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Introduction to the Securities Markets and Securities Regulation |
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Materiality |
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The Definition of a “Security” |
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Disclosure and Accuracy |
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Rule 10b-5 Antifraud |
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Insider Trading |
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Public Offerings |
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Civil Liability under the Securities Act |
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Exempt Offerings |
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Secondary Market Transactions |
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Federal Regulation of Shareholder Voting |
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Takeover Regulation |
Chapter 1
Introduction to the Securities Markets and Securities Regulation
I. |
The Basics |
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II. |
Types of Securities
A. Common Stock
B. Preferred Stock
C. Bonds |
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III. |
The Capital Market
A. Primary Market Transactions
B. Secondary Market Transactions |
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IV. |
Investment Decisions
A. Present Discount Valuation
B. What Risks Matter |
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V. |
Who Provides Information to Investors?
A. The Incentive to Provide Information
B. The Argument for Mandatory Disclosure
C. How Does Information Disclosure Matter? |
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VI. |
The Regulatory Apparatus
A. The Federal Securities Laws
B. The Securities and Exchange Commission
C. Self-Regulatory Organizations |
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Chapter 2
Materiality
I. |
What Matters to Investors? |
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II. |
Forward-looking Information
Basic Inc. v. Levinson
Oran v. Stafford |
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III. |
Historical Facts
Ganino v. Citizens Utilities Company |
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IV. |
Opinions
Virginia Bankshares, Inc. v. Sandberg |
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V. |
The “Total Mix”
Longman v. Food Lion, Inc. |
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VI. |
Management Integrity
In the Matter of Franchard Corporation
SEC v. Fehn |
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Chapter 3
The Definition of a "Security"
I. |
Do the Securities Laws Apply? |
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II. |
“Investment Contract”
| SEC v. W. J. Howey Co. |
A. |
“A Person Invests His Money”
International Brotherhood of Teamsters v. Daniel |
B. |
“[I]n a Common Enterprise”
SEC v. SG LTD. |
C. |
“[I]s Led to Expect Profits”
United Housing Foundation, Inc. v. Forman
SEC v. Edwards |
D. |
“[S]olely From the Efforts of the Promoter or a Third Party”
Rivanna Trawlers Unlimited. v. Thompson Trawlers, Inc. |
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III. |
“Stock”
Landreth Timber Company v. Landreth |
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IV. |
“Note”
Reves v. Ernst & Young |
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Chapter 4
Disclosure and Accuracy
I. |
Mandatory Disclosure and Accuracy |
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II. |
What is a “Public Company?”
A. |
Public Company Status |
B. |
Escaping Public Company Status |
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III. |
When Must a Public Company Disclose, and to Whom?
A. |
Form 8-K |
B. |
Forms 10-K and 10-Q
In the Matter of W. R. Grace & Co |
C. |
The Problem of Selective Disclosure
In the Matter of Siebel Systems, Inc.
Siebel Systems, Inc., Kenneth A. Goldman and Mark D. Hanson |
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IV. |
Accuracy
A. |
Books and Records
In the Matter of Tonka Corporation |
B. |
The Independent Auditor |
C. |
The Role of Lawyers in Enforcing the Securities Laws |
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V. |
Enforcement Issues
A. |
Investigations and Strategy
Report of Investigation Pursuant to Section 21(A) of the Securities Exchange Act of 1934
and Commission Statement on the Relationship of Cooperation to Agency Enforcement
Decisions, Exchange Act Release No. 44969 (2001)
Lucent Settles SEC Enforcement Action Charging the Company with $1.1 Billion
Accounting Fraud, Press Release 2004-67 |
B. |
Subpoenas
RNR Enterprises, Inc. v. SEC
SEC v. Dresser Industries, Inc. |
C. |
Administrative Remedies
KPMG, LLP v. SEC |
D. |
Judicial Remedies
Aaron v. SEC
SEC v. Sargent
SEC v. First Pac. Bancorp |
E. |
Criminal Enforcement
United States v. Dixon |
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Chapter 5
Rule 10b-5 Antifraud
I. |
The Economics of Securities Fraud and Private Rights of Action
A. |
The Rule 10b-5 Private Cause of Action
Herman & Maclean v. Huddleston et al. |
B. |
The Class Action Mechanism |
C. |
Sorting the Good from the Bad |
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II. |
Who Can Sue Under Rule 10b-5?
