#SECURITIES ACT S 1 REGISTRATION#
Often, the issuer will submit the prospectus with the registration statement. The requirements are extensive, and include descriptions of the issuer's business, past performance, information about the issuer's officers and managers, audited financial statements, information on executive compensation, risks of the business, tax and legal issues, and the terms of the securities issued.
#SECURITIES ACT S 1 FULL#
Section 7 gives the SEC full authority to determine what information issuers must submit, but generally required is information about the issuer and the terms of the offered securities that would help investors form a reasoned opinion about the investment. The SEC rules dictate the appropriate registration form, which depends on the type of issuer and the securities offered. Second, the issuer must submit additional information that does not go into the prospectus but is accessible to the public.First, the issuer must submit information that will form the basis of the prospectus, to be provided to prospective investors.
The actual registration process is laid out in Section 6, under which registration entails two parts: Section 5 regulates the timeline and distribution process for issuers who offer securities for sale. Under Section 5 of the Securities Act, all issuers must register non-exempt securities with the Securities and Exchange Commission (SEC). In reality, due to a number of exemptions (for trading on the secondary market and small offerings), the Act is mainly applied to primary market offerings by issuers. The Securities Act effectuates disclosure through a mandatory registration process in any sale of any securities. The goal is to provide investors with accurate information so that they can make informed investment decisions. In this context, "material" means information that would affect a reasonable investor's evaluation of the company's stock. The Securities Act serves the dual purpose of ensuring that issuers selling securities to the public disclose material information, and that any securities transactions are not based on fraudulent information or practices. Therefore issuers have an incentive to present the company in a way that is attractive to investors.
These companies must attract potential investors. Companies which issue securities (called issuers) seek to raise money to fund new projects or investments or to expand their operations. Congress primarily targeted the issuers of securities. WeWork urged investors to refer to its IPO prospectus, not recent news articles, when evaluating the company.The Securities Act was Congress's opening shot in the war on securities fraud. If a court decided that WeWork violated quiet period rules, the company said it would be required to repurchase all shares sold in its IPO at their original purchase price for one year following the violation, "plus statutory interest." "We do not believe that our involvement in the May 2019 online news articles or other news articles constitutes a violation of Section 5 of the Securities Act," WeWork said in its S-1 filing. The company denied violating quiet period rules and said it would "vigorously" contest any claims that it committed a Securities Act violation. In both articles, Neumann and other WeWork executives discussed the company's "business strategy and results," the filing states. As the SEC states, the quiet period "extends from the time a company files a registration statement with the SEC until SEC staff declare the registration statement 'effective.'" WeWork announced in April that it had filed confidentially for an IPO in December 2018.
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