Newsletters

The Quiet Period Pending Securities Registration Statement Effectiveness

There is a "quiet period" between the time that a company files a registration statement with the Securities and Exchange Commission for a new public securities offering and the time that the Commission declares the registration statement effective. During the quiet period, referred to as the "waiting period" also, the company and related parties are prohibited by federal securities laws from releasing information to the public that could be construed as promoting sale of the securities covered by the as yet unapproved registration statement.

Rulemaking by the Securities and Exchange Commission

Federal agencies adopt rules to implement laws. Following the stock market crash in 1929, laws were passed to reform securities markets and to broaden the amount and accuracy of information to be made available to investors by issuers of securities. Those laws included the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Company Act of 1940. The more recently enacted Sarbanes-Oxley Act of 2002 provided additional requirements for corporate governance and disclosure of information.

Business Law

Companies Listed on the New York Stock Exchange)

Business Judgment Rule

The business judgment rule protects a director(s) from personal liability if he or she has performed diligently and carefully in legitimate furtherance of corporate objectives and purposes and has not acted fraudulently, illegally, or otherwise in bad faith. The business judgment rule may be codified, but it is largely a matter of judicial interpretation and application. The business judgment rule is frequently invoked in shareholder damage suits against a director or board of directors. Courts generally acknowledge that the business judgment rule either does or may apply to corporate officers.

Investment Manager Reports To Be Filed With the Securities and Exchange Commission

Institutional investment managers must report to the Securities and Exchange Commission on Form 13F those securities registered under Section 13(f) of the Securities Act of 1933 over which the investment managers exercise discretion.