Securities regulation : examples & explanations

A favorite among successful students, and often recommended by professors, the unique Examples & Explanations series gives you extremely clear introductions to concepts followed by realistic examples that mirror those presented in the classroom throughout the semester. Use at the beginning and midway through the semester to deepen your understanding through clear explanations, corresponding hypothetical fact patterns, and analysis. Then use to study for finals by reviewing the hypotheticals as well as the structure and reasoning behind the accompanying analysis. Designed to complement your casebook, the trusted Examples & Explanations titles get right to the point in a conversational, often humorous style that helps you learn the material each step of the way and prepare for the exam at the end of the course.

The unique, time-tested Examples & Explanations series is invaluable to teach yourself the subject from the first day of class until your last review before the final. Each guide:

helps you learn new material by working through chapters that explain each topic in simple language challenges your understanding with hypotheticals similar to those presented in class provides valuable opportunity to study for the final by reviewing the hypotheticals as well as the structure and reasoning behind the corresponding analysis quickly gets to the point in conversational style laced with humor remains a favorite among law school students is often recommended by professors who encourage the use of study guides works with ALL the major casebooks, suits any class on a given topic provides an alternative perspective to help you understand your casebook and in-class lectures

• Preface p. xix
• Acknowledgments p. xxi
• Special Notice p. xxiii
• Chapter 1 Introduction to Securities Markets and Regulation p. 1
• §1.1 Securities Markets and Participants p. 2
• §1.1.1 Primary and Secondary Markets p. 2
• §1.1.2 Functions of Securities Markets p. 3
• §1.1.3 Participants in Securities Markets p. 4
• §1.1.4 Interconnection Among Financial Markets p. 6
• §1.1.5 New Technologies p. 8
• Examples and Explanations p. 9
• §1.2 Efficiency of Public Stock Markets p. 13
• Examples and Explanations p. 16
• §1.3 Federal Securities RegulationuOverview p. 20
• §1.3.1 Securities Act of 1933 p. 20
• §1.3.2 Securities Exchange Act of 1934 p. 21
• §1.3.3 Specialized Securities Laws p. 24
• §1.3.4 Securities and Exchange Commission p. 25
• §1.3.5 Evaluation of Mandatory Disclosure p. 30
• §1.4 Beyond Disclosure: Federal Incursions into Corporate Governance p. 33
• §1.4.1 Sarbanes-Oxley Act of 2002 p. 33
• §1.4.2 Dodd-Frank Act of 2010 p. 40
• §1.5 State Securities RegulationuState Blue Sky Laws p. 44
• Chapter 2 Definition of Security p. 49
• §2.1 Implications of Definition p. 50
• §2.2 Testing for a "Security" p. 51
• §2.2.1 Investment Contracts ¿ The Howey Test p. 51
• §2.2.2 Risk Capital Test p. 53
• §2.3 "Securities" in Varying Contexts p. 53
• §2.3.1 Real Estate as Securities p. 54
• §2.3.2 Business Interests as Securities p. 55
• §2.3.3 Pension Plans as Securities p. 58
• §2.3.4 Notes as Securities p. 60
• §2.3.5 Bank Instruments as Securities p. 62
• §2.3.6 "Stock" as Security p. 63
• Examples and Explanations p. 65
• Chapter 3 Materiality p. 83
• §3.1 Definition of Materiality p. 84
• §3.1.1 "Substantial Likelihood" Test p. 84
• §3.1.2 Who Is a Reasonable Investor? p. 85
• §3.1.3 Relationship of Materiality and Duty to Disclose p. 86
• §3.2 Materiality - Types of Information p. 86
• §3.2.1 Historical Information p. 87
• §3.2.2 Speculative Information p. 89
