Section 10b-5 and Rule 10b-5. The most well known securities regulation is Rule 10b-5, promulgated pursuant to Section 10b of the ’34 Act. The Rule is the most often used Rule in the area of securities law, and most every securities fraud case involves, in one way or another, Rule 10b-5. And for that reason alone, ...
The Federal Securities Laws are comprised of a series of statutes, which in turn authorize a series of regulations promulgated by the government agency with general oversight responsibility for the securities industry, the Securities and Exchange Commission.
Leaving the specifics of the regulations to later chapters, it is sufficient to note that the vast majority of securities regulations are aimed at one goal – to promote fair and full disclosure of all material information relating to the markets, and to specific securities transactions, including all aspects of market trading, as well as the financing and financial reporting by public companies . While it may seem at times that specific regulations go well beyond such goals, that is the true goal of the regulatory scheme, and an underlying principle that should guide every market professional in his dealings with the industry, and the public, for, while no simple method of compliance is guaranteed, a policy of full disclosure will prevent most regulatory mishaps, certainly on the retail side of the business.
The Center for Corporate Law also maintains the rules promulgated under the Securities Exchange Act of 1934. As stated elsewhere, be sure to consult an attorney before relying on those rules, and the text, and the interpretations of those rules are in a constant state of flux.
Generally speaking, the ’33 Act governs the issuance of securities by companies , and the ’34 Act governs the trading, purchase and sale of those securities. Each has a wealth of regulations promulgated by the Securities and Exchange Commission, as well as regulations adopted by the National Association of Securities Dealers, Inc.
One of the best known, and often cited treatise on the topic is Loss and Seligman, Securities Regulation, a multi-volume treatise on the subject, published by Little Brown & Co in New York City. A single volume version is also available, and can be ordered online.
Rule 10b-5, and Section 10b are known as the Anti-Fraud provisions of the 34 Act , and most regulations flow from this rule. The rule has been the subject of extensive litigation, and later revisions to this article will address some of the significant aspects of those matters, including insider trading, market manipulation, fraud in connection with public offerings and takeovers, and fraud in connection with dealings with customers.