_______________________________, as it created a myriad of legal responsibilities and potential liabilities that impacted their business models. Companies came to recognize that they needed legal counsel and internal systems in place to ensure that they were in compliance. The liabilities for not complying with ___________________________________ include not only monetary fines, but also civil penalties, and in some cases, criminal proceedings. Insider trading is one violation that can result in criminal charges.

The Securities Exchange Act of 1934

Anti trust Act

Sherman Act

FTC Act

While laws vary from country to country, _______________________________ can be understood by what the SEC defines as the buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, on the basis of material, nonpublic information about the security.

insider trading

fraud

unfair trade practice

International law

The word ___________________________ comes from the Latin word Figure 14.1 (Credit: Sam Valadi/ flickr/ Attribution 2.0 Generic (CC BY 2.0)) 14 Securities Regulation for trust and refers to someone who is charged with the responsibility to act in the best interest of the other party. However, they are often aware of information that the public is not. This knowledge has important implications as addressed by Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, which prohibits the purchase or sale of securities on the basis of "material nonpublic information,"; meaning information of any kind that would impact the market price of securities that has not been disclosed to the public, i.e., insider information.

fiduciary

fraud

insider-trading

Business ethics

__________________________________are those officers, directors, and beneficial owners who own more than 10% of a class of securities, registered under Section 12 of the Securities Exchange Act of 1934. ____________________________________ must file a statement of ownership with the SEC to be in compliance, and as of August 27, 2002, the SEC implemented new rules that shortened the time period to report insider transactions. It is important for a company to have internal controls and a system to ensure their ___________________________________ are reporting their trades in a timely fashion. Companies that do not implement and enforce compliance procedures can become liable for the actions of their employees who fail to follow the law.

Corporate insiders

SEC police

white collar employees

CIA and FBI

It was amid this social and economic unrest that Congress passed the Securities Exchange Act of 1934. Signed by President Franklin D. Roosevelt, the Securities Exchange Act of 1934 recognized that the stock market crash of _______________________________was caused by wild speculation, large and sudden fluctuations, and manipulations involving securities.

1929

1925

1923

1928