Rule 10b-5 (the primary prohibition against securities fraud) does not touch on aiding and abetting in terms of securities liability. See Central Bank of Denver v. First Interstate of Bank of Denver, 511 U.S. 164 (1994); Stoneridge Investment Partners LLC v. Scientific-Atlanta Inc., 552 U.S. 148 (2008). This is important for a number of reasons….
Legal Articles
"Churning" Securities
I touched on how both the federal and Missouri State security laws work in a post entitled Missouri Securities Fraud. In that post, I pointed out that brokers and investment advisers with authority to trade securities are fiduciaries to their clients. As such, many of the securities laws apply directly to them. One of the…
Liability from Missouri Securities Laws
Missouri Securities Fraud can result in extensive civil liability and criminal liability. Several different types of people — even those not directly partaking in a securities transaction — can experience liability and in several different ways. A person acting as a broker-dealer/agent can be liable to the customer. An investment advisor can be liable to…
Missouri Securities Fraud
As I mentioned in my Insider Trading post, securities are subject to regulations both at the federal and state levels. The Missouri Securities Act of 2003 pertains to all transactions in securities, regardless of whether they need to be registered (see: Exemptions from Securities Registration). The primary anti-fraud section of the Missouri Act is codified…
Exemptions from Securities Registration
Under federal law, a “security” is defined liberally in 15 U.S.C. 77b(a)(1) as: any note, stock, treasury stock, security future, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest…