The Legal Environment of Business: Text and Cases
9th Edition
ISBN: 9781305764460
Author: Frank B Cross/ Roger LeRoy Miller
Publisher: CENGAGE C
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Question
Chapter 28, Problem 1RE
Summary Introduction
Case summary: Person DE was serving as the chief financial officer for a company, REC. The company was a distributor of serving electricity in portions of North Dakota. The company REC was taking over a company DGI that was distributing natural gas within North Dakota. DE went on a trip to fishing with his uncle EW. During the trip, DE told his uncle that he has been investing a lot of extra time in company REC as it was taking over the natural gas distributing company, DGI. EW after returning from the trip purchased the stock of $20,000 in company REC. The value of stock rose by 72 percent, which resulted in a profit of $14,400 at the time when EW sold his stock of REC.
To find:The requirement for registration of DG Securities with SEC.
Expert Solution & Answer
Explanation of Solution
The company is required to register the securities with the SEC if the security does not qualify for the exemption mentioned in the Securities Act. Company REC is taking over the company DGI that will result in the transfer of securities of DGI to REC. DGI is not issuing any new security for raising of funds. There is no offer of securities made to the public. Henceforth, the company DGI is not required to register the securities with SEC as no new securities are issued.
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Chapter 28 Solutions
The Legal Environment of Business: Text and Cases
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