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:
“I think the worst thing this nation could do for humanity would be to leave any uncertainty as to our will, our purpose and our capacity to carry out our purpose.”
—Hubert H. Humphrey (1911–1978)
“War is in truth a disease in which the juices that serve health and maintenance are used for the sole purpose of nourishing something foreign, something at odds with nature.”
—Johann Wolfgang Von Goethe (1749–1832)
“Our purpose in founding the city was not to make any one class in it surpassingly happy, but to make the city as a whole as happy as possible.”
—Socrates (469–399 B.C.)