw
Michigan Law Review
A recent decision in the Circuit Court of Appeals upholding the constitutionality of the powers of search granted to the Securities and Exchange Commission in the Securities Act of 1933 brings to the fore again the question of the extent to which the Federal Government may validly investigate and demand the production of the books and records of private businesses.
Corporations -Liability Of Broker On Misleading Circulars
Corporations -Liability Of Broker On Misleading Circulars
Michigan Law Review
The possibilities of civil and criminal liability under the recent Securities Act of 1933 and the Securities Exchange Act of 1934 have caused considerable fear to those business groups which take part in the business of issuing and transferring corporate securities. The federal acts do subject the vendor of securities who induces sales by means of false or misleading prospectuses and circulars to a possibility of civil liability which was not present under the common law. In a recent Michigan case, the court reached substantially the objectives sought by these acts by applying the existing rules of common law in …