Securities Regulation : Cases and Materials

by Cox, James D.

• ISBN13: 9780735559608
• ISBN10: 0735559600
• Edition: 5th
• Format: Hardcover
• Copyright: 2006-03-13
• Publisher: Wolters Kluwer

Summary

Both students and instructors will welcome Securites Regulation: Cases and Materials, Fifth Edition, The problem-oriented casebook that offers comprehensive coverage in an extremely flexible structure. the casebook earned its position as the top seller in the field through: the skills of its nationally known authors, who balance practice and doctrine in a challenging yet highly teachable book providing maximum flexibility for instructors, with modular chapters and an easily adaptable organization well-written, interesting problems that expose students to theory and the practical issues that impact investors and allow instructors to choose the problems they prefer, leaving control of the content in the instructor's hands readable, straightforward writing excellent coverage of the 1934 and 1935 Acts, widely recognized as the best in the field Thoroughly revised for its Fifth Edition, The casebook now: covers the new Offering Rules, The sweeping reforms For The public offering of securities adopted by the SEC in June 2005, which are fully integrated into the text and problems. The intricate and complex rules are presented clearly and concisely, and are accompanied by an extensive set of problems that walk students through their operation and interaction with one another. includes the recent Dura Pharmaceuticals decision examines the recent developments regarding forward looking statements And The significant Supreme Court decision, Asher v. Baxter Int'l ., Inc. To illustrate the operation of the statutory safe harbor updated Teacher's Manual An author website to support classroom instruction using this title is available at http://www.aspenlawschool.com/chl5

Table of Contents

Preface	xxxi
Acknowledgments	xxxiii
The Framework of Securities Regulation	1	(18)
Securities Transactions	1	(2)
Issuer Transactions	1	(1)
Trading Transactions	2	(1)
The Legal Framework of Securities Regulation	3	(16)
The Federal Securities Laws	3	(1)
The Securities Act of 1933	3	(2)
The Securities Exchange Act of 1934	5	(4)
Federal Regulation Beyond Disclosure: The Sarbanes-Oxley Act of 2002	9	(1)
The Regulation of Investment Advisors and Investment Companies	10	(1)
The Organizational Structure of the SEC	11	(1)
The Mediums Through Which the SEC Speaks	11	(2)
The SEC: Some Critical Perspectives	13	(1)
Blue Sky Laws	14	(2)
Self-Regulatory Organizations	16	(3)
The Definition of a Security	19	(76)
Introduction	19	(2)
The Development of a Framework for Defining an Investment Contract	21	(7)
SEC v. W.J. Howey Co.	21	(5)
Notes and Questions	26	(2)
Howey Applied	28	(17)
Investment Versus Consumption	28	(1)
United Housing Foundation, Inc. v. Forman	29	(4)
Notes and Questions	33	(1)
Problem	34	(1)
Common Enterprise and Profits Solely from the Efforts of Others	34	(1)
SEC v. Edwards	34	(5)
The Meaning of Common Enterprise	39	(1)
Problems	40	(1)
Profits from the Managerial Efforts of Others	41	(4)
Problems	45	(1)
Associational Formalities: Interests in Corporations, Partnerships, and LLCs as Securities	45	(14)
Stock as a Security	45	(3)
Notes and Questions	48	(1)
Problems	48	(1)
Partnership Interests as Securities	49	(1)
Steinhardt Group, Inc. v. Citicorp	50	(3)
Notes and Questions	53	(3)
Problem	56	(1)
LLC Interests as Securities	56	(1)
Problem	57	(1)
The Policy Question: Should Investment Contract Status Be Elective?	58	(1)
Real Estate as Securities	59	(7)
Hocking v. Dubois	60	(5)
Notes and Questions	65	(1)
Problem	66	(1)
Notes as Securities	66	(19)
Reves v. Ernst & Young	67	(1)
Reves v. Ernst & Young	67	(9)
Reves Applied	76	(1)
SEC v. Wallenbrock	76	(4)
