A law passed in 1933 mandating that a prospectus, a document with detailed information about the company and its finances, must be used in the sale of securities. This act also mandates full and fair disclosure throughout the sale.
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US: Act to ensure the availability of complete and reliable information about securities being sold to the public. The most important components of the Act are Section 5, which makes it illegal to offer or sell securities to the public unless they have first been registered with the Securities and Exchange Commission (SEC), and Section 11, which imposes civil liability for material misstatements in registration statements. Failure to comply with the Act’s technical or substantive requirements in connection with a public offering of a security can result in liability of the corporation and its directors and officers.
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Focuses on the initial offering and sale of securities by companies. The Act, among other things, requires registration of the securities and full, honest disclosure of all material information about the securities before the securities can be offered or sold. Violators may be subject to civil liability and criminal penalties.