A. |
The “In Connection With” Requirement
Blue Chip Stamps, et al. v. Manor Drug Stores
SEC v. Zandford |
B. |
The Lead Plaintiff in a Class Action
In Re Cendant Corp. Litigation |
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III. |
Elements of the Cause of Action
A. |
Misstatement of a Material Fact
Santa Fe Industries, Inc., et al. v. Green et al.
Gallagher v. Abbott Laboratories
Asher v. Baxter International Inc. |
B. |
Scienter
Ernst & Ernst v. Hochfelder et al.
Florida State Bd. of Admin. v. Green Tree Fin. Corp. |
C. |
Reliance
Affiliated Ute Citizens of Utah v. United States
Basic Inc. v. Levinson |
D. |
Loss Causation
Bastian v. Petren Resources Corporation
Broudo v. Dura Pharmaceuticals, Inc. |
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IV. |
Rule 10b-5 Defendants
A. |
Secondary Liability
Central Bank of Denver v. First Interstate Bank of Denver |
B. |
Who is a Primary Violator?
Wright v. Ernst & Young LLP |
C. |
Control Person Liability
Arthur Children's Trust v. Keim |
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V. |
Damages
A. |
Face-To-Face Damages
Pidcock v. Sunnyland America, Inc.
Garnatz v. Stifel, Nicolaus & Co., Inc. |
B. |
Open Market Damages |
C. |
Proportionate Liability |
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VI. |
Defenses
A. |
In Pari Delicto
Bateman Eichler, Hill Richards, Inc. v. Berner |
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Chapter 6
Insider Trading
I. |
Economics of Insider Trading |
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II. |
Insider Trading at Common Law
Strong v. Repide |
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III. |
Rule 10b-5 and the Classical Theory of Insider Trading
A. |
Core Insiders
Chiarella v. United States |
B. |
Tipper/Tippee Liability
Dirks v. Securities and Exchange Commission |
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IV. |
The Misappropriation Theory
Carpenter v. United States (1st Draft)
United States v. O'Hagan |
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V. |
Section 16 Short-Swing Profits
A. |
What is a Sale?
Kern County Land Co. v. Occidental Petroleum Corp
Foremost-McKesson, Inc. v. Provident Securities Co. |
B. |
Calculating Section 16(b) Damages |
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Chapter 7
Public Offerings
I. |
Economics of Public Offerings
A. |
A Brief Description of the Public Offering Process |
B. |
Public Offering Information Disclosure |
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II. |
The Gun-Jumping Rules
A. |
Pre-Filing Period
In the Matter of Carl M. Loeb, Rhoades & Co.
Securities Act Release No. 3844
Securities Act Release No. 5009
Securities Act Release No. 5180
Securities Act Release No. 7856 |
B. |
Waiting Period |
C. |
Post-Effective Period
SEC v. Manor Nursing Centers, Inc. |
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III. |
Public Offering Trading Practices
A. |
IPO Allocations |
B. |
Market Manipulation |
C. |
Stabilization |
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IV. |
Shelf Registration |
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Chapter 8
Civil Liability under the Securities Act
I. |
Public Offerings, Uncertainty and Information Asymmetry |
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II. |
Section 11 Liability
A. |
Standing
Abbey v. Computer Memories, Inc. |
B. |
Statutory Defendants |
C. |
Elements of the Cause of Action |
D. |
Defenses
Escott v. Barchris Construction Co.
Securities Act Release No. 6335 |
E. |
Damages
Beecher v. Able
Akerman v. Oryx Communications Inc.
