Securities Act of 1933

The Securities Act of 1933 is a United States federal statute enacted in response to the stock market crash of 1929 and the ensuing Great Depression. The Act has two primary purposes: 1) to give investors better... more +
The Securities Act of 1933 is a United States federal statute enacted in response to the stock market crash of 1929 and the ensuing Great Depression. The Act has two primary purposes: 1) to give investors better access to material information prior to investing 2) ensure that transactions are not based on fraud. In order to effectuate its dual goals, the Act requires that any offer or sale of securities is registered with the SEC. less -
News & Analysis as of

Do State Courts Lack Subject Matter Jurisdiction Over Covered Class Actions That Allege Only ’33 Act Claims?

In Luther v. Countrywide Financial Corp., 195 Cal. App. 4th 789 (2011), the trial court ruled that state courts do not enjoy concurrent jurisdiction when a class action meeting the definition of a “covered class action” under...more

This Week In Securities Litigation

In a holiday shortened week the Commission brought actions centered on: a transfer agent and one of its owners who conducted a fraudulent offering for another company and then sold unregistered shares into the market; a...more

SEC – A Computer and Twenty-Seven Minutes To Profit

The SEC’s latest stock manipulation case might be titled “How to make (almost) over $400,000 in just 27 minutes.” The key is to use Williams Act filings not to alert the market and issuer to a potential take-over but to fake...more

What is the RAISE Act and How Useful will it be to Sellers of Private Company Shares?

With the enactment of the Jumpstart Our Business Startups (JOBS) Act of 2012, private companies have the ability to defer an IPO and SEC reporting, and remain private longer than at any time in the past. One result, however,...more

SEC Opinion Examines Reasonable Belief and Accredited Investor Status

The SEC opinion In the Matter of Joseph P. Doxey examines compliance with Rule 506 in an alleged unlawful offering of stock totaling $57,654. The administrative law judge on summary disposition determined that Mr. Doxey...more

The RAISE Act: A New Securities Exemption to Help Start-ups Raise Money?

If you hold stock in a start-up company, you may have noticed that your stock certificate has a daunting message in all capital letters that reads something like: - THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED...more

SEC Files Offering Fraud Action Centered on Warrants From Private Firm

The SEC filed another offering fraud action, a current staple of the agency. This scheme centered on two former executives of a privately held software manufacturer and a marketer who sold investors interests in various...more

SEC Finalizes Rules Implementing JOBS Act and FAST Act Provisions Concerning Exchange Act Registration Thresholds

On May 3, 2016, the SEC adopted final rules regarding reporting obligation thresholds under the Securities Exchange Act of 1934 mandated by the JOBS Act and the securities provisions of the FAST Act. The rules become...more

Fair Access to Investment Research Act of 2016 Passes Muster in U.S. House of Representatives

On April 28, 2016, the U.S. House of Representative passed the Fair Access to Investment Research Act of 2016 (H.R. 5019) by a vote of 411 to 6. This bill directs the SEC to amend its regulations under the Securities Act of...more

Plaintiffs Find California Courts Congenial To Section 11 Actions

Muttering About Mottoes - The official motto of the State of California is “Eureka”. Cal. Gov’t Code § 420.5. The word is a transliteration of the Greek word e????a which is first person, singular, indicative active...more

SEC Complaint: How To Create A Manipulation Vehicle

Microcap fraud has long been a focus of SEC enforcement. Many of the cases start with a public shell followed by a reverse merger in which the promoters end up with large portions of the stock. The transaction culminated with...more

Private Placements: A Primer

A private equity offering or “private placement” of securities is the process of offering and selling securities to prospective investors without first registering the securities with the U.S. Securities and Exchange...more

SEC Brings Two Financial Fraud Actions

Financial fraud has long been a staple of SEC enforcement. In the wake of the market crisis the agency has attempted to once again focus on the area creating, for example, a financial fraud task force two years ago. Last...more

SEC Prevails At Trial Over Former Professional Athlete

Sometimes is does not pay to be the last man standing – particularly in a Commission enforcement action. Such was the fate of former NFL player and Olympic athlete Willie Gault. SEC v. Heart Tronics, Inc., Case No....more

Just How Many Errors Can Be Found In The Securities Act?

I’ve recently completed my editing of the annual update to Marsh & Volk’s treatise, Practice Under the California Securities Laws. One source of frustration has been to account for and explain the numerous technical errors...more

FinCEN Proposes Imposing BSA Requirements on Crowdfunding Portals

On April 4, FinCEN issued a proposed rule to amend the definitions of “broker or dealer in securities” and “broker-dealer” under the regulations implementing the BSA. Specifically, FinCEN proposed that the definitions be...more

SEC Files Another In A Series of Actions Tied to Secret Commissions

The Commission brought another in a series of actions centered on ConvergEx Execution Solutions LLC and its affiliates. As with the prior actions, this one centered on secretly adding substantial commissions to transactions...more

Former Texas AG, Computer Company Charged by SEC With Fraud

A former Texas Attorney General and state representative combined with others at a computer firm to promote the shares of the company which claimed to compete with Dell, Apple and others. About $26 million in stock was sold...more

FinCEN Proposes Funding Portals Regulations under Bank Secrecy Act

On April 4, 2016, the Financial Crimes Enforcement Network, a bureau of the Department of the Treasury (“FinCEN”), proposed amendments to the definitions of ‘‘broker or dealer in securities’’ and ‘‘broker-dealer’’ under the...more

The Grisly Death of Determination Letters for Individually Designed Plans

The Internal Revenue Service (IRS) announced last year that it would end its staggered five-year remedial amendment cycle system for individually designed retirement plans under the determination letter program due to...more

A Unique SEC Offering Fraud Action

In recent years the SEC has brought a series of investment and offering fraud actions. Typically those actions center on schemes which promise to-good-to-be-true returns in which investors lose substantial sums. In what may...more

SEC’s Division of Investment Management Issues Guidance on Revising Fund Disclosure in Light of Changing Market Conditions

On March 2, 2016, the Securities and Exchange Commission’s (“SEC”) Division of Investment Management issued new guidance (the “Guidance”) to registered investment companies and their investment advisers regarding the dynamic...more

O’Melveny Obtains SEC Interpretive Guidance for Bank of America Permitting the Immediate, Unregistered Resale of REIT Common Stock...

On March 14, 2016, the Securities and Exchange Commission’s Division of Corporation Finance issued an interpretive letter to Bank of America, N.A., and Merrill Lynch, Pierce, Fenner & Smith Incorporated clarifying the...more

SEC Issues Guidance Clarifying Rule 144(d)(1) Holding Period Requirements For REIT Shares Exchanged For Operating Partnership...

On March 14, 2016, the staff of the SEC's Division of Corporate Finance issued a no-action letter (the "No-Action Letter") concluding that, for purposes of Rule 144 promulgated under the Securities Act of 1933, as amended...more

Three Bills Introduced in the U.S. House of Representatives Concerning Access to Capital Markets

On March 23, 2016, three bills affecting access to capital markets were introduced in the U.S. House of Representatives. H.R. 4850: Micro Offering Safe Harbor - Representative Tom Emmer of Minnesota introduced this...more

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