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LSDefine

Simple English definitions for legal terms

Securities Exchange Act of 1934

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A quick definition of Securities Exchange Act of 1934:

The Securities Exchange Act of 1934 is a law that regulates the buying and selling of stocks in the secondary market. It requires companies to disclose important information to investors so they can make informed decisions about buying or selling stocks. The law also establishes the Securities and Exchange Commission (SEC), which enforces the rules and regulations of the Act. The SEC oversees self-regulatory organizations (SROs) and can bring civil or criminal actions against those who violate the law, including those who engage in fraud or insider trading.

A more thorough explanation:

The Securities and Exchange Act of 1934, also known as the Exchange Act, is a federal law that regulates the trading of securities in the secondary market. This law primarily governs transactions between parties that are not the original issuer, such as trades made by retail investors through brokerage companies.

To protect investors, the Exchange Act requires companies to disclose information that investors would find pertinent to making investment decisions. This mandatory disclosure process is designed to ensure that companies provide accurate and complete information to investors. The Act also regulates the exchanges on which securities are sold.

Companies with registered publicly held securities and companies of a certain size are called "reporting companies" and must make periodic disclosures by filing annual reports (Form 10-K) and quarterly reports (Form 10-Q). Reporting companies must also promptly disclose certain important events (Form 8-K). These reports include information about the company's officers and directors, the company's line of business, audited financial statements, and the management discussion and analysis section.

The Exchange Act requires disclosure of important information by anyone seeking to acquire more than 5 percent of a company's securities by direct purchase or tender offer. Such an offer often is extended in an effort to gain control of the company. If a party makes a tender offer, the Williams Act governs. The Williams Act requires the tender offeror to file disclosure documents with the SEC that disclose its future plans relating to its holdings in the company. This information allows investors to decide whether to sell or not.

The Securities and Exchange Commission (SEC) is the federal agency responsible for enforcing securities laws. The SEC ensures that companies meet the Exchange Act's disclosure requirements and registers and establishes rules regulating the conduct of market participants, stock exchanges, and self-regulatory organizations (SROs). The SEC can sanction, fine, or otherwise discipline market participants who violate federal securities laws.

The Exchange Act prohibits fraud and establishes severe penalties for those who defraud investors, as well as those who engage in some trading practices that take advantage of information most investors do not have (such as insider trading). The SEC can bring a civil enforcement action or criminal action for violations. Investors can also sue market participants who have defrauded them.

Section 10(b) is the primary anti-fraud statutory provision. The SEC primarily enforces this anti-fraud provision under Rule 10b-5, which prohibits the use of any "device, scheme, or artifice to defraud." Rule 10b-5 also imposes liability for any misstatement or omission of a material fact, or one that investors would think was important to their decision to buy or sell a security. Courts have held that there is a private right of action to sue under 10b-5.

Section 9 allows investors to sue for trading activities and patterns of trading conduct that mislead investors about the true value of a security, inducing them to trade. Claims under Section 9 are difficult to prove, since investors must show that the price was actually affected by the manipulation, and that the defendant acted willfully.

Section 20 provides for joint and several liability for people who control or abet violators of the Exchange Act, increasing the chance that an investor will be able to collect any damages that are awarded.

Securities dispute resolution: Selecting arbitrators | Securities fraud

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18:39
Yeah I would delay as long as you have plausible deniability
TGM
18:40
I actually do have a transcript issue that registrar needs to resolve, should I say that
TGM
18:41
(Course marked as Incomplete that’s supposed to be removed)
TGM
18:41
not sure if I should email them to say that, or just hold off on sending it and not give an excuse
18:41
I think I just wouldn’t reach out and if they ask for them then say that
Dkk
18:41
@tgm Yeah sounds good, say that if they ask
18:47
hey yall
18:47
im premed idk why im here
18:48
we’re like cool and sexy and fun I get it
18:48
true i love ur user
18:49
thank you my little crow friend
Dkk
18:50
Med law easy done
medicine is a scam
join the ethically ambiguous legal field instead
Dkk
18:57
I want to meet an attorney that defends clients who run into flat earth problems. I want an attorney that knows and believes in flat earth theory.
19:05
i want a flat earther for president. i want a guy who posts on 4chan for president. i want someone who mogs for president.
Dkk
19:18
Exactly. My version of that awful poem.
Dkk
19:19
I can accept a president with maybe one or two of the poems traits hut good God, all of them??? No ty.
windyMagician
19:20
president who respects sex is crazy
windyMagician
19:20
we had bill clinton already
Dkk
19:21
Bill Clinton, first and last black president
windyMagician
19:23
I want to go running but my leg feels weird
windyMagician
19:23
it doesn't hurt its just tingly
Dkk
19:26
It needs more alcohol. You tingle when your nerves need watering.
19:27
try stretching it maybe to see what's up
windyMagician
19:27
stretches make me think it's just soreness
windyMagician
19:27
I'm sober lol
Dkk
19:38
Anyone else get the google notification that your LSD password has been compromised lol. LSD got hacked.
20:48
what.jpg @Dkk
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