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Securities Law Research Guide: GENERAL

Statutes, regulations, treatises, and other sources of securities law

GLOSSARY OF SECURITIES TERMS

Glossary of Selected Terms 

  Bear Market: A market for investments in which price trends are generally downward.

  "Blue Sky" Statutes: State securities laws. The name is derived from a state court decision that described a particular securities offering as having  "no more substance than the blue sky above."

   Bond: A long-term debt instrument issued by a corporation or government entity in return for a loan; the issuer is obligated to pay a specified rate of interest to the bondholder for a specified time period, then to repay the loan when the bond period expires.

   Bull Market: A market for investments in which price trends are generally upward.

   Churning: A form of price manipulation in securities markets; excessive trading in a customer's account intended only to increase a broker/dealer's profits, in disregard of the customer's best interests.

   Credit Default Swap: A widely used type of derivative in which one party (often the owner of an underlying credit asset) makes periodic payments to a counterparty in exchange for the counterparty's commitment to pay a set amount in the event of default or other failure of the underlying credit asset.

   Derivative: A financial contract, the value of which is based on or "derived" from one or more underlying assets or indexes of asset values. The most common types of derivatives are futures contracts, forward contracts, options (puts and calls), and swaps. Derivatives have generally been used as instruments to hedge risk, but they are also used for speculation. Rena S. Miller, Introduction to Financial Services: Derivatives (Congressional Research Service, Feb. 3, 2015).

   EDGAR: The SEC's database of federally-required disclosures by publicly traded corporations in order to provide investors and researchers detailed company financial and operations information. EDGAR includes corporate registration statements, prospectuses and periodic reports filed on Forms 10-K, 10-Q, and 8-K.

   FuturesContracts to buy or sell an agreed amount of some product (stocks, bonds, or commodities) at a specified price on a specific date in the future.

   Margin:  A percentage of the full price for a security purchased through a credit (or margin) account with a broker/dealer. The security is pledged as collateral for the balance of the purchase price owed to the broker/dealer. The Federal Reserve Board regulates permissible margins on purchases of securities.

   No-Action Letters (Securities & Exchange Commission):  Businesses request advisory letters from the SEC to clarify whether a particular product, service, or action would constitute a violation of federal securities laws. The SEC may then issue a "no-action" letter which analyzes the particular fact situation and the applicable laws and rules. No-action letters clarify the legality of certain activities and where appropriate, indicate that SEC staff would not recommend an enforcement action against the business.

   Offering: A new issue of shares offered for sale to the public, also known as a public offering.

   Over-the-Counter Market: The market for securities that are not listed on an Exchange.

   Pass-Through Security: A debt obligation which is purchased by an intermediary and then packaged or "pooled" into a new financial product, backed by the underlying security, shares in which are sold to investors.

   Price to Earnings Ratio: The ratio of the price of a common stock to its earnings per share, used to measure its profitability.

   Prospectus: The disclosure document for a securities offering registered with the SEC, issued on the effective date when the offering is released.

   Security:  Generic term for debts, ownership interests, or related rights evidenced by bonds, stocks, and similar instruments which provide an interest in or a claim against an enterprise and its resources.

   Self-Regulatory Organization (SRO): A non-governmental organization that has the power to create and enforce securities industry regulations and standards of ethics. The stock exchanges and  the Financial Industry Regulatory Authority (FINRA) are examples of SROs. The SEC delegates much of its authority to oversee the securities markets to SROs, but retains power to approve all SRO rules.

SECURITIES LAW TREATISES AT PACE LAW LIBRARY

Securities Regulation, Louis Loss (6th ed. 2019) (KF1439 .L6) (two-vol. set).

Treatise on the Law of Securities Regulation, Thomas Lee Hazen (7th ed. 2016) (KF1439 .H39) (multi-vol. set); available on Westlaw under the title Law of Securities Regulation.

Soderquist on Corporate Law and Practice, Linda O. Smiddy (4th ed. 2012) (KF1414 .S 622) (looseleaf); part of Practising Law Institute's Corporate and Securities Law Library).

Bromberg and Lowenfels on Securities Fraud, Alan Bromberg & Lewis D. Lowenfels (2d ed. 1994) (KF1070 .B7) (six-vol.looseleaf); available on Westlaw. in-depth analysis with extensive bibliography.

Broker-Dealer Regulation, Clifford E. Kirsch (2d ed. 2011) (KF1071 .B76) (looseleaf); part of Practicing Law Institute’s Corporate and Securities Law Library.

Investment Adviser Regulation: A Step-by-Step Guide to Compliance and the Law, Clifford E. Kirsch (3d ed. 2011) (KF1072 .K572); also in PLI's Corporate and Securities Law Library.

Some titles are no longer updated in print. For additional titles, click here.

STUDY AIDS & HORNBOOKS

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INVESTOR RIGHTS CLINIC, ELISABETH HAUB SCHOOL OF LAW

The Investor Rights Clinic at Elisabeth Haub School of Law provides a vital service to the public in helping to remedy fraud and misfeasance against small investors and hold investment professionals accountable. Students working in the clinic receive excellent practical  training and experience in securities law and arbitration practice:

Pace Investor Rights Clinic Podcast:  Modest Means New Yorkers Have Pro Bono Advocate in Wall Street Disputes (December 21, 2012).

Pace Investor Rights Clinic brochure.

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