Purpose
The primary purpose of the '33 Act is to ensure that buyers of securities receive complete and accurate information before they invest. Unlike state blue sky law, which imposes merit reviews, the '33 Act embraces a disclosure philosophy, meaning that in theory, it is not illegal to sell a bad investment, as long as all the facts are accurately disclosed. A company that is required to register under the '33 act must create a registration statement, which includes a prospectus, with copious information about the security, the company, the business, including audited financial statements. The company, the underwriter and other individuals signing the registration statement are strictly liable for any inaccurate statements in the document. This extremely high level of liability exposure drives an enormous effort, known as "due diligence," to ensure that the document is complete and accurate. The law is intended to in this way help bolster and maintain investor confidence in order to support the market.
Read more about this topic: Securities Act Of 1933
Famous quotes containing the word purpose:
“Certain books seem to have been written not for the purpose that we learn something from them but that we know that the author was a knowledgeable person.”
—Johann Wolfgang Von Goethe (1749–1832)
“And the purpose of the many stops and starts will be made clear:
Backing into the old affair of not wanting to grow
Into the night, which becomes a house, a parting of the ways
Taking us far into sleep. A dumb love.”
—John Ashbery (b. 1927)
“During the cattle drives, Texas cowboy music came into national significance. Its practical purpose is well known—it was used primarily to keep the herds quiet at night, for often a ballad sung loudly and continuously enough might prevent a stampede. However, the cowboy also sang because he liked to sing.... In this music of the range and trail is “the grayness of the prairies, the mournful minor note of a Texas norther, and a rhythm that fits the gait of the cowboy’s pony.””
—Administration in the State of Texa, U.S. public relief program (1935-1943)