This Act requires companies issuing securities for public purchase to issue financial and other significant information to investors, while also prohibiting fraud or misrepresentations of financial information. The issuance of information is accomplished through the registration of information about the securities with the SEC, which will review submitted information to ensure that disclosure requirements under this Act have been met. This Act is primarily concerned with the issuance of information related to the initial offering of securities only, rather than with ongoing updates to securities-related information (which is covered by the Securities Exchange Act of 1934). The information sent to the SEC provides essential details about (1) the issuing company’s properties and business, (2) securities available for sale, (3) information about the management team, and (4) audited financial statements. If the information provided by the issuing company can be proven by an investor to be incomplete or inaccurate, then investors may have the right to recover their invested funds from the company.
Securities Act of 1933