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Investor Protection How the SEC Can Help Jack McCreery, staff attorