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1. Answer 2 review questions and 1 business discussion questions. Each answer should be at least one paragraph. Outside sources are required to back up your answer. For example, when discussing whether a company can use other’s trade secret without permission? The expected answer should reference relevant law to further support the discussion. For instance, Uniform Trade Secret Act with 1985 Amendments (UTSA). Plz also list the links of the website where you find the sources on the reference list.2. Reply to two peer’s post with critical but polite comments.3. Plz do not use answers on chegg, coursehero etc
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Review Question:
Additional Civil Liability
1. What is the purpose of Section 18 of the Securities Exchange Act of 1934?
Business Discussion:
Two former roommates from college contact you about an opportunity to make big
money. Their idea is to start a business to market a new video game system (the computer
science major developed the software, the engineer created the hardware). They estimate it will take $5 million to
$10 million to begin production, and they want to raise money by selling shares in the company to investors. They
think their product is superior, and they are aware of the time factor. They want to get started as soon as possible.
Your field of expertise is securities marketing.
Question:
1) Can the three of you just begin advertising for investors?
2) What steps must be followed to comply with the law?
3) How much time is needed before potential investors can be approached legally?
Other peer posts: Zhenhui Zhang
Can the three of you just begin advertising for investors?
Yes, however, you need to incorporate, so that you and your friends may sell shares of stock. Also, you
need to submit a registration statement to the US security and exchange commission (SEC). During the
process of prefilling, you and your friend is legal to engage negotiations and agreements with
underwriters, but it’s illegal to offer, sell or accept offers to buy securities.
What steps must be followed to comply with the law?
The first step is register at SEC, to do that, you need to have a the document to SEC and after they
proceed it, you will have a registration statement. The second step is waiting period, typically lasts 20
days unless an amendment is filed. During waiting period, buying and selling securities is legal as long as
prospectus is given to every potential investors.
How much time is needed before potential investors can be approached legally?
About 20 days start with filing the registration statement to start finding investors.
References
Pagnattaro, Marisa Anne, et al. The Legal and Regulatory Environment of Business. McGraw-Hill
Education, 2019.
https://www.investopedia.com/terms/s/securitiesact1933.asp
Other peer posts: Bernardo Prieto Sanchez
Can the three of you just begin advertising for investors? What steps must be followed to comply with the law? How
much time is needed before potential investors can be approached legally?
The law says that the first step they should take is to incorporate so they can be a company and have the option of
selling shares of stocks. They also need to register to the SEC. Its important to mention that is legal to do consider
offers of sell or buy securities, but, they may create an advertisement to identify the security and give to the
investor a face of what the company is going to look like.
They need to do the registration statement into the SEC and they the waiting period that could take 20 days.
Usually it may take about 20 days from the date of filling the documents of the registration in order to find the
investors for the project.

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