What is Section 10 B of the Securities Exchange Act?
What is Section 10 B of the Securities Exchange Act?
Section 10(b) makes it unlawful to “use or employ, in connection with the purchase or sale of any security” a “manipulative or deceptive device or contrivance in contravention of such rules and regulations as the [SEC] may prescribe.” 15 U.S.C. § 78j(b).
What is a Section 16 insider?
Section 16 imposes filing standards for “insiders,” and defines insiders as any officers, directors, or stockholders who possess stock that directly or indirectly results in beneficial ownership of more than 10% of the company’s common stock or other class of equity.
What are Section 16 resolutions?
Board resolutions approving the acquisition of certain buyer derivative or equity securities by persons who are or will become officers and directors of the buyer in connection with a merger.
What is section 10 b and Rule 10b-5 of the 34 Act?
Section 10(b) of the Exchange Act and Rule 10b-5 prohibit material misrepresentations and misleading omissions in connection with the purchase or sale of securities.
What damages are available to a plaintiff under section 10 B and Rule 10 b )( 5 of the Securities Exchange Act of 1934?
In an SEC action under 10(b)(5), the civil penalty for gaining illegal profits with nonpublic information is three times the profits gained. The statute of limitation is 5 years from the wrongful transaction. Note: A purchaser may also be entitled to receive consequential damages from the purchase of securities.
Who does Rule 10B-5 apply to?
In sum, SEC Rule 10b-5 is applicable to any person that commits securities fraud, i.e., the intentional misrepresentation of material information in connection with securities trading, including insider trading.
What is a Section 16 form?
Section 16 – Forms 3, 4, and 5 Section 16 of The Securities Exchange Act of 1934 requires corporate insiders to publicly disclose their company affiliations, material changes in their holdings or unreported insider transactions through various regulatory filings with the US Securities and Exchange Commission (SEC).
What is the requirement of section 16 of the Act?
The rules under section 16 of the Act apply to any class of equity securities of an issuer whether or not registered under section 12 of the Act. The rules under section 16 of the Act also apply to non-equity securities as provided by the Investment Company Act of 1940.
What is Section 16b?
The short-swing profit rule, also known as the Section 16b rule, is an SEC regulation that prevents insiders in a publicly traded company from reaping short-term profits.
Who is a section 16 officer?
Section 16 Officer means a president, vice president, secretary, treasurer or principal financial officer, comptroller or principal accounting officer, and any person routinely performing corresponding functions with respect to the Company.
What is a 10b-5 action?
SEC Rule 10b-5, states that it is illegal for any person to defraud or deceive someone, including through the misrepresentation of material information, with respect to the sale or purchase of a security.
What is a 10b-5 opinion?
A letter of counsel, sometimes referred to as a due diligence opinion, generally based upon an investigation of specified facts and addressing the accuracy and completeness of the official statement.