Questions tagged [securities]

This tag is for tradeable financial assets (securities)

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11 votes
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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
10 votes
2 answers
362 views

Would it be illegal for Donald Trump to short twitter, then leave the platform?

Presumably if Trump were to stop tweeting and move to a different social media platform (e.g., Instagram), Twitter's value would decrease significantly (source estimating Trump's value to Twitter). ...
YPCrumble's user avatar
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8 votes
4 answers
484 views

Is an 'honest', tongue-in-cheek ponzi scheme ICO still illegal to operate?

I've just come across what appears to be a deliberate parody ICO known as PonziCoin. It declares itself to be "The World's First Legitimate Ponzi Scheme", on the grounds that it is open and ...
user avatar
6 votes
2 answers
273 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
6 votes
2 answers
706 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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6 votes
1 answer
303 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
6 votes
1 answer
1k views

Could the Intel CEO be accused of insider trading?

A few weeks back, the Intel CEO sold all the company shares he was allowed to. Yesterday, it was reported that a big security flaw existed in virtually all Intel processors sold in the last decade. ...
Nico's user avatar
  • 163
4 votes
4 answers
804 views

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 ...
user253751's user avatar
4 votes
1 answer
719 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
  • 1,501
4 votes
2 answers
503 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
  • 8,400
3 votes
2 answers
269 views

Using insider trading knowledge to trade on a competitor

In Australia, there are two major grocery companies, Woolworths and Coles. Now suppose I work for Woolworths and I become aware of a technological breakthrough that will dramatically increase the ...
Kenshin's user avatar
  • 343
3 votes
3 answers
681 views

Could leaking insider information eliminate insider trader concerns?

Suppose I possess some non-public information about Company X. I want to trade Company X's stock for reasons unrelated to the information (e.g. I believe the stock market as a whole is going to tank ...
Daniel's user avatar
  • 209
3 votes
1 answer
95 views

What is the "penalty" for placing fake orders of Treasury bonds?

I did ask this question to TreasuryDirect, but received no answer. Most weeks the U.S. Government issues Treasury bond products, for terms as short as four weeks. You receive the face value but pay ...
Clint Eastwood's user avatar
3 votes
1 answer
161 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
  • 125
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
  • 1,163
2 votes
1 answer
351 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
2 votes
1 answer
1k views

Is wash trading illegal?

I put some money in Bitforex and some say that they do wash trading. This is where they inflate the volume of trade in their sites. Is it legal? Also, what's the jurisdiction of Bitforex?
user4234's user avatar
  • 1,091
2 votes
2 answers
438 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
  • 7,195
2 votes
1 answer
170 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
2 votes
2 answers
232 views

Are companies allowed to trade securities based on internal user data?

Take a company like Google, that has access to real time information on what billions of people want at any given moment, their plans for the future - not to mention the entire email archives of ...
CodyBugstein's user avatar
2 votes
1 answer
120 views

Can someone short a stock if they have information that is likely to cause the stock to drop?

Suppose company X has a product P. An independent InfoSec expert M found a vulnerability in product P that can turn it into a significant safety hazard. Under the responsible disclosure guideline, M ...
Maxthon Chan's user avatar
2 votes
1 answer
101 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
  • 21
2 votes
1 answer
69 views

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
2 votes
1 answer
81 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
  • 1,163
2 votes
1 answer
66 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
2 votes
0 answers
139 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
  • 21
2 votes
0 answers
22 views

Who can investors sell to under Rule 144?

Under the United States SEC's Rule 144, investors can resell securities after one year (or six months if the company is a reporting company) as long as the issuer allows it. But to who can they ...
Gregory Magarshak's user avatar
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
  • 1,163
1 vote
2 answers
300 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
2 answers
173 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
1 vote
2 answers
46 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
  • 1,163
1 vote
1 answer
408 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
2 answers
236 views

Is it legal to make a stock trade on non-public information that was obtained legally?

Let's say you hear two executives of a publicly-traded company discussing, in a public space, an upcoming earnings report, impending product release, bankruptcy, or some other material information ...
cph2117's user avatar
  • 123
1 vote
1 answer
51 views

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
1 vote
2 answers
73 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 [...
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
1 vote
2 answers
1k views

Does the SEC apply to overseas investments?

Would a US company issuing private stock outside of the USA have to comply with SEC regulations?
Anon's user avatar
  • 67
1 vote
1 answer
357 views

Avoiding the appearance of insider trading

Can one conceivably be accused of insider trading without being considered an insider at the company you work for? Is that classification by your company more just a way of categorizing employees and ...
maplemale's user avatar
  • 357
1 vote
1 answer
30 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
185 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
  • 548
1 vote
1 answer
175 views

Could an executive selling shares be considered a breach of fiduciary duty?

When major executives sell large numbers of shares, these sales are often very public. Generally, massive stock dumps are a sign that the executive feels the value of the company has peaked, and is ...
TheEnvironmentalist's user avatar
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
  • 51
1 vote
1 answer
57 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
  • 1,163
1 vote
1 answer
117 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
  • 1,125
1 vote
1 answer
89 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
1 vote
0 answers
17 views

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
  • 1,163
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
  • 1,163
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
1 vote
1 answer
83 views

Can a company take donations in lieu of investments and avoid SEC regulation?

Can a company issue "shares" that have no right to equity based on donations? This might sound like a weird question but the application is using the ethereum blockchain to create Tokens which would ...
Anon's user avatar
  • 67