• §3.2.3 "Soft Information" p. 90
• §3.2.4 Information About Management Integrity p. 93
• §3.2.5 Social/Environmental Disclosure p. 95
• §3.2.6 Materiality in Different Contexts p. 96
• §3.3 Materiality in Context: "Total Mix" of Information p. 98
• §3.3.1 "Total Mix" Test p. 98
• §3.3.2 Safe Harbors for Forward-Looking Statements p. 99
• Examples and Explanations p. 103
• Chapter 4 Registration of Securities Offerings p. 117
• §4.1 Distribution of Securities to Public Investors p. 118
• §4.1.1 Types of Public Offerings p. 118
• §4.1.2 Pricing and Commissions in a Public Offering p. 120
• §4.1.3 Documentation in a Public Offering p. 123
• Examples and Explanations p. 125
• §4.2 Registration of Public Offerings p. 131
• §4.2.1 Section 5: The Heart of the Securities Act p. 132
• §4.2.2 Contents of Registration Statement p. 133
• §4.2.3 Preparation of Registration Statement p. 135
• §4.2.4 SEC Review (and Effectiveness) of the Registration Statement p. 136
• §4.2.5 Purchases During Registration p. 140
• §4.2.6 State Regulation of Public Offerings p. 141
• Examples and Explanations p. 145
• §4.3 Managed Disclosure During Registrationu"Gun Jumping" p. 154
• §4.3.1 Prefiling Period p. 158
• §4.3.2 Waiting Period p. 163
• §4.3.3 Posteffective Period p. 170
• §4.3.4 Summary of Gun-jumping Rules p. 177
• Examples and Explanations p. 178
• Chapter 5 Exemptions from Securities Act Registration p. 199
• §5.1 Exempt Securities p. 200
• §5.2 Transaction Exemptions p. 202
• §5.2.1 Intrastate Offerings p. 203
• §5.2.2 Private Placements p. 206
• §5.2.3 Small Offerings p. 209
• §5.2.4 Regulation D p. 211
• §5.2.5 Crowdfunding p. 222
• §5.2.6 Issuer Exchanges p. 227
• §5.3 State Blue Sky Exemptions p. 227
• Examples and Explanations p. 231
• Chapter 6 Securities Act Liability p. 257
• §6.1 Common Law of Misrepresentation p. 258
• §6.1.1 Common Law Deceit p. 258
• §6.1.2 Equitable Rescission p. 260
• §6.2 Section 12(a)(1): Violations of ?5 p. 261
• §6.2.1 Strict Liability p. 261
• §6.2.2 "Statutory Sellers" p. 261
• §6.2.3 Limitations Period p. 262
• §6.3 Section 11: Misrepresentations in Registration Statement p. 262
• §6.3.1 Section 11 Plaintiffs p. 263
• §6.3.2 Section 11 Defendants p. 264
• §6.3.3 Material Misinformation in Registration Statement p. 264
• §6.3.4 Culpability - Defenses and Limitations on Liability p. 265
• §6.3.5 Reliance p. 271
• §6.3.6 Loss Causation p. 272
• §6.3.7 Damages p. 272
• §6.3.8 Periods of Limitations and Repose p. 273
• §6.4 Section 12(a)(2): Misrepresentations in "Public" Offerings p. 274
• §6.4.1 Coverage of §12(a)(2) p. 274
• §6.4.2 Section 12(a)(2) Defendants p. 276
• §6.4.3 Elements of §12(a)(2) Rescission Action p. 276
• §6.4.4 Periods of Limitations and Repose p. 278
• §6.5 Section 15: Liability of Control Persons p. 278
• §6.6 Section 4A(c): Liability in Crowdfunding p. 279
• §6.6.1 New ?4A(c) Action p. 279
• §6.6.2 Unresolved Issues in ?4A(c) Action p. 280
• §6.7 Section 17(a): Liability in Sec Enforcement Action p. 280
• §6.8 Liability Under State Blue Sky Laws p. 281
• Examples and Explanations p. 283
• Chapter 7 Secondary and Other Postoffering Distributions p. 305
• §7.1 Definitions of Issuers, Underwriters, and Dealers p. 307
• §7.1.1 Agent "for Issuer" p. 309
• §7.1.2 Purchaser from Issuer "with a View" to Distribute p. 310
• §7.1.3 Underwriter for "Control Person" p. 311
• §7.2 Exemptions for Control and Restricted Securities p. 313
• §7.2.1 Rule 144: Secondary Distributions in Public Markets p. 314
• §7.2.2 Exemptions for Secondary Private Placements p. 317
• §7.3 Corporate Reorganizations and Recapitalizations p. 319
• §7.3.1 Issuer Exchanges p. 319
