Research Handbook on Securities Regulation in the United States
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Research Handbook on Securities Regulation in the United States

Edited by Jerry Markham and Rigers Gjyshi

This fascinating Handbook provides a clear explanation of the securities market regulation regime in the United States. A diverse set of contributors offer a comprehensive overview of the regulatory process, Dodd-Frank, the principal securities statutes, and the regulators and market participants involved. In addition to a general summary of the topic, this volume provides detailed explanations of the process for registering securities, exemptions from registration, secondary distributions, and the underwriting process. Scholars and students of financial law, banking and regulatory law will find this book a useful resource, as will attorneys, compliance professionals, risk-mitigation professionals and corporate leaders.
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Chapter 2: The definition of “security” under the federal securities laws

Arthur B. Laby


Definitions are essential in any regulatory regime and the federal regulation of securities is no exception. The application of multiple statutes and hundreds of administrative rules turns on the definition of a single term, such as “offer,” “sale,” “issuer,” or “underwriter.” The most fundamental of those terms under the federal and state securities laws is the term “security.” Without the presence of a security, federal and state securities laws are unavailing. This Chapter provides a brief overview of the definition of “security” under the federal securities laws. The definition of “security” appears in securities statutes, case law, and numerous interpretations by the U.S. Securities and Exchange Commission (“SEC” or “Commission”), the primary regulator with responsibility to implement and enforce the federal securities laws. Whether a security exists has far-reaching consequences for issuers and promoters offering financial arrangements to customers or clients. Under the Securities Act of 1933, the first of the federal securities laws passed in the aftermath of the Great Crash of 1929, an investment offered to the public generally must be registered with the SEC if the investment being offered is a security. Moreover, the Securities Act provides a private right of action against anyone who offers or sells a security in violation of the registration provision. The damages are a return of the purchase price of the security to the purchaser.

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