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Questions tagged [securities]

This tag is for tradeable financial assets (securities)

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If I'm about to do something that will cause a stock price to move, can I legally profit from it?

For example, suppose that instead of flying planes into the World Trade Center, Osama bin Laden had decided to fly planes into Microsoft Campus. He can therefore predict with high confidence that MSFT ...
Allure's user avatar
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0 votes
1 answer
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Do assets custodied by a trustee form part of the Bankruptcy Estate if the trustee enters Chapter 11 Bankruptcy [closed]

I own some securities giving me a beneficial interest in an LLC (let's call it LLC A) which were issued to another LLC (let's call it LLC B) as a custodian and trustee. LLC B has entered Chapter 11 ...
user53910's user avatar
0 votes
2 answers
141 views

Managing Money for a friend

Person X asks person Y to manage a brokerage account for him. Person X asks that the money be managed in a conservative way. Person Y agrees to do. Person X does not compensation person Y in any way. ...
Bob's user avatar
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2 votes
1 answer
108 views

If issuers have to file Form D to easily sell shares of private company registered in USA , then are private company investments not "confidential?"

If issuers of securities have to file Form D to easily sell shares or make private placements of private company registered in USA , then are private company investments not "confidential? ...
Bauu's user avatar
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2 votes
1 answer
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Is the Howey test pertaining to the source of profits or the receiving of profits?

The Howey test states: "investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others" Is this "profits to be derived from ...
user3000992's user avatar
6 votes
1 answer
305 views

Would a poker buyin share voucher be a "security"?

Hello I am trying to learn more about securities and really confused by the laws regarding unregistered securities in the US. NJ state if that helps too. I made a scenario and I am needing help to ...
user3000992's user avatar
3 votes
1 answer
43 views

Trading authority and incapacitation

Person X gives Person Y the authority to trade person's X brokerage account and to take money out of the account for the benefit of person X. It is not a durable power. After some time, person Y has ...
Bob's user avatar
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1 vote
1 answer
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What are the steps to collect against a SAFE investment contract? [closed]

I have a fund that signed a SAFE (simple agreement for future equity) and wants to invest $400k in my company. It has been 2 months and they haven't sent the money. This had materially impacted my ...
pjonson2's user avatar
6 votes
2 answers
707 views

Is there a requirement to provide personal information other than identity to a financial institution to activate a Power of Attorney?

If a person has a durable power of attorney that becomes active in the event the Principal becomes disabled, is an investment company for the Principal required to obtain personal financial ...
Michael Hall's user avatar
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1 vote
0 answers
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Does an RIA need to keep any paper work when an order is not filled

A RIA (registered investment advisor) places an order to buy some stock for a customer in the customer's account. He has discretion on the account. It is a limit order good for the day. The order is ...
Bob's user avatar
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4 votes
4 answers
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Is it ever illegal to spread true facts with malicious intent?

Crimes such as defamation usually require that the statement being said is false - truth is an absolute defense. Are there any situations or jurisdictions where truth is not a defense against ...
Stack Exchange Supports Israel's user avatar
1 vote
0 answers
41 views

Proceeds from a law suit and taxes

Suppose that an investor has owned the XYZ stock for a long period of time. It is then taken over by the ABC company and the investor has a long term capital gain. A couple of years later, a class ...
Bob's user avatar
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1 vote
1 answer
46 views

Does SIPC offer protection in any scenarios other than a brokerage firm being liquidated due to being financially troubled?

I can imagine funds being lost due to hackers or fraudsters stealing assets from an account, or simply an unreasonable brokerage institution refusing access to a customer of their assets. Does SIPC ...
UBSOS23's user avatar
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0 votes
1 answer
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Is it legal to use somebody elses login to trade a brokage account?

Person A establish a brokerage account with an online brokerage XYZ. He then gives person B authority to trade the account. The XYZ brokerage account gives person A and person B to different user ...
Bob's user avatar
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2 votes
2 answers
186 views

Does non-objectively justifiable optimism constitute insider trading?

As a hypothetical: Company A is a competitor of Company B. Management of Company A thinks that Company A is so much better than Company B that Company B will soon go out of business. After getting ...
imadethisacct2askdumbquestions's user avatar
0 votes
1 answer
79 views

Copying a customer's orders

Would this be a legal thing to do? A major brokerage firm has many active customer accounts. It looks at the performance of these accounts. Let say it finds several where the rate of return per month, ...
Bob's user avatar
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1 vote
2 answers
83 views

Why doesn't the Trust Indenture Act apply to Securities issued by the United States Treasury?

The Trust Indenture Act states: The provisions of this subchapter shall not apply to any of the following securities: (4)(A) any security exempted from the provisions of the Securities Act of 1933 [...
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0 votes
0 answers
161 views

Legal way to trade us futures and options from India?