• §7.3.2 Fundamental Corporate Transactions - Rule 145 p. 319
• §7.3.3 Downstream Sales and Spinoffs p. 320
• §7.3.4 Warrants, Options, and Conversion Privileges p. 321
• §7.4 Resales Under Blue Sky Laws p. 321
• Examples and Explanations p. 323
• Chapter 8 Securities Exchange Act of 1934 p. 339
• §8.1 Regulation of Securities Trading Markets p. 342
• §8.1.1 Regulation of Stock Exchanges p. 342
• §8.1.2 Regulation of Over-the-Counter Market p. 344
• §8.1.3 Alternative Trading Systems p. 345
• §8.1.4 Regulation of Collateral Market Participants p. 345
• §8.2 Regulation of Market Practices p. 345
• §8.2.1 Market Manipulation p. 346
• §8.2.2 Short Selling p. 348
• §8.2.3 Purchasing Securities on Margin p. 350
• §8.3 Regulation of Public Companies p. 351
• §8.3.1 Registration with the SEC p. 352
• §8.3.2 Periodic Disclosure p. 354
• §8.3.3 False or Misleading SEC Filings p. 358
• §8.3.4 Oversight of Corporate Misconduct p. 358
• §8.3.5 Corporate Governance Listing Standards p. 363
• §8.4 Proxy Regulation (A Summary) p. 366
• §8.4.1 Mandatory Disclosure in Proxy Solicitation p. 366
• §8.4.2 No Open-Ended Proxies p. 367
• §8.4.3 Shareholder Access p. 367
• §8.4.4 Liability for Proxy Fraud p. 368
• §8.5 Regulation of Tender Offers (A Summary) p. 369
• §8.5.1 Disclosure of 5 Percent Ownership p. 370
• §8.5.2 Disclosure in Tender Offer p. 370
• §8.5.3 Regulation of Substantive Terms of Tender Offer p. 371
• §8.5.4 Liability for Deception in Tender Offers p. 372
• Examples and Explanations p. 373
• Chapter 9 Rule 10b-5 p. 391
• §9.1 Rule 10b-5 Overview p. 391
• §9.1.1 History of Rule 10b-5 p. 391
• §9.1.2 Some Essential 10b-5 Pointers p. 394
• §9.1.3 Private 10b-5 Actions and SEC Enforcement p. 396
• §9.1.4 Typical 10b-5 Cases p. 397
• §9.2 Scope of Private 10b-5 Action p. 398
• §9.2.1 Purchasers and Sellers: 10b-5 Standing p. 398
• §9.2.2 Primary Violators: 10b-5 Defendants p. 401
• §9.2.3 Fraud "in Connection with" Securities Transactions p. 406
• §9.3 Fraud Elements of Private 10b-5 Action p. 408
• §9.3.1 Material Deception p. 409
• §9.3.2 Scienter - "Manipulative or Deceptive Device or Contrivance" p. 413
• §9.3.3 Reliance and Causation p. 416
• §9.3.4 Damages p. 420
• §9.3.5 Nature of 10b-5 Liability p. 423
• §9.4 Defenses in Private 10b-5 Action p. 424
• §9.4.1 Limitations and Repose Periods p. 425
• §9.4.2 In Pari Delicto Defense p. 426
• §9.4.3 Contribution and Indemnification p. 426
• §9.4.4 Contract Defenses p. 427
• §9.5 Comparison to Other Securities Fraud Remedies p. 428
• §9.5.1 Express Federal Remedies for Securities Fraud p. 429
• §9.5.2 State Law Remedies p. 433
• §9.5.3 Racketeer Influenced and Corrupt Organizations Act (Private RICO) p. 435
• §9.5.4 Arbitration and Private Ordering p. 435
• Examples and Explanations p. 436
• Chapter 10 Insider Trading p. 453
• §10.1 Introduction to Insider Trading p. 454
• §10.1.1 Classic Insider Trading p. 454
• §10.1.2 Misappropriation of InformationuOutsider Trading p. 454
• §10.1.3 Theories for Regulation of Insider Trading p. 455
• §10.2 Rule 10b-5 and Insider Trading p. 456
• §10.2.1 Duty to "Abstain or Disclose" p. 457
• §10.2.2 Insider Trading Primer p. 461
• §10.2.3 Outsider TradinguMisappropriation Liability p. 462
• §10.2.4 Remedies for Insider Trading p. 469
• §10.2.5 Regulation FD and Selective Disclosure p. 471
• Examples and Explanations p. 474
• §10.3 Short-Swing Insider Profits: Disclosure and Disgorgement p. 487
• §10.3.1 Coverage of §16 p. 488
• §10.3.2 Disgorging Short-Swing ProfitsuMechanical Test p. 489
• §10.3.3 Special Interpretive Issues p. 491
• §10.3.4 Section 16(b) Litigation p. 494
• §10.4 Regulation of Insider Trading Under Sarbanes-Oxley (Revised by Dodd-Frank) p. 496