Eichensholtz v. Brennan |
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III. |
Section 12(a)(1)
A. |
Standing and Defendants
Pinter v. Dahl |
B. |
Elements of the Cause of Action |
C. |
Damages and Defenses |
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IV. |
Section 12(a)(2) Misstatements
A. |
The Scope of § 12(a)(2)
Gustafson v. Alloyd |
B. |
Implications of Gustafson
In Re Valence Technology Securities Litigation
Hertzberg v. Dignity Partners, Inc. |
C. |
Elements of the Cause of Action
Sanders v. John Nuveen & Co. |
D. |
Defenses |
E. |
Damages |
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Chapter 9
Exempt Offerings
I. |
Introduction |
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II. |
Section 4(2) Offerings
SEC v. Ralston Purina Co.
Doran v. Petroleum Management Corp. |
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III. |
Regulation D
A. |
Aggregate Offering Price |
B. |
Purchasers |
C. |
General Solicitation
In the Matter of Kenman Corp. |
D. |
Information Disclosure |
E. |
Resale Restrictions |
F. |
Integration |
G. |
Innocent and Insignificant Mistakes |
H. |
Other Aspects of Regulation D |
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IV. |
Regulation A
A. |
Type of Issuer |
B. |
Aggregate Offering Price |
C. |
Information Disclosure |
D. |
Regulation A Gun-Jumping |
E. |
Integration |
F. |
Insignificant Deviations |
G. |
Antifraud Liability |
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V. |
Intrastate Offerings
A. |
Section 3(a)(11) Offerings
Securities Act Release No. 4434
Busch v. Carpenter |
B. |
Rule 147
Exchange Act Release No. 5450 |
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VI. |
Regulation S
A. |
Basic Regulation S Requirements |
B. |
Categories of Regulation S Offerings |
C. |
Integration |
D. |
Resales |
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Chapter 10
Secondary Market Transactions
I. |
Introduction |
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II. |
Who is an Underwriter?
Gilligan, Will & Co., v. SEC
SEC v. Chinese Consolidated Benevolent Assoc., Inc. |
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III. |
Control Persons’ Resales
A. |
Underwriters for Control Persons
U.S. v. Wolfson |
B. |
Section 4 1(1/2) Exemption
Ackerberg v. Johnson, Jr. |
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IV. |
Rule 144
A. |
Current Public Information |
B. |
Holding Period for Restricted Securities |
C. |
Limitation on Amount of Securities Sold |
D. |
Manner of Sale |
E. |
Notice of Proposed Sale |
F. |
Other Considerations |
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V. |
Rule 144A
A. |
Offers and Sales to a Qualified Institutional Buyer |
B. |
Purchaser Awareness of Exemption |
C. |
Fungibility |
D. |
Information |
E. |
Resales |
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Chapter 11
Federal Regulation of Shareholder Voting
I. |
Introduction |
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II. |
Solicitation of Proxies
A. |
What is a “Solicitation”? |
B. |
Proxy Disclosure |
C. |
Rule 14a-9 Antifraud Liability
J.I. Case Co. v. Borak
Gould v. American-Hawaiian S. S. Co.
Mills v. Electric Auto-Lite Co.
Virginia Bankshares, Inc. v. Sandberg |
D. |
Managing the Costs of Proxy Solicitations |
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III. |
Shareholder Democracy
A. |
Shareholder Issue Proposals
Lovenheim v. Iroquois Brands Ltd.
New York City Employees' Ret. Sys. v. Dole Food Co.
Amendments to Rules on Shareholder Proposals, Release No. 34-40018 |
B. |
SEC Authority over Voting Powers
The Business Roundtable v. SEC |
C. |
Expanding the SEC’s Role in Corporate Governance
Security Holder Director Nominations, Release No 34-48626 |
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Chapter 12
Takeover Regulation
I. |
The Market for Corporate Control
A. |
The Market for Corporate Control |
B. |
State Corporate Law Regulation |
C. |
Genesis of the Williams Act
General Time Corp. v. Talley Industries, Inc. |
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II. |
The “Early Warning” Provision of § 13(d)
Hallwood Realty Partners, L.P., v. Gotham Partners, L.P. |
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III. |
Tender Offers
A. |
What is a “Tender Offer”?
Hanson Trust Plc, v. SCM Corporation |
B. |
Tender Offer Regulation
Commission Guidance on Mini-Tender Offers and Limited Partnership Tender Offers, Release No. 34-43069
Gerber v. Computer Associates International, Inc. |
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