Securities and Exchange Act

Marie Broadturn

Financial Reporting II

The Securities Act of 1933 was the first securities act that congress put into effect to protect consumers (Hazen, 2003). The purpose of this act was so investors could make informed decisions before they purchased securities (Sarkar). Before issuing stock to the public a corporation must register the security with the Security and Exchange Commission (SEC) using a registration statement (Securities Act of 1933, 2012). According to Section 6 (a) of the Securities Act of 1933 there must be three copies of this statement including one that must be signed by each issuer, its principal executive officer, its principal financial officer, its principal accounting officer, and the majority of its board of directors or persons performing similar functions. Any signature that is signed without permission of the signer will constitute a violation of this section.

When the registration is filed the applicant needs to pay the SEC the application fee at a rate of $92 per $1,000,000 of the maximum aggregate price that the securities are to be offered (Securities Act of 1933, 2012). This rate is adjusted accordingly for each fiscal year.

Section 7 describes the information required for a registration statement. If the security is not issued by a foreign government it must use Schedule A and contain all necessary documents (Securities Act of 1933, 2012). If the security is issued by a foreign government than Schedule B must be used.

Schedule A has 34 sections that must be filled out for the security being issued (Securities Act of 1933, 2012). The beginning starts with basic information such as the name of the business, the state it will operate in, and the primary address of the business office. The names and addresses of the directors and underwriters as well as any person owning more than 10% of the stock being issued must be included in the registration. The amount of securities the above people currently hold and the amount...