Securities act of 1933 Essay Example | Topics and Well Written Essays - 1750 words

Securities act of 1933 - Essay ExampleIn fact, this law was brought into light after the great depression in 1929 in the US economy. By means of fraudulent activities, many companies sold fake securities based on false information and thus huge investment from the investors went in vain.So, underlying tenet of 1933 act was to help potential investors get information about the company (issuer) and its securities that are offered for sale publicly. This overt expression from the issuer, thereby results a more bear on securities market because the investor were fully aware of the background of the company and their securities before investing money into purchase.Thus, it was a pressing need for a first major national law which can govern the unstable situation in a uniform manner. In fact, from the buyer point of view, it was really inspiring step to earn the issuers conformed to certain rules as to disclose their information accurately before they offer or sale securities.Regardles s of whether securities must be registered, the 1933 conduct makes it illegal to vest fraud in conjunction with the offer or sale of securities. A scammed investor can sue for recovery under the 1933 Act.Rule 144, promulgated by the minute under the 1933 Act, permits, under limited circumstances, the sale of restricted and controlled securities without registration.. The amount of securities sold during any subsequent 3-month period generally does not exceed any of the spare-time activity limitations1% of the stock outstanding, The avg. weekly reported volume of occupation in the securities on all national securities exchanges for the preceding 4 weeks, and The avg. weekly volume of trading of the securities reported through the consolidated transactions reporting system (NASDAQ).Regulation S is a safe harbor that defines when an offering of securities will be deemed to take after to rest abroad and therefore not be subject to the registration obligations imposed under Section 5 of the 1933 Act.Civil Liability under the 1933 Securities Act Any violation of the registration requirements can be a cause to civil liability for the issuer and underwriters Sections 11, 12(a) (1) or 12(a) (2) of the Act. Additional