I wanted to know what is the legal way to trade us futures and options for someone who is resident of India. Currently AFAIK it is illegal for Indians to trade in speculative instruments like futures ...
Stupid_Intern's user avatar
2 votes
1 answer
118 views

Two Margin accounts at the same Brokerage Account

Both E*Trade and TD Ameritrade have a policy that says an investor cannot have two margin accounts with them. He can have two or more cash accounts. Neither firm could tell me why they have this ...
Bob's user avatar
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-1 votes
2 answers
88 views

Are claims that Elon Musk cannot back out of buying Twitter after agreeing to buy before actually doing so valid without a full deposit in escrow? [closed]

Elon Musk must close Twitter deal by end of this week or face trial. (CNN Business, October 24th, 2022)
Nick Carducci for Carface Bank's user avatar
-2 votes
1 answer
96 views

500+ multi member LLC, Non SEC registration needed, avoid classification as Investment Club

Let's say that I want to open a multi member LLC without needing SEC registration but staying compliant, for that case I'll appreciate you can help me with some questions please. Let's say that the ...
jfcabreras's user avatar
2 votes
0 answers
158 views

Nasdaq API Usage

I, and others, have discovered that Nasdaq's website is powered by an API which has the endpoint api.nasdaq.com. As far as I can tell, it is fully legal to scrape Nasdaq's website (correct me if I'm ...
luke's user avatar
  • 21
2 votes
0 answers
30 views

Are there specific laws regarding selling code that executes financial trades?

If I want to start a business selling custom trading code for e.g. stocks/crypto what legal aspects should I be aware of? Are there general examples of the kinds of contract you might want to absolve ...
vopsea's user avatar
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1 vote
2 answers
137 views

Is this a legal way to make money or buy an entire company?

A hypothetical very wealthy investor (which could be a large public traded company) feels that the XYZ stock is undervalued. The investor buys about 4% of the company. He then offers to buy the whole ...
Bob's user avatar
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3 votes
1 answer
167 views

Do I need to take any legal precautions for my stock prediction app?

Suppose that a developer (D) creates an app that lets users enter a ticker and get an estimate for its future price. No other advice on whether to buy or sell will be displayed; only the forecasted ...
turnip's user avatar
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1 vote
1 answer
31 views

What, if anything, in the United States, makes executing a private loan agreement different from issuing a private placement bond?

What, if anything, in the United States, makes executing a private loan agreement different from issuing a private placement bond? In other words, how does a corporation know whether to always, ...
Security Concerns's user avatar
1 vote
1 answer
83 views

If I buy a stock is the stock trade reported to the SEC

If I buy a stock through a brokerage firm, is that trade reported to the SEC? Can the SEC know what stocks I have in my brokerage account without a warrant? I am in the United States.
Bob's user avatar
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1 vote
1 answer
201 views

Does the SEC/FINRA have the legal authority to block a SPAC merger if it doesn't violate antitrust laws?

On October 20th, 2021, Digital World Acquisition (DWAC) announced a definitive merger agreement with Trump Media and Technology Group. However, in early December, it was revealed that the SEC and ...
user27343's user avatar
  • 538
0 votes
1 answer
40 views

In what circumstances does an investment advisor have to register as a money transmitter?

As far as I understand it, an SEC-registered investment advisor that doesn't hold the client's assets doesn't need extra regulation pertaining to custody. If a robo-advisor like Betterment (although I ...
VampireTooth's user avatar
2 votes
1 answer
183 views

Is it still insider trading if from the outside with no breach of trust?

SEC Rule 10B5-1 prohibits: the purchase or sale of a security of any issuer, on the basis of material nonpublic information about that security or issuer, in breach of a duty of trust or confidence ...
nellapizza's user avatar
0 votes
1 answer
28 views

Stock News Letters [duplicate]

If a company publishes a new letters (for a fee) which states which stock to buy this month because they feel the company has very strong growth. Does the company have to be an Registered Investment ...
Bob's user avatar
  • 1,221
1 vote
2 answers
48 views

Buying back shares and insider Trading

Imagine the CEO of a major corporation knows that in a few days knows the corporation will be issuing an earnings report that will be above expectations. As such, he believes the price of the stock ...
Bob's user avatar
  • 1,221
1 vote
1 answer
510 views

Is it legal to sell stock market predictions online?

Suppose that a developer has built an AI which predicts the day's closing price given the stock's history and current open price, and has also built a website around it, on which such predictions are ...
Mason Choi's user avatar
1 vote
1 answer
126 views

On the Legality of Teens Trading Stocks---Cf. Barron's (6/14): ``Here Come the Teens: New Apps Make it a Cinch for Teenagers to Trade Stocks...''

