NCJ Number
95050
Date Published
1983
Length
71 pages
Annotation
This document discusses the fraud and civil liability aspects of the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, and the Investment Advisor Act of 1940.
Abstract
Part One on fraud first outlines Federal statutes and rules which can be used to combat fraud and then discusses the relation between Securities and Exchange Commission (SEC) fraud concepts and common law deceit. The explanation of Rule 10b-5 on corporate insiders covers definitions of an insider and scienter, violation of the rule by nonverbal acts, the rule's universality, and interpretation of the 'in connection with a purchase or sale' phrase. This section reviews the 'new fraud' theory that adequate price coupled with controlling influence was enough to establish a violation regardless of disclosure. Also considered are special fraud concepts that have been developed in connection with brokers, dealers, and investment advisers. Part Two on civil liabilities under the SEC statutes looks initially at specific liabilities, including violation of registration or prospectus provisions of the 1933 act and misstatement or omission in sale of securities. It examines the development of the implied liabilities and two matters common to both express and implied liabilities -- secondary liability and statutes of limitations. A total of 169 footnotes and a 12-item annotated bibliography are included.