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:
“Natural selection, the blind, unconscious, automatic process which Darwin discovered, and which we now know is the explanation for the existence and apparently purposeful form of all life, has no purpose in mind. It has no mind and no mind’s eye. It does not plan for the future. It has no vision, no foresight, no sight at all. If it can be said to play the role of the watchmaker in nature, it is the blind watchmaker.”
—Richard Dawkins (b. 1941)
“To me the sole hope of human salvation lies in teaching Man to regard himself as an experiment in the realization of God, to regard his hands as God’s hand, his brain as God’s brain, his purpose as God’s purpose. He must regard God as a helpless Longing, which longed him into existence by its desperate need for an executive organ.”
—George Bernard Shaw (1856–1950)
“Nowadays, if New York has a heart, it might be the Garden. Almost everyone goes there, for one purpose or another. There are dog shows, and Sonja Henie and mass meetings.”
—In New York City, U.S. public relief program (1935-1943)