• §10.4.1 Insider Trading During Pension Plan Trading Blackout p. 496
• §10.4.2 Reimbursement of Incentive Pay When Financials Misstated p. 497
• Examples and Explanations p. 499
• Chapter 11 Regulation of Securities Industry p. 507
• §11.1 Capacities of Securities Professionals p. 509
• §11.2 Broker-Dealer Regulation p. 510
• §11.2.1 SEC and FINRA Supervision p. 511
• §11.2.2 Regulation in Public Offerings p. 512
• §11.2.3 Disclosure Responsibilities p. 514
• §11.2.4 Standards of Conduct p. 516
• §11.2.5 Enforcement of Customer Rights p. 524
• §11.2.6 Insurance of Customer Accounts p. 527
• §11.2.7 State Blue Sky Regulation p. 527
• §11.3 Investment Adviser Regulation p. 528
• §11.3.1 Definition of Investment Adviser p. 528
• §11.3.2 Federal Regulation of Investment Advisers p. 529
• §11.3.3 State Blue Sky Regulation p. 530
• Examples and Explanations p. 531
• §11.4 Mutual Fund Regulation p. 542
• §11.4.1 What Is a Mutual Fund? p. 543
• §11.4.2 Mutual Fund Costs p. 544
• §11.4.3 Regulation of Mutual Funds p. 546
• §11.5 Private Fund Regulation p. 549
• §11.5.1 What Are Private Funds? p. 549
• §11.5.2 Regulation of Private Funds p. 550
• §11.6 Regulation of Credit Rating Agencies p. 551
• §11.6.1 Accountability of Credit Rating Agencies p. 552
• §11.6.2 Internal Controls in Credit Rating Agencies p. 553
• §11.6.3 Regulation of Credit Rating Agencies p. 553
• Chapter 12 Public Enforcement p. 557
• §12.1 SEC Investigations p. 558
• §12.1.1 Investigations: Formal and Informal p. 558
• §12.1.2 Investigative Powers p. 559
• §12.2 SEC Administrative Enforcement p. 560
• §12.2.1 SEC Administrative Enforcement Powers p. 561
• §12.2.2 SEC Disciplinary Powers p. 563
• §12.2.3 SEC Settlements and Consent Decrees p. 564
• §12.3 Judicial Enforcement: Injunctions and Other Remedies p. 565
• §12.3.1 Standard for Relief p. 566
• §12.3.2 Types of Relief p. 566
• §12.3.3 Effect of Injunction p. 568
• §12.3.4 Modification or Dissolution of SEC Injunctions p. 568
• §12.3.5 Statute of Limitations p. 569
• §12.4 Enforcement Against Securities Professionals p. 569
• §12.4.1 SEC Rules of Practice p. 570
• §12.4.2 Accountant Discipline p. 570
• §12.4.3 Lawyer Discipline p. 572
• §12.4.4 Reporting "Up the Ladder" p. 574
• §12.5 Criminal Enforcement p. 576
• §12.5.1 Use of Criminal Law in Securities Enforcement p. 577
• §12.5.2 Criminal Violations of Federal Securities Law p. 578
• §12.5.3 Securities Activities Creating Criminal Liability p. 579
• §12.5.4 Non-Securities Criminal Law Applied to Securities Activities p. 581
• §12.5.5 Sentencing of Individual and Corporate Offenders p. 584
• §12.5.6 Parallel Enforcement p. 585
• §12.6 State Enforcement p. 588
• §12.6.1 New York's Martin Act p. 588
• §12.6.2 Enforcement Actions Against Securities Firms p. 589
• Examples and Explanations p. 590
• Chapter 13 U.S. Regulation of Cross-Border Securities Transactions p. 595
• §13.1 Offshore Offerings by U.S. Issuers (and Foreign Issuers) p. 595
• §13.1.1 Regulatory Dilemma p. 596
• §13.1.2 SEC Safe Harbors - Regulation S p. 596
• Examples and Explanations p. 602
• §13.2 Foreign Securities in the United States p. 611
• §13.2.1 Public Offerings of Foreign Securities p. 611
• §13.2.2 American Depositary Receipts (ADRs) p. 613
• §13.2.3 Private Placements and Rule 144A p. 615
• §13.2.4 Requirements for Foreign Issuers with U.S.-Traded Securities p. 616
• Examples and Explanations p. 620
• §13.3 Extraterritorial Reach of U.S. Securities Laws p. 625
• §13.3.1 Securities Fraud Litigation p. 625
• §13.3.2 Federal Government Enforcement p. 629
• Examples and Explanations p. 632
• Table of Cases p. 639
• Index p. 645