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43 Sec. (False Registration Statements (Short-swing profits (Insider Bad…
43 Sec.
False Registration Statements
Everyone that signed and prepared may be liable
defendants other than issue may use due diligence as defense
Misleading Statements in Reports
Civil liability and reported to SEC
Short-swing profits
Liable to those owning more than 10%
All profits made on sale/purchase within 6 months
Insider Bad info
Sell high, Buy low
Insider Good info
Buy low, sell high
Antifraud Provision
Seller is immediate liable to purchaser
Provided purchaser did not know the truth
As long as reasonable care or reliance
Burden of proof on seller
Disclosure requirement
disclose all accurate material information
Required for public offering
Express Insider Trading Liability
Any one who buy/sell security with inside info
Civil penalties
up to three times the gains/loss avoided
Misleading Proxy statments
Liable to injured investors
Fraudulent Tender offers
civil liability for false or material mistatements
omissions, deceptive, manipulative
In connection with any tender offer
Criminal sanctions
Max 20 years and $5 million