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9 Cards in this Set

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Security (Definition)
an invesment of money in a common enterprise with an expectation of profits solely from the efforts of others
When offering a security you must...
1. Register with the SEC
- OR -
2. show that it is exempt
Exemptions for not registering with SEC (for securities)
1. Private offering
2. limited offering (under $5 million
3. offer to "qualified investors"
4. Offering confined to single state
Rule 10(b)5
Insider Trading "Linch-Pin"
unlawful to (1) employ device, scheme to defraud (2) make untrue statements of a material fact or omit a material fact (3) engage in any act that operates as a fraud or deciet upon any person
Insider Trading under 10(b)5
trading securities "on the basis of" material, nonpublic information in violation of a duty to the corporation or shareholders
Insider trading can happen by...
1. insider violates a duty
2. person trading recieved a tip from someone who violated a duty and tippee knew or should have known this
3. misapproriations theory: person misapproriates confidental info for secirities trading purposes
Securities Fraud under 10(b)5
misleading or fals oral or written statments which are designed to influence investors and potential customers
Insider trading can happen by...
1. insider violates a duty
2. person trading recieved a tip from someone who violated a duty and tippee knew or should have known this
3. misapproriations theory: person misapproriates confidental info for secirities trading purposes
Securities Fraud under 10(b)5
misleading or fals oral or written statments which are designed to influence investors and potential customers