Notes and Questions	80	(4)
Problems	84	(1)
Derivative Securities and Synthetic Investments	85	(6)
A Case Study on Derivatives: Caiola v. Citibank, N.A.	86	(3)
Notes and Questions	89	(2)
Separate Securities and Pass-Throughs	91	(4)
Markets and Their Efficiency	95	(22)
Markets and Investors	95	(9)
The Structure of Trading Markets	95	(4)
Globalization	99	(2)
Institutionalization	101	(2)
Derivative Markets	103	(1)
The Efficient Market Hypothesis: Implications and Limitations	104	(9)
The Meaning and Mechanisms of Market Efficiency	105	(3)
Notes and Questions	108	(2)
Problems	110	(1)
Noise	110	(3)
Behavioral Economics and Decisions by Individual Investors	113	(4)
The Public Offering	117	(142)
Underwriting and Underwriters	118	(20)
Methods of Underwriting	118	(1)
In re National Association of Securities Dealers, Inc.	118	(2)
Notes and Questions	120	(5)
Underwriters: Their Culture and Their Industry	125	(1)
Cultural Hierarchy	125	(2)
The Industry over Time	127	(3)
Underwriting Agreements: Contracting to Reduce Risk	130	(5)
Underwriters' Compensation	135	(1)
Review by the NASD	135	(1)
The Problems of Fixed Price Offerings	136	(2)
The Market for Initial Public Offerings	138	(7)
Irrational or Contrived Exuberance	138	(3)
Underpricing of Initial Public Offerings	141	(3)
Reforming the IPO Process	144	(1)
A Panoramic View of the Registration Statement	145	(4)
Registration of the Unseasoned Issuer	149	(12)
Preparing the Registration Statement for Filing	150	(1)
Schneider, Manko & Kant, Going Public: Practice, Procedure, and Consequences	151	(3)
Review by the SEC's Staff: The Letter of Comment	154	(1)
Poliakoff, SEC Review: Comfort or Illusion	154	(3)
Notes and Questions	157	(4)
Integrated Disclosure for the Seasoned Company	161	(7)
Notes and Questions	166	(2)
Gun Jumping	168	(28)
The Pre-filing Period	169	(1)
Conditioning the Market	170	(1)
Securities Act Release No. 3844	170	(5)
Safe Harbors for Permissible Communications	175	(2)
Research Reports	177	(2)
Arrangements With and Among Underwriters	179	(1)
Problems	179	(3)
The Waiting Period	182	(1)
The Preliminary and Summary Prospectus	182	(1)
Tombstone Ads and Identifying Statements	183	(1)
Free Writing	184	(2)
Hyperlinks to the Prospectus	186	(1)
Road Shows	187	(1)
Dealing with the Media	188	(1)
Selling Practices During the Waiting Period	188	(2)
Problems	190	(2)
The Post-Effective Period	192	(3)
Problems	195	(1)
Shelf Registration Under Rule 415	196	(9)
The Regulatory Concerns and the ``Traditional'' Shelf Registration	196	(2)
Catching Market Windows	198	(2)
Automatic Shelf Registration for Well-Known Seasoned Issuers	200	(1)
Securities Offering Reform, Securities Act Release No. 8591	200	(1)
Can Disclosure Be a Bad Thing?	201	(1)
Notes and Comments	202	(2)
Problems	204	(1)
Updating and Correcting the Registration Statement	205	(10)
SEC v. Manor Nursing Centers, Inc.	205	(3)
Problem	208	(1)
Refusal Orders and Stop Orders	208	(3)
Post-Effective Amendments	211	(1)
Correcting Material Inaccuracy	211	(2)
Supplementing Information that Is Permitted to Be Omitted Prior to Effectiveness	213	(1)
Undertakings to Update	214	(1)
Withdrawal of the Registration Statement	214	(1)
The Trading Practice Rules	215	(6)
Purchases During a Distribution	215	(1)
Notes and Questions	216	(2)
Problems	218	(1)
Stabilization	218	(2)
Problem	220	(1)
Notes and Questions	220	(1)
The International Public Offering	221	(24)
Accommodating Foreign Issuers' Offerings in the United States	222	(2)
Offerings Outside the United States	224	(1)
Regulation S	224	(2)
Regulation S, Securities Act Release No. 6863	226	(6)
Statement of the Commission Regarding Use of Internet Web Sites to Offer Securities . . . Offshore, Securities Act Release No. 7516	232	(4)
Notes and Questions	236	(2)
Problems	238	(1)
Offerings Falling Outside Regulation S	238	(1)
