http://resources.lawinfo.com/en/Legal-FAQs/Overview-of-Major-Securities-Laws-and-Terminology/index.html LawInfo - Legal Resource Center offers free legal forms and free legal documents that is designed to help consumers and businesses resolve their legal issues http://resources.lawinfo.com/en/Legal-FAQs/Overview-of-Major-Securities-Laws-and-Terminology/Federal/what-is-a-security.html A Security is an investment instrument. It includes investments such as stocks, notes, bonds, debentures, investment contracts, interests in limited partnerships, and warrants, rights, or options to purchase any of the above. It may also include evidence of indebtedness or certificates of deposit. Securities and Exchange Commission FAQs Tue, 29 May 2007 21:19:00 GMT http://resources.lawinfo.com/en/Legal-FAQs/Overview-of-Major-Securities-Laws-and-Terminology/Federal/what-are-the-federal-securities-laws.html Congress enacted the Federal Securities Laws In an effort to curb future excesses and to provide fair disclosure to investors. The Securities and Exchange Commission (SEC) administers these laws. Under Federal Law, there are four major "Acts" that are related to securities. These are: · The Securities Act of 1933 (Securities Act), · The Securities Exchange Act of 1934 (Exchange Act), · The Investment Company Act of 1940 (Investment Company Act), · The Investment Advisers Act of 1940 (Advisers Act). Securities and Exchange Commission FAQs Tue, 29 May 2007 21:19:00 GMT http://resources.lawinfo.com/en/Legal-FAQs/Overview-of-Major-Securities-Laws-and-Terminology/Federal/what-do-these-securities-laws-cover.html The Securities Act generally requires companies to give investors full disclosure of all material facts, the facts investors would find important in making an investment decision. This Act also requires companies to file a registration statement with the SEC that includes information for investors. The SEC does not evaluate the merits of offerings, or determine if the securities offered are good investments. The SEC staff reviews registration statements and declares them effective if companies satisfy their disclosure rules. The Exchange Act requires publicly held companies to disclose information continually about their business operations, financial conditions, and managements. These companies, and in many cases their officers, directors and significant shareholders, must file periodic reports or other disclosure documents with the SEC. In some cases, the company must deliver the information directly to investors. The Investment Company Act governs activities of investment companies, such as mutual funds, that are primarily serve as collective investment vehicles for others. The Advisers Act establishes a pattern of regulating those who manage or advise others on how to invest. In some respects, it resembles the Exchange Act that governs the conduct of securities brokers and dealers, and generally requires that firms compensated for advising others about securities investment to register with the SEC and conform to statutory standards designed to protect investors. Securities and Exchange Commission FAQs Tue, 29 May 2007 21:19:00 GMT http://resources.lawinfo.com/en/Legal-FAQs/Overview-of-Major-Securities-Laws-and-Terminology/Federal/what-is-the-securities-investor-protection-ac.html It is a law that establishes the Securities Investor Protection Corporation (SIPC) which acts to insure investors for up to $500,000 when the brokerage firm is a member. It includes up to $100,000 for cash accounts. Many firms purchase private insurance to increase an investor's coverage even beyond these limits. It is important to realize that this coverage is not designed to protect you for losses due to market conditions. Securities and Exchange Commission FAQs Tue, 29 May 2007 21:19:00 GMT http://resources.lawinfo.com/en/Legal-FAQs/Overview-of-Major-Securities-Laws-and-Terminology/Federal/are-there-state-securities-laws.html The federal and state governments each have their own securities laws and regulations. If a company is selling securities, it must comply with both federal and state securities laws. If a particular offering is exempt under the federal securities law that does not necessarily mean that it is exempt from any of the state laws. Some states review small businesses' securities offerings to ensure that companies disclose to investors all information needed to make an informed investment decision. Other states also analyze public offerings using substantive standards to assure that the terms and structure of the offerings are fair to investors, in addition to the focus on disclosure. Securities and Exchange Commission FAQs Tue, 29 May 2007 21:19:00 GMT http://resources.lawinfo.com/en/Legal-FAQs/Overview-of-Major-Securities-Laws-and-Terminology/Federal/what-are-blue-sky-laws.html Every state has its own securities laws­commonly known as "Blue Sky Laws"­that are designed to protect investors against fraudulent sales practices and activities. While these laws can vary from state to state, most states laws typically require companies making small offerings to register their offerings before they can be sold in a particular state. The laws also license brokerage firms, their brokers, and investment adviser representatives. Securities and Exchange Commission FAQs Tue, 29 May 2007 21:19:00 GMT http://resources.lawinfo.com/en/Legal-FAQs/Overview-of-Major-Securities-Laws-and-Terminology/Federal/are-all-companies-subject-to-securities-laws.html Some companies, depending on their type and how they are structured are exempt from the registration and reporting requirements of the securities laws. Although almost all companies are subject to federal and state anti­fraud rules. Securities and Exchange Commission FAQs Tue, 29 May 2007 21:19:00 GMT http://resources.lawinfo.com/en/Legal-FAQs/Overview-of-Major-Securities-Laws-and-Terminology/Federal/if-a-company-goes-public-what-must-it-disclos.html Companies must report information about their operations, their officers, directors, and certain shareholders, the financial condition of the business and their competitive position and material terms of contracts or lease agreements. All of this information becomes publicly available. 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