It appears according to an article (`Here Come the Teens: New Apps Make it a Cinch for Teenagers to Trade Stocks. Are They Investing---or Gambling'') which appeared in Barron's this week, minors are ...
DDS's user avatar
  • 1,273
6 votes
2 answers
281 views

Can a natural person issue stock in a private project they’re working on?

I’m trying to find out about the legality of issuing stock in some project you’re working on if you’re just a natural person, by which I mean that you haven’t knowingly founded any sort of ...
Dawn Drescher's user avatar
2 votes
1 answer
415 views

What makes a shareholder a "shareholder of record"?

In public companies filling some reports with the SEC (10K for example), there is a mention of the number of shareholders of record. Example: "As of April 20, 2021, we had approximately 40 ...
Richard Miller's user avatar
0 votes
1 answer
104 views

Money Management and Personal Trading

Suppose person X is managing money for person Y without compensation. That is, person X has trading authority over person's Y account. In this case, I claim person X is not an Investment Advisor for ...
Bob's user avatar
  • 1,221
-2 votes
1 answer
63 views

Can my bot trade crypto for others? [closed]

Is it legal if someone gives me their API key for phemex, with the intention that my bot ( which predicts and can trade each minute ) will trade for them? Alternatively, if I license software which ...
dansch's user avatar
  • 99
2 votes
1 answer
69 views

Stocks and social media (pump & dump?)

Some wealthy and famous individuals have the power to influence the stock market simply by posting on social media. For example, a famous billionaire tweets "I'm excited to see what ACME develops ...
user45623's user avatar
  • 207
1 vote
1 answer
90 views

Technical securities and commodities law question (United States)

I have a question about the intersection of technical math as it relates to capital and commodities markets with technical law. It asks, "At what point, if any, would a crime be committed?" ...
Dave Harris's user avatar
0 votes
1 answer
4k views

Does "insider trading" apply to private companies?

In America, "pitching" to investors is how capital is often raised. What I don't understand is why this is legal: You supply private information to the investor, who decides to buy stock in your ...
MWB's user avatar
  • 1,300
0 votes
2 answers
166 views

Is it legal to short a company's stock and then blog about why you did it?

In America, is it legal to short a company with which I never had any affiliation and then write a negative blog post about it affecting the company's stock price? More specifically, suppose ...
MWB's user avatar
  • 1,300
-1 votes
1 answer
83 views

Bonds of foreign reputed companies and Army bonds

Do the functioning of Bonds cease after the date of maturity of the bonds? In what respects Army bonds differ from Bonds of foreign companies operating in INDIA? if ...
user avatar
4 votes
2 answers
607 views

If I discover information about a company through personal investigation can I act on it without being guilty of insider trading?

Let's say I'm a skilled PI who has, through detailed investigation followed a paper trail back and discovered that Soylent Green is people! (err..spoiler warning?) I am now aware of information that ...
dsollen's user avatar
  • 8,500
2 votes
2 answers
454 views

Why is Front Running markets not treated as insider trading?

Front-Running is described in the book Flashboys and relies on an information advantage, that is apparently provided by the exchanges to a select few. Is said practice somehow different from ...
gatorback's user avatar
  • 7,169
1 vote
0 answers
23 views

How to understand submission deadlines and reporting regulations of the European Securitisation Regulation?

I am currently reading through the Reporting Instructions for securitisations which states for non-ABCP securitisations on page 7: Information on the underlying exposures for non-ABCP ...
thelawful's user avatar
4 votes
1 answer
725 views

What laws protect minority share holders from having their share rights changed by special resolution?

A special resolution done by majority share holders can simply change the rights of certain shares and make them useless. They can reduce the share's voting rights or reduce dividend payment.
user1034912's user avatar
  • 1,511
1 vote
2 answers
311 views

Why can't a cryptocurrency be classified the same way as airline points or store rewards?

According to an article I read on Law360 (paywalled), Facebook's Libra could never be successful as envisioned because the tax reporting burden on it will be too high. Essentially, users will ...
CodyBugstein's user avatar
1 vote
1 answer
60 views

Definition of privileged information in investor law

Person X makes a scientific discovery about some new metallic alloy. She then reasons that as a result of its applications, the market for some other metal will drop. Is she allowed to short the ...
Suresh's user avatar
  • 13
11 votes
2 answers
605 views

Can Trump legally sell stocks on Friday, tweet about imposing tariffs on Sunday and then buy more of the stocks back on Monday?

Trump could have made a lot of money by selling stocks before tweeting about imposing tariffs on China and then buying more of them back when the price of the stocks has dropped. Would this fall under ...
Count Iblis's user avatar