Europe and Overseas Commodity Traders, S.A. v. Banque Paribas London	238	(2)
How the Public Offering Is Regulated Elsewhere: Contrasting Examples	240	(1)
The United Kingdom	241	(2)
Japan	243	(1)
The People's Republic of China	244	(1)
Poland	245	(1)
Registration Under State Blue Sky Laws	245	(5)
SEC, Report on the Uniformity of State Regulatory Requirements for Offerings of Securities That Are Not ``Covered Securities''	246	(4)
Problem	250	(1)
The Debate over Mandatory Disclosure	250	(9)
Problem	252	(1)
Easterbrook & Fischel, Mandatory Disclosure and the Protection of Investors	253	(4)
Notes and Questions	257	(2)
Exempt Transactions	259	(86)
Introduction	259	(1)
The Intrastate Offering Exemption: Section 3(a) (11)	260	(14)
The Scope of the Exemption	261	(1)
Section 3(a) (11) Exemption for Local Offerings, Securities Act Release No. 4434	261	(4)
Notes and Questions	265	(3)
Problems	268	(1)
The Rule 147 Safe Harbor	269	(1)
Exchange Act Release No. 5450	269	(2)
Notes and Questions	271	(1)
Problems	272	(2)
The Private Offering Exemption: Section 4(2)	274	(15)
Mapping the Scope of the Exemption	275	(1)
SEC v. Ralston Purina Co.	276	(2)
Problem	278	(1)
The Relevance of Numbers	278	(1)
Offeree Qualification: Sophistication and Access to Information	279	(1)
Problem	279	(3)
SEC v. Kenton Capital, Ltd.	282	(1)
Notes and Questions	283	(5)
Problems	288	(1)
Resales of Securities Acquired in a Private Offering	288	(1)
Regulation D and the Limited Offering Exemptions	289	(33)
An Overview of Regulation D	290	(1)
Problem	291	(1)
Accredited Investors	291	(2)
Notes and Questions	293	(1)
Problems	294	(1)
The Sophistication Standard of Rule 506	295	(1)
Mark v. FSC Securities Corp.	295	(3)
Problems	298	(1)
Calculating the Number of Purchasers	299	(1)
Problems	299	(1)
Limitations on the Manner and Scope of an Offering	300	(1)
In General	300	(1)
In the Matter of Kenman Corp.	301	(2)
Problem	303	(1)
Activities by Broker-Dealers	304	(1)
Problem	305	(1)
Newsletters	305	(1)
Problems	306	(1)
Investment Databases	306	(1)
The Internet and General Solicitations	307	(3)
Problem	310	(1)
Rule 135C Notices	310	(1)
Is Reform Likely or Desirable?	311	(1)
Determining the Aggregate Offering Price in Offerings Under Rules 504 and 505	312	(1)
Calculating the Aggregate Offering Price	313	(1)
Relevant Amount and Time Period	313	(1)
Problems	314	(1)
Disclosure Obligations in Offerings Under Rules 505 and 506	314	(2)
Notes and Questions	316	(1)
Additional Regulation D Requirements and Features	316	(1)
Limitations on Resale	316	(1)
Rule 505 and the ``Bad Boy'' Disqualifiers	317	(1)
Question	317	(1)
Integration of Offerings: The Safe Harbor	318	(1)
Form D	318	(1)
Problem	319	(1)
Substantial Compliance	319	(1)
Securities Act Release No. 6825	319	(1)
Problem	320	(1)
Foreign Offerings, the Internet, and Regulation D	320	(1)
Problem	321	(1)
Employee Benefit Plans and Contracts Relating to Compensation: Rule 701	322	(5)
Securities Act Release No. 33-7645	322	(1)
Notes and Questions	323	(3)
Problems	326	(1)
Regulation A: Mini-Registration	327	(5)
An Overview of Regulation A	327	(3)
Regulation A and the Internet	330	(1)
Problems	331	(1)
Integration of Offerings	332	(9)
In the Matter of Kevin D. Kunz	334	(3)
Notes and Questions	337	(3)
Problems	340	(1)
State Exemptions	341	(4)
The Uniform Limited Offering Exemption (ULOE)	342	(1)
Nonuniform State Exemptions	343	(1)
Regulation CE: Coordinated Federal Exemption for Issues Exempt Under State Law (California)	344	(1)
Secondary Distributions	345	(50)
The Underwriter Concept and Sales for an Issuer	347	(6)
SEC v. Chinese Consolidated Benevolent Association	348	(3)
Notes and Questions	351	(2)
Problem	353	(1)
Purchase from an Issuer	353	(6)
Investment Intent	354	(1)
Notes and Questions	355	(1)
Problems	356	(1)
Distributions and Trading Transactions Contrasted	356	(2)
