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Compare And Contrast The Securities Exchange Act Of 1934 And Sec Rule 10b-5

749 Words3 Pages

Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 prohibit the use of manipulative and deceptive practices in connection with the purchase or sale of any security. This includes the use of material non-public information by those in a position of trust or authority, such as a financial officer of a company, to gain an unfair advantage or manipulate the stock price. In this case, Emerson was not acting in his capacity as a financial officer of Reliant when he discussed the takeover with his uncle and did not use any confidential or privileged information to gain an unfair advantage or manipulate the stock price.
Therefore, Emerson did not violate Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5. The …show more content…

By prohibiting the use of material non-public information by those in a position of trust or authority, these laws are designed to ensure that investors have access to the same information and can make informed decisions when investing in the stock market.
The Sarbanes-Oxley Act was enacted in 2002 in response to a number of corporate accounting scandals that had rocked the U.S. economy. It is intended to protect investors from fraudulent activities by ensuring that publicly traded companies provide accurate and reliable financial information. Under the Sarbanes-Oxley Act, the CEO and CFO of a publicly traded company must certify the accuracy of the financial statements filed with the SEC. This certification must be done in writing and must include a statement that the financial statements fairly present the financial condition of the …show more content…

By requiring the CEO and CFO of publicly traded companies to certify the accuracy of financial statements filed with the SEC, the Act helps to ensure that investors have access to reliable financial information and can make informed decisions when investing in the stock market.
The Sarbanes-Oxley Act also requires public companies to annually report on the effectiveness of their internal controls and procedures. This is done by performing an assessment to determine whether the internal controls and procedures are operating effectively to prevent any fraudulent activities from occurring. If the assessment finds that the internal controls are not operating effectively, the company must take corrective action to address the issues and make sure that their financial statements are accurate and reliable.
The Sarbanes-Oxley Act is an important piece of legislation that helps to protect investors from fraudulent activities in the securities markets. By requiring public companies to annually report on the effectiveness of their internal controls and procedures, the Act helps to ensure that investors have access to reliable financial information and can make informed decisions when investing in the stock

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