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Article
Publication date: 1 April 2004

Robert N Sobol

A pooled income fund (PIF) is one of the methods created under the 1969 Tax Reform Act whereby a taxpayer may make a tax‐deductible remainder gift to a charitable…

Abstract

A pooled income fund (PIF) is one of the methods created under the 1969 Tax Reform Act whereby a taxpayer may make a tax‐deductible remainder gift to a charitable organization. The fund, established by a charitable organization to receive irrevocable gifts from at least two donors, pays current income to the individual beneficiaries for life, but at the termination of each income interest, the allocable principal must revert permanently to the charitable organization. In recent years, a number of PIFs have been offered to the public by charitable organizations through broker‐dealers or related entities. There are numerous securities‐law issues implicated by the sales of these PIFs, including: (i) whether broker‐dealers may solicit donations to such funds and receive compensation for their solicitations; (ii) the effect of the broker‐dealers’ solicitation and receipt of compensation have on securities registration for the PIF or units offered therein under the Securities Act of 1933, the Securities Exchange Act of 1934, or the Investment Company Act of 1940; (iii) whether staff and persons affiliated with the sponsoring charity, including parties assisting them in the marketing of such pooled income funds, also should be permitted to solicit donations; (iv) whether such charities or persons, or parties assisting them in the marketing of such pooled income funds, then should be required to register as broker‐dealers; (v) what securities licenses may be required of the aforementioned parties; and (vi) whether there are ways to design the manner in which third parties other than broker dealers are compensated to resolve any potential issues arising from answers to the previous questions. This article first sets forth the applicable law involved in the analysis and then attempts to answer each of the issues presented above.

Details

Journal of Investment Compliance, vol. 5 no. 2
Type: Research Article
ISSN: 1528-5812

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Article
Publication date: 1 June 1999

Rocco R. Vanasco

The Foreign Corrupt Practices Act (FCPA) of 1977 and its amendment – the Trade and Competitive Act of 1988 – are unique not only in the history of the accounting and…

Abstract

The Foreign Corrupt Practices Act (FCPA) of 1977 and its amendment – the Trade and Competitive Act of 1988 – are unique not only in the history of the accounting and auditing profession, but also in international law. The Acts raised awareness of the need for efficient and adequate internal control systems to prevent illegal acts such as the bribery of foreign officials, political parties and governments to secure or maintain contracts overseas. Its uniqueness is also due to the fact that the USA is the first country to pioneer such a legislation that impacted foreign trade, international law and codes of ethics. The research traces the history of the FCPA before and after its enactment, the role played by the various branches of the United States Government – Congress, Department of Justice, Securities Exchange commission (SEC), Central Intelligence Agency (CIA) and the Internal Revenue Service (IRS); the contributions made by professional associations such as the American Institute of Certified Public Accountants (AICFA), the Institute of Internal Auditors (IIA), the American Bar Association (ABA); and, finally, the role played by various international organizations such as the United Nations (UN), the Organization for Economic Cooperation and Development (OECD), the World Trade Organization (WTO) and the International Federation of Accountants (IFAC). A cultural, ethical and legalistic background will give a better understanding of the FCPA as wll as the rationale for its controversy.

Details

Managerial Auditing Journal, vol. 14 no. 4/5
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 1 March 2005

Rizvana Zumeeruddin

In June of 2004, the Securities and Exchange Commission (“the SEC”) voted to publish Proposed Regulation B (“Regulation B”), which will implement provisions of the…

Abstract

In June of 2004, the Securities and Exchange Commission (“the SEC”) voted to publish Proposed Regulation B (“Regulation B”), which will implement provisions of the Gramm‐Leach‐Blily Act of 1999 (“GLBA”) that identify activities which banks may engage in without registering as brokers or dealers under The Securities and Exchange Act of 1934 (“The Exchange Act”); effectively governing the manner in which banks, savings associations and savings banks effect securities transactions. By enacting the GLBA, Congress repealed most of the remaining vestiges of the ownership restrictions that prevented banks, securities and insurance firms from combining, thereby allowing them to adopt the universal banking model through the creation of financial conglomerates known as “financial holding companies.” Proposed Regulation B (“Regulation B”) supercedes the SEC's final interim rules issued in May of 2001 with respect to banking and brokering activities. In general, banks and their regulators have found Regulation B to be far more acceptable than the final interim rules of 2001. On a practical level, Regulation B results in considerably more work for banks. This article will examine the existing law as it pertains to banks engaging in broker‐dealer activities and highlight the key provisions of Regulation B.

Details

Humanomics, vol. 21 no. 3
Type: Research Article
ISSN: 0828-8666

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Article
Publication date: 8 October 2019

Arthur L. Zwickel, Keith D. Pisani and Alicia M. Harrison

The purpose of this paper is to provide investment advisers, broker dealers, individual investors and other securities firms with a current and detailed summary of the…

Abstract

Purpose

The purpose of this paper is to provide investment advisers, broker dealers, individual investors and other securities firms with a current and detailed summary of the reporting regime under Sections 13 and 16 of the Securities Exchange Act of 1934 (the “Exchange Act”) and guidance on how to comply with the disclosure requirements of the U.S. Securities and Exchange Commission (the “SEC”) on Schedule 13D, Schedule 13G, Form 13F, Form 13H and Forms 3, 4 and 5.