Problems	358	(1)
Control Person Distributions	359	(7)
United States v. Wolfson	360	(2)
Notes and Questions	362	(3)
Problems	365	(1)
Rule 144---Safe Harbor for Resales of Control and Restricted Securities	366	(11)
Adoption of Rule 144, Securities Act Release No. 5223	367	(5)
Notes and Questions	372	(3)
Problems	375	(2)
Facilitating an Institutional Market for Unregistered Securities with Rule 144A	377	(7)
Resale of Restricted Securities, Securities Act Release No. 6862	378	(3)
Notes and Questions	381	(2)
Problems	383	(1)
The Section 4(1 1/2) Exemption	384	(6)
Ackerberg v. Johnson	384	(3)
Notes and Questions	387	(3)
Problems	390	(1)
Resales Under the Blue Sky Laws	390	(5)
Isolated Non-Issuer Resale	391	(1)
The Manual Exemption	392	(1)
Unsolicited Offer Exemption	392	(1)
Small Offering Exemption	393	(1)
Problem	394	(1)
Recapitalizations, Reorganizations, and Acquisitions	395	(36)
The ``For Value'' Requirement	395	(15)
Value Is Not Always What It Seems	395	(5)
Problems	400	(1)
Shells and Spinoffs: Creating ``Value''	401	(1)
Spinoffs and the `33 Act	402	(1)
SEC v. Datronics Engineers, Inc.	402	(2)
Notes and Questions	404	(1)
The Regulation of Spinoffs Under the `34 Act	405	(2)
Exchange Act Release No. 27247	407	(2)
Problems	409	(1)
Mergers, Acquisitions, and Recapitalizations	410	(8)
Excerpt from the Release Adopting Regulation M-A, Securities Act Release No. 7760 (Oct. 22, 1999)	412	(3)
Notes and Questions	415	(2)
Problems	417	(1)
Exchanges Under Section 3(a) (9)	418	(5)
Notes and Questions	421	(1)
Problems	422	(1)
Reorganizations Under Section 3(a) (10)	423	(8)
Non-Bankruptcy Reorganizations	423	(4)
The Bankruptcy Act's Collision with the Securities Laws	427	(1)
Disclosure in Chapter 11 Reorganizations	427	(1)
Exemption for Sale and Exchange of Securities	428	(1)
Resales of Securities Received in a Chapter 11 Reorganization	429	(1)
Resales from Debtor's Portfolio	429	(2)
Exempt Securities	431	(50)
An Overview of Section 3	432	(5)
Municipal Securities	437	(17)
The Market and the Players	437	(1)
Disclosure Considerations	438	(1)
Gellis, Mandatory Disclosure for Municipal Securities: A Reevaluation	438	(3)
Credit-Enhancing Devices	441	(1)
Regulation of Offerings	442	(1)
The SEC and Rule 15c2-12	442	(3)
The MSRB and Rule G-17	445	(1)
SEC v. GLT Dain Rauscher	445	(3)
Notes and Questions	448	(2)
Problems	450	(1)
``Pay to Play'' Practices and Rule G-37	450	(1)
Public Financing for the Private Sector	451	(2)
Problem	453	(1)
Securities Issued or Guaranteed by a Bank	454	(5)
The Exemption in General	454	(1)
Collateralized and Pass-Through Securities	455	(2)
Problems	457	(1)
Bank Versus Insurance Company Guarantees and, More Generally, the Future of the Exemption for Banks	458	(1)
Commercial Paper	459	(5)
The Contours of Section 3(a) (3)	460	(2)
Problems	462	(1)
Securitization and Section 3(a) (3)	463	(1)
Securities of Nonprofit Issuers	464	(4)
SEC v. Children's Hospital	464	(2)
Notes and Questions	466	(2)
Problem	468	(1)
Insurance and Annuities	468	(13)
Insurance and Annuity Products as Securities	469	(1)
Variable Annuities	470	(1)
SEC v. Variable Annuity Life Insurance Co. of America	470	(3)
Beyond Variable Annuities	473	(1)
Rule 151	474	(1)
Otto v. Variable Annuity Life Insurance Co.	475	(3)
Notes and Questions	478	(3)
Liability Under the Securities Act	481	(64)
Section 11	481	(35)
Persons Bringing Suit	482	(1)
Hertzberg v. Dignity Partners, Inc.	482	(3)
The Defendants and Their Defenses	485	(2)
Escott v. BarChris Construction Co.	487	(13)
In re WorldCom, Inc. Securities Litigation	500	(3)
Notes and Questions	503	(5)
Problems	508	(2)
Damages	510	(1)
Akerman v. Oryx Communications Inc.	510	(3)
Notes and Questions	513	(3)
Problem	516	(1)
Section 12 (a) (1)	516	(6)
Pinter v. Dahl	516	(4)
Notes and Questions	520	(1)
