Imposes liability on a director or officer who personally purchases and sells, or sells and purchases, the company’s securities within a six month period. The statute, which is intended to prevent the misuse of inside information by company insiders, requires the insider to disgorge to the company any profit realized from the short swing transactions, regardless of whether the insider in fact knew of any material, nonpublic information at the time of the transactions.
Insurance Encyclopedia
Securities Act of 1933 Sections 11 and 12
Provisions of the act that prohibit persons from making false or misleading statements in either a registration statement filed with the SEC or in a prospectus used in the offer or sale of securities. These statutes are the general bases for securities class action lawsuits against directors and officers in connection with a company’s offer or sale of its own securities.
Securities Act of 1934 Act
The Securities Exchange Act of 1934, which focuses on the secondary trading of securities after the securities have been sold by the issuing company. Among other things, the statute creates the Securities and Exchange Commission (SEC) and establishes a system of minimum standards governing open market transactions in securities. Violators may be subject to civil liability and criminal penalties.
Securities deposited with others coverage form (Criminal)
A commercial crime form that covers securities deposited with an institution, such as a bank or trust company, or a trusted individual, such as a stockbroker. This form covers loss due to disappearance, destruction, or theft.
Securities Exchange Act of 1934
The Act and its accompanying rules were enacted to protect investors in connection with the trading of securities already issued and outstanding. The most important components of the Act are Section 10(b) and Securities and Exchange Commission (SEC) Rule 10b-5, which prohibits manipulative or deceptive acts in connection with the purchase or sale of a security. Corporate directors and officers are frequently the targets of lawsuits brought under these antifraud provisions.
Securities Exchange of 1934
A law passed in 1934 stating that any company or agent who wishes to sell securities must register with the federal government to do so.
Securitisation
A means by which selfliquidating financial assets such as loans and mortgages are packaged by a business as bonds and sold through a special purpose vehicle to capital market investors. The business continues to service the securitised assets although the credit risk has been transferred to investors whose concern is the creditworthiness of the assets not the business which granted the loans. See SECURITISATION OF INSURANCE RISK.
Securitisation of insurance risk
Transfer of insured risks from the insurance market to the capital market through a special purpose vehicle. The SPV sells bonds on the proviso that it can default on interest and/or capital repayments if the insured risk, e.g. a hurricane, occurs. The retained amounts fund the losses of the (re)insurer. Securitisation has provided alternative sources of capital when reinsurance capacity has been in short supply. See CATASTROPHE BONDS; INSURITISATION.
Securitization of insurance risk
The transfer or sale, in the form of an investment security, of the underwriting and timing risks associated with one or more insurance policies. It is similar in concept to asset securitization that involves turning illiquid assets into liquid instruments that can be traded freely on the open market (e.g., mortgage backed securities).
Security officer
Under the Health Insurance Portability and Accountability Act (HIPAA), individual who protects the computer and networking systems within the medical practice or hospital facility and implements protocols such as password assignment, backup procedures, firewalls, virus protection, and contingency planning for emergencies.