Design/methodology/approach

The approach of this paper discusses the transactions or beneficial ownership interests in securities that trigger a reporting requirement under Section 13 and/or Section 16 of the Exchange Act, identifies the person or persons that have the obligation to file reports with the SEC, details the information required to be disclosed in the publicly available reports, and explains certain trading restrictions imposed on reporting persons as well as the potential adverse consequences of filing late or failing to make the requisite disclosures to the SEC.

Findings

The SEC continues to provide updated guidance on the disclosure requirements under Sections 13 and 16 of the Exchange Act, which individual investors and securities firms – largely insiders – must take into account when filing any new or amended reports on Schedule 13D, Schedule 13G, Form 13F, Form 13H and Forms 3, 4 and 5.

Originality/value

This article provides expert analysis and guidance from experienced securities lawyers.

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Article
Publication date: 1 May 1997

Anghel N. Rugina

The equation of unified knowledge says that S = f (A,P) which means that the practical solution to a given problem is a function of the existing, empirical, actual…

Abstract

The equation of unified knowledge says that S = f (A,P) which means that the practical solution to a given problem is a function of the existing, empirical, actual realities and the future, potential, best possible conditions of general stable equilibrium which both pure and practical reason, exhaustive in the Kantian sense, show as being within the realm of potential realities beyond any doubt. The first classical revolution in economic thinking, included in factor “P” of the equation, conceived the economic and financial problems in terms of a model of ideal conditions of stable equilibrium but neglected the full consideration of the existing, actual conditions. That is the main reason why, in the end, it failed. The second modern revolution, included in factor “A” of the equation, conceived the economic and financial problems in terms of the existing, actual conditions, usually in disequilibrium or unstable equilibrium (in case of stagnation) and neglected the sense of right direction expressed in factor “P” or the realization of general, stable equilibrium. That is the main reason why the modern revolution failed in the past and is failing in front of our eyes in the present. The equation of unified knowledge, perceived as a sui generis synthesis between classical and modern thinking has been applied rigorously and systematically in writing the enclosed American‐British economic, monetary, financial and social stabilization plans. In the final analysis, a new economic philosophy, based on a synthesis between classical and modern thinking, called here the new economics of unified knowledge, is applied to solve the malaise of the twentieth century which resulted from a confusion between thinking in terms of stable equilibrium on the one hand and disequilibrium or unstable equilibrium on the other.

Details

International Journal of Social Economics, vol. 24 no. 5
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 1 February 1998

Philip Summe and Kimberly A. McCoy

Throughout the history of commerce, individuals have searched for informational advantages that will lead to their enrichment. In a time of global capital markets, 24…

Abstract

Throughout the history of commerce, individuals have searched for informational advantages that will lead to their enrichment. In a time of global capital markets, 24 hours a day trading opportunities, and a professional services corps of market experts, informational advantages are pursued by virtually every market participant. This paper examines one of the most vilified informational advantages in modern capital markets: insider trading. In the USA during the 1980s, insider trading scandals occupied the front pages of not only the trade papers, but also quotidian tabloids. Assailed for its unfairness and characterised by some as thievery, insider trading incidents increased calls for stricter regulation of the marketplace and its participants. In the aftermath of the spectacular insider trading litigation in the USA in the late 1980s, many foreign states began to re‐evaluate the effectiveness of their own regulatory structures. In large part, this reassessment was not the produce of domestic demand, but constituted a response to American agitation for increased regulation of insider trading.

Details

Journal of Financial Crime, vol. 5 no. 4
Type: Research Article
ISSN: 1359-0790

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Article
Publication date: 1 February 1998

Rocco R. Vanasco

This paper examines the role of professional associations, governmental agencies, and international accounting and auditing bodies in promulgating standards to deter and…

Abstract

This paper examines the role of professional associations, governmental agencies, and international accounting and auditing bodies in promulgating standards to deter and detect fraud, domestically and abroad. Specifically, it focuses on the role played by the US Securities and Exchange Commission (SEC), the American Institute of Certified Public Accountants (AICPA), the Institute of Internal Auditors (IIA), the Institute of Management Accountants (IMA), the Association of Certified Fraud Examiners (ACFE), the US Government Accounting Office (GAO), and other national and foreign professional associations, in promulgating auditing standards and procedures to prevent fraud in financial statements and other white‐collar crimes. It also examines several fraud cases and the impact of management and employee fraud on the various business sectors such as insurance, banking, health care, and manufacturing, as well as the role of management, the boards of directors, the audit committees, auditors, and fraud examiners and their liability in the fraud prevention and investigation.