Problem	521	(1)
Section 12 (a) (2)	522	(15)
By Means of a ``Prospectus or Oral Communication''	522	(1)
Gustafson v. Alloyd Co.	522	(7)
Notes and Questions	529	(4)
Problems	533	(1)
Liability Defense	534	(2)
Notes and Questions	536	(1)
Problem	537	(1)
Section 17 (a)	537	(8)
Aaron v. SEC	537	(1)
Notes and Questions	538	(2)
In re Washington Public Power Supply System Securities Litigation	540	(3)
Note: Private Rights of Action---The Theory	543	(2)
Financial Reporting: Mechanisms, Duties, and Culture	545	(34)
The Disclosure Requirements of Public Companies	546	(8)
The Origins and Metrics for Financial Information	546	(2)
The Exchange Act's Periodic Reporting Obligations	548	(1)
Domestic Issuers	548	(3)
Problem	551	(1)
Foreign Issuers	551	(2)
Compelling Honesty in Mandated Reports Through Private Actions	553	(1)
The ``Fairly Presents'' Requirement	554	(3)
United States v. Simon	554	(3)
Internal Controls	557	(9)
SEC v. World-Wide Coin Investments Ltd.	558	(4)
Notes and Questions	562	(3)
Problems	565	(1)
Strengthening the Integrity of Financial Reporting Process: The Marriage of the SEC and Governance	566	(5)
Audit Committees	566	(1)
Problem	567	(1)
Buttressing the Auditor's Independence	568	(1)
Problem	569	(1)
Executive Certifications and Directors' Signature Requirement	570	(1)
Reconstructing History with Pro Forma Financial Statements	570	(1)
Problem	571	(1)
The Management Discussion and Analysis Section of SEC Filings: Is Past Prologue?	571	(8)
Enron's Contribution to the MD&A	574	(1)
The SEC and the Environment	575	(1)
Prospective Information, Financial Reporting Release No. 36	576	(2)
Problem	578	(1)
Inquiries into the Materiality of Information	579	(74)
Materiality Orthodoxy	580	(4)
Notes and Questions	581	(2)
Problem	583	(1)
Speculative Information and Materiality	584	(9)
Basic Inc. v. Levinson	584	(5)
Notes and Questions	589	(3)
Problem	592	(1)
The ``Total Mix'' of Information and Market Efficiency	593	(9)
Truth on the Market	594	(1)
Wielgos v. Commonwealth Edison Co.	594	(3)
Notes and Questions	597	(3)
Problem	600	(1)
``Puffery''	600	(1)
Eisenstadt v. Centel Corp.	600	(1)
Notes and Questions	601	(1)
Forward-Looking Information	602	(23)
The ``Bespeaks Caution'' Doctrine	605	(1)
Kaufman v. Trump's Castle Funding	605	(4)
Notes and Questions	609	(2)
Statutory Safe Harbor for Forward-Looking Statements	611	(1)
Asher v. Baxter International, Inc.	612	(7)
Notes and Questions	619	(2)
Problem	621	(1)
Duty to Disclose Forward-Looking Information	621	(1)
Notes and Questions	622	(3)
Problems	625	(1)
The SEC and Corporate Governance	625	(28)
Disclosure Beyond the Bottom Line: Management Integrity	625	(1)
In the Matter of Franchard Corp.	625	(6)
Notes and Questions	631	(5)
Problems	636	(1)
The Interface of Materiality and Corporate Governance	637	(1)
In the Matter of W.R. Grace & Co.	637	(4)
Notes and Questions	641	(2)
Problems	643	(1)
The Materiality of Being a ``Bad'' Citizen: Violations of State or Federal Law	644	(1)
SEC v. Jos. Schlitz Brewing Co.	645	(3)
Notes and Questions	648	(4)
Problem	652	(1)
Fraud in Connection with the Purchase or Sale of a Security	653	(92)
Fraud ``In Connection With'' the Purchase or Sale of a Security	654	(7)
SEC v. Texas Gulf Sulphur Co.	654	(4)
Notes and Questions	658	(2)
Problem	660	(1)
Private Rights of Action Under Rule 10b-5	661	(9)
Creation and Controversy	661	(1)
H.R. Rep. No. 104-50	662	(3)
Standing to Sue	665	(2)
Notes and Questions	667	(2)
Problem	669	(1)
Scienter: Hochfelder and Beyond	670	(13)
Defining Scienter	670	(3)
Problem	673	(1)
Pleading Scienter	674	(1)
Nursing Home Pension Fund, Local 144 v. Oracle Corp.	675	(4)
Notes and Questions	679	(4)
Problem	683	(1)
The Affirmative Duty to Disclose	683	(12)
In re Time-Warner Securities Litigation	683	(3)
Gallagher v. Abbott Laboratories, Inc.	686	(3)
