Federal Securities Law

Securities Act of 1933 - This Act covers registration of securities and disclosure of offering information. The SEC does not try to review securities to see if they are a "good deal" for investors, it only requires adequate disclosure of information so the investor can make their own decision. If you purchase securities and suffer a loss and there was inadequate disclosure, you may be able to recover your loss under this act. Some securities offerings are exempt from registration under the '33 Act including:

• private offerings to a limited number of persons or institutions;
• offerings of limited size;
• intrastate offerings; and
• securities of municipal, state, and federal governments.

Securities Exchange Act of 1934 - gives the SEC to power to require periodic reporting by companies that issue securities. All companies with more $10 million in assets and 500 owners must file these reports. Some of the better known reports are the 10-K, 10-Q and 8-K. Other required reports include proxy statements, tender offers and insider trading reports. The '34 Act also gives the SEC broad authority over the securities industry including the self-regulatory organizations (SROs) such as the New York Stock Exchange, American Stock Exchange and the National Association of Securities Dealers, which operates the NASDAQ system.

Public Utility Holding Company Act of 1935 - Covers interstate holding companies in the electrical or natural gas business.

Trust Indenture Act of 1939 - covers the sale of bonds, debentures, and notes that are offered for public sale. Even though such securities may be registered under the Securities Act, they may not be offered for sale to the public unless a formal agreement between the issuer of bonds and the bondholder, known as the trust indenture, conforms to the standards of this Act.

Investment Company Act of 1940 - covers companies such as mutual funds that sell their securities to the public and engage primarily in investing other securities.

Investment Advisers Act of 1940 - covers companies and individuals that receive compensation for advising about securities investments. It generally only applies to advisers with more than $25 million under management.

Sarbanes -Oxley Act of 2002 - was signed by President Bush on July 30th. This Act is the biggest expansion of securities laws since the Great Depression. The Act included new rules on disclosure, accounting, corporate governance and penalties.