Details

Managerial Auditing Journal, vol. 13 no. 1
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 3 June 2014

Henry Kahn, Robert Welp and Richard Parrino

To review the M&A Brokers “no-action” letter issued in February 2014 by the staff of the USA Securities and Exchange Commission that clarifies the circumstances in which…

Abstract

Purpose

To review the M&A Brokers “no-action” letter issued in February 2014 by the staff of the USA Securities and Exchange Commission that clarifies the circumstances in which intermediaries (M&A brokers) may receive transaction-based compensation for services provided in connection with sales of private companies without having to register and be regulated by the SEC as broker-dealers under the USA Securities Exchange Act of 1934.

Design/methodology/approach

Examines the new SEC staff interpretative guidance on activities of M&A brokers in light of USA federal securities laws and previous staff no-action letters that address the application of broker-dealer registration requirements to such intermediaries when they render services in connection with purchases and sales of privately-held companies. Summarizes the manner in which the SEC staff’s new position expands the types of private M&A transactions on which intermediaries may advise and broadens the scope of services they may provide without subjecting themselves to Exchange Act registration.

Findings

The M&A Brokers letter dispels much of the uncertainty existing under earlier SEC staff no-action letters about the scope of permissible activities in which unregistered intermediaries may engage in private M&A transactions. By broadening the scope of those activities under the federal statutory regime governing broker-dealers, the new staff guidance should facilitate the expansion of services provided by M&A brokers without registration and permit greater flexibility for M&A brokers and their clients to structure compensation arrangements. The paper cautions that, absent reform of more restrictive regulation under the securities laws of some states, the prospects for expanded involvement by unregistered intermediaries in private M&A transactions may not be fully realized.

Originality/value

Expert guidance from experienced securities lawyers.

Details

Journal of Investment Compliance, vol. 15 no. 2
Type: Research Article
ISSN: 1528-5812

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Article
Publication date: 1 October 2005

Michael R. Rosella

To explain reporting requirements under Section 13 of the Securities Exchange Act of 1934 (the “Exchange Act”) that must be followed by advisers and brokers who exercise…

Abstract

Purpose

To explain reporting requirements under Section 13 of the Securities Exchange Act of 1934 (the “Exchange Act”) that must be followed by advisers and brokers who exercise investment discretion over accounts that hold exchange‐traded equity securities, and to describe reporting requirements under Section 16 of the Exchange Act on certain persons considered “insiders” of a company that has a class of equity securities registered under Section 12 of the Exchange Act.

Design/methodology/approach

Describes the required reporting of significant acquisition and ownership positions on Schedules 13G and 13D, including the obligations of exempt investors, passive investors, and firms and their control persons; describes the required reporting of equity positions in managed portfolios of more than $100 million on Form 13F; and describes the reporting obligations of “insiders” (directors, officers, and principal stockholders) under Section 16 of the Exchange Act, including the content of Form 3 – Initial Statement of Beneficial Ownership of Securities, Form 4 – Statement of Changes of Beneficial Ownership of Securities, and Form 5 – Annual Statement of Beneficial Ownership of Securities.

Findings

Firms and their control persons managing discretionary accounts that hold more than 5 percent of an SEC‐reporting company's equity securities or manage discretionary accounts with market values of $100 million or more; institutional investment managers who exercise investment discretion over accounts with a fair market value of at least $100 million, and corporate insiders have significant reporting obligations under the Exchange Act.

Originality/value

Provides a clear, detailed reference concerning Section 13 and Section 16 Reporting Requirements.

Details

Journal of Investment Compliance, vol. 6 no. 4
Type: Research Article
ISSN: 1528-5812

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Article
Publication date: 14 June 2011

James Weidner, Christopher Lane and Sean Peterson

The purpose of this paper is to assess the effects of several lower court decisions, the enactment of the Dodd‐Frank Wall Street Reform & Consumer Protection Act of July…

Abstract

Purpose

The purpose of this paper is to assess the effects of several lower court decisions, the enactment of the Dodd‐Frank Wall Street Reform & Consumer Protection Act of July 2010, and subsequent Securities and Exchange Commission statements on the extraterritorial application of Section 10 (b) of the Securities and Exchange Act of 1934, following the June 2010 US Supreme Court decision in Morrison v. National Australia Bank Ltd.

Design/methodology/approach

The paper discusses the Morrison decision, three lower court decisions following Morrison, Section 929P(b) of the Dodd‐Frank Act, an October 2011 SEC release supporting the Second Circuit's long‐standing “conduct and effects” test, and other expert commentary, and draws interim conclusions, subject to further legal, regulatory and legislative proceedings, concerning the full impact of Morrison on US securities law.

Findings

The full impact of Morrison on US securities law has yet to be seen and will be subject to regulations, legislation and court cases. The interim effect of the decisions issued by lower courts following Morrison is to provide foreign defendants with substantial immunity from private suit under US securities law over securities transactions that occur outside the USA.

Originality/value

This paper provides a useful summary and practical guidance from experienced securities lawyers.

Details

Journal of Investment Compliance, vol. 12 no. 2
Type: Research Article
ISSN: 1528-5812

Keywords

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