Notes and Questions	689	(5)
Problem	694	(1)
Reliance and Causation	695	(8)
Face-to-Face Transactions	695	(1)
Reliance	695	(1)
Affiliated Ute Citizens v. United States	695	(1)
Notes and Questions	696	(1)
Causation	697	(1)
AUSA Life Insurance Co. v. Ernst & Young	697	(5)
Notes and Questions	702	(1)
Open Market Frauds: The Fraud on the Market Theory	703	(19)
Reliance	703	(1)
Basic Inc. v. Levinson	703	(6)
Notes and Questions	709	(3)
Problem	712	(1)
Loss Causation	713	(1)
Dura Pharmaceuticals Inc. v. Broudo	713	(5)
Note	718	(1)
Fraud on the Market: Some Variations	718	(2)
The Reasonableness of the Reliance: Due Care	720	(1)
Problem	721	(1)
Damages	722	(9)
Face-to-Face Transactions	723	(1)
Rowe v. Maremont Corp.	723	(2)
Notes and Questions	725	(2)
Problem	727	(1)
Open Market Transactions	727	(3)
Proportionate Liability	730	(1)
Problem	730	(1)
Federalism and Rule 10b-5: The Problem of Corporate Mismanagement	731	(4)
Problem	734	(1)
Manipulation	735	(10)
Defining Manipulation	737	(1)
United States v. Mulheren	737	(4)
Notes and Questions	741	(1)
Problem	742	(1)
Issuer Repurchases	742	(3)
The Enforcement of the Securities Laws	745	(134)
More on the Private Enforcement of the Securities Laws	745	(55)
Champion of the Little Guy: The Class Action	747	(1)
In re Razorfish, Inc. Securities Litigation	747	(4)
Notes and Questions	751	(2)
The Incentive Structure	753	(3)
Securities Actions After the Private Securities Litigation Reform Act of 1995	756	(1)
Closing the Bypass: The Securities Litigation Uniform Standards Act	757	(1)
Problem	758	(1)
Who's Liable for Securities Fraud: Primary and Secondary Liability	759	(1)
Aiding and Abetting	760	(1)
Central Bank of Denver v. First Interstate Bank of Denver	761	(2)
Note and Questions	763	(1)
Primary Participants	764	(1)
Wright v. Ernst & Young LLP	764	(3)
Notes and Questions	767	(3)
Problems	770	(2)
Control Person and Respondeat Superior Liability	772	(1)
Donohoe v. Consolidated Operating & Production Corp.	773	(2)
Notes and Questions	775	(6)
Problems	781	(1)
Rescission and Restitution of Contracts in Violation of the Securities Laws	782	(1)
Regional Properties, Inc. v. Financial & Real Estate Consulting Co.	782	(6)
Notes and Questions	788	(1)
Problem	789	(1)
Responsibility and Its Costs	790	(1)
Equitable Bars to the Plaintiff's Recovery	790	(2)
Bateman Eichler, Hill Richards, Inc. v. Berner	792	(1)
Indemnity and Contribution	793	(3)
Problem	796	(1)
Statutes of Limitations	797	(1)
Notes and Questions	798	(1)
Problem	799	(1)
Enforcement Actions by the SEC	800	(28)
Investigations	800	(1)
The Investigatory Process	800	(2)
Recommendations to the Commission	802	(2)
Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934 and Commission Statement on the Relationship of Cooperation to Agency Enforcement Decisions	804	(3)
Note and Questions	807	(1)
Problem	808	(1)
Section 21 (a) Reports	808	(2)
Sanctioning and Making Law Through Administrative Adjudications	810	(1)
The Administrative Enforcement Proceeding	810	(1)
The Expanding Panoply of SEC Enforcement Sanctions	811	(2)
KPMG, LLP v. SEC	813	(4)
Notes and Questions	817	(3)
Problems	820	(1)
Injunctions and Other Enforcement Remedies in the Courts	821	(1)
Notes and Questions	822	(6)
The SEC's Power to Discipline Professionals	828	(3)
Problems	830	(1)
The Duties of the Securities Lawyer	831	(30)
A Historic Step Toward Socializing the Securities Lawyer	833	(1)
SEC v. National Student Marketing Corp.	833	(11)
Notes and Questions	844	(2)
Problem	846	(1)
The SEC's Rules of Professional Conduct for Attorneys	847	(1)
Implementation of Standards of Professional Conduct for Attorneys, Securities Act Release No. 8185	848	(6)
Notes and Questions	854	(5)
Problems	859	(2)
Enforcement of the Securities Laws in the Criminal Justice System	861	(18)
