This course reviews the law on the issuance and trading of securities, especially traditional equity instruments. This class is especially relevant to students planning a career in either corporate or investment finance. But, the course should be useful to most students. Even if a business manager, consultant, or entrepreneur is not directly involved with the sale or trading of securities, knowledge of the legal structure governing access to and participation in the public markets is important. The concepts apply in the normal operation of corporations, when accessing the equity markets, and in extraordinary transactions such as mergers and acquisitions. The course will begin by covering the legal framework that applies to public offerings, focusing on registration requirements. It will discuss when companies may rely on an exemption from the registration requirements, including exemptions available to offerings by non-US companies. This component of the class will end with a discussion of the consequences of a failure to register or defective registration.
The course also will consider issues that companies face when their securities are traded, especially when they are traded on public markets. Topics here include periodic disclosure requirements as well as proxy preparation and solicitation. Finally, the coverage of securities trading will conclude with an analysis of tender offer situations.
The third major section of the class will address antifraud measures. One major antifraud area that applies to corporate insiders, as well as to investment bankers, accountants, and others who have access to important corporate information is insider trading. A second occurs in the context of fraudulent or misleading statements, nondisclosure, or discriminatory disclosure of important information. This portion of the class will end with a discussion of the potential liability of the various company employees and advisors who engage in such actions.
The class will focus heavily on actual and expected types of legal claims faced by corporations and application of the laws in actual and hypothetical situations. As a result, many of the class discussions will concentrate on court opinions and litigated fact situations.
This course fulfills the MBA law/ethics requirement.