The Criminal Provisions of the Federal Securities Laws	862	(2)
United States v. Dixon	864	(2)
Problem	866	(1)
Notes and Questions	866	(2)
Mail and Wire Fraud	868	(2)
Carpenter v. United States	870	(3)
Racketeer Influenced and Corrupt Organizations Act	873	(2)
Notes and Questions	875	(2)
Problem	877	(2)
The Regulation of Insider Trading	879	(56)
Introduction	879	(2)
The Source of a Duty to Abstain or Disclose	881	(6)
Chiarella v. United States	881	(3)
Notes and Questions	884	(3)
``Outsider'' Trading: Corporate Connections	887	(1)
Problem	887	(1)
The Misappropriation Theory	888	(12)
United States v. O'Hagan	889	(8)
Notes and Questions	897	(2)
Problem	899	(1)
Tippers and Tippees	900	(14)
Tipper/Tippee Liability Defined	900	(1)
Dirks v. SEC	900	(6)
Notes and Questions	906	(2)
Problems	908	(1)
Selective Disclosure: Regulation FD	908	(1)
Securities Act Release No. 33-7881	908	(3)
Notes and Questions	911	(2)
Problems	913	(1)
Rule 14e-3	914	(2)
Problem	915	(1)
Enforcement of the Insider Trading Prohibition	916	(3)
Problems	918	(1)
Insider Trading and Section 16	919	(14)
The Scope of Section 16(b)	920	(1)
Feder v. Frost	920	(4)
Notes and Questions	924	(2)
Problem	926	(1)
Executive Compensation	927	(1)
Pension Blackout Periods	927	(1)
Unorthodox Transactions: The Takeover Problem	928	(1)
Texas International Airlines v. National Airlines Inc.	928	(2)
Notes and Questions	930	(1)
Problem	931	(1)
Is There a Need for Reform?	931	(1)
Notes and Questions	932	(1)
Insider Trading Abroad	933	(2)
Shareholder Voting and Going-Private Transactions	935	(32)
The Election of Directors and Other Routine Matters	937	(5)
Mandatory Disclosure	937	(2)
Shareholder Proposals	939	(3)
Problem	942	(1)
The Reach of the Proxy Rules	942	(1)
``Solicitations''	943	(5)
Notes and Questions	946	(1)
Problem	947	(1)
Proxy Fraud	948	(9)
Gould v. American-Hawaiian Steamship Co.	948	(3)
Virginia Bankshares, Inc. v. Sandberg	951	(2)
Notes and Questions	953	(3)
Problem	956	(1)
The One-Share/One-Vote Controversy	957	(2)
Going-Private Transactions	959	(8)
In re Meyers Parking Systems Inc., Exchange Act Release No. 26069	960	(4)
Notes and Questions	964	(2)
Problem	966	(1)
Corporate Takeovers	967	(42)
Introduction: The Policy Dilemma	967	(1)
The Early Warning System: Section 13(d)	968	(10)
Wellman v. Dickinson	970	(4)
Notes and Questions	974	(4)
Problem	978	(1)
Tender Offer Regulation: Controlling the Bidder	978	(22)
Problem	979	(1)
Disclosure by Bidders and the Antifraud Prohibition	980	(2)
Enforcement	982	(1)
Substantive Regulation	983	(1)
Duration	984	(1)
Withdrawal and Proration	985	(1)
``Mini Tender Offers''	985	(1)
The All-Holders/Best-Price Rule	986	(1)
Epstein v. MCA Corp.	986	(3)
Notes and Questions	989	(3)
Problem	992	(1)
``Tender Offer''	992	(1)
SEC v. Carter Hawley Hale Stores Inc.	993	(5)
Notes and Questions	998	(1)
Problem	999	(1)
The Williams Act and the Global Tender Offer	1000	(1)
Tender Offer Defense: Controlling Target Management	1000	(9)
Disclosure and Enforcement	1000	(2)
Schreiber v. Burlington Northern Inc.	1002	(2)
Notes and Questions	1004	(1)
Purchases by (or for) the Issuer of Its Own Securities	1005	(4)
Regulation of the Securities Markets and Broker-Dealers	1009	(70)
The Structure of Regulation and the Evolution of the Securities Markets	1010	(13)
The Old World: The Exchanges and the Over-the-Counter Market	1010	(2)
Market ``Fragmentation''	1012	(1)
Regulation NMS: Exchange Act Release No. 51808	1012	(4)
Notes and Questions	1016	(5)
Self-Regulation Reconsidered in an Era of Private ``For Profit'' Ownership of Markets	1021	(2)
Regulation of the Broker-Dealer Industry: Structure and Oversight	1023	(9)
Entry	1023	(2)
Problems	1025	(1)
Supervising the Conduct of Broker-Dealers and Their Associated Persons	1026	(1)
Self-Regulation	1026	(1)
Direct SEC Supervision of Brokers and Dealers	1027	(2)
In the Matter of John Gutfreund et al.	1029	(2)
Notes and Questions	1031	(1)
The Responsibilities of Brokers to Their Customers	1032	(39)
The Shingle Theory and Fiduciary Obligations	1032	(3)
Problem	1035	(1)
``Know Your Security''	1035	(1)
Hanly v. SEC	1035	(4)
Notes and Questions	1039	(1)
Problem	1040	(1)
Investment Analysis and Their Conflicts of Interest	1040	(2)
Problem	1042	(1)
Suitability	1043	(1)
The Basic Obligation	1043	(1)
Brown v. E.F. Hutton Group Inc.	1043	(3)
Notes and Questions	1046	(4)
Problem	1050	(1)
Suitability, Risk Disclosure, and the Sophisticated Investor	1051	(1)
Banca Cremi, S.A. v. Alex. Brown & Sons, Inc.	1051	(3)
Notes and Questions	1054	(2)
Churning and Other ``Relational'' Frauds	1056	(1)
Merrill Lynch, Pierce, Fenner & Smith v. Arceneaux	1056	(2)
Notes and Questions	1058	(3)
Problem	1061	(1)
Price Protection: Markups and Other Matters	1062	(1)
Arbitration	1063	(3)
Broker-Dealers and Inside Information	1066	(1)
Bateman Eichler, Hill Richards, Inc. v. Berner	1066	(4)
Notes and Questions	1070	(1)
Problem	1071	(1)
Substantive Regulation: Credit and Financial Soundness	1071	(8)
Margin Requirements	1071	(3)
Short Selling	1074	(1)
The Financial Soundness of Broker-Dealers	1075	(4)
The Investment Advisers and Investment Company Acts of 1940	1079	(52)
The Regulation of Investment Advisers	1079	(18)
The Registration Requirement	1080	(2)
Substantive Regulation	1082	(2)
Conduct Regulation: Section 206	1084	(1)
SEC v. Capital Gains Research Bureau Inc.	1084	(3)
Notes and Questions	1087	(1)
Investment Advice, Investment Information, and the First Amendment	1088	(1)
Lowe v. SEC	1088	(5)
SEC v. Wall Street Publishing Institute	1093	(3)
Notes and Questions	1096	(1)
Problem	1097	(1)
Mutual Funds and Other Investment Companies	1097	(34)
The Terminology of the `40 Act	1100	(2)
The Structure and Governance of a Mutual Fund	1102	(1)
Investment Company Act Release No. 24,082	1102	(3)
Problem	1105	(1)
Sales and Redemptions of Mutual Fund Shares	1106	(1)
Prices and Distribution Charges	1106	(3)
Abusive Trading Practices	1109	(1)
Problem	1110	(1)
Sales Literature and Advertising	1110	(2)
The Compensation of Investment Company Affiliates	1112	(1)
Gartenberg v. Merrill Lynch Asset Management Inc.	1112	(4)
Notes and Questions	1116	(3)
Problem	1119	(1)
Self-Dealing by Investment Company Affiliates	1119	(1)
Principal Transactions	1120	(1)
Joint Transactions	1121	(1)
SEC v. Midwest Technical Development Corp.	1121	(3)
Notes and Questions	1124	(1)
Other Conflict Rules	1125	(1)
Problem	1126	(1)
The Definitional Problem	1126	(2)
Problem	1128	(1)
Hedge Funds	1128	(3)
Transnational Fraud and the Reach of U.S. Securities Laws	1131	(40)
The Extraterritorial Application of U.S. Securities Laws	1131	(35)
In General	1131	(1)
Kauthar SDN BHD v. Sternberg	1131	(6)
Jurisdiction Based on Effects	1137	(1)
Schoenbaum v. Firstbrook	1137	(3)
Notes and Questions	1140	(2)
Jurisdiction Based in Whole, or in Part, upon Conduct	1142	(1)
Bersch v. Drexel Firestone, Inc.	1143	(5)
Notes and Questions	1148	(2)
Problems	1150	(1)
The Restatement (Third) of Foreign Relations Law of the United States	1151	(1)
Europe and Overseas Commodity Traders, S.A. v. Banque Paribas London	1152	(4)
Problems	1156	(1)
Choice of Law Options: The Relevance of Foreign Law in Securities Litigation	1157	(2)
Bonny v. The Society of Lloyd's	1159	(3)
Notes and Questions	1162	(3)
Problem	1165	(1)
Enforcement Challenges Presented by an Internationalized Securities Market	1166	(5)
Unilateral Enforcement Efforts	1166	(1)
Discovery Sanctions	1166	(1)
The Reach for Assets	1167	(1)
Bilateral Enforcement Efforts	1168	(1)
Multilateral Enforcement Efforts	1169	(1)
SEC Announces IOSCO Unveiling of Multilateral Agreement in Enforcement Cooperation	1169	(2)
Table of Cases	1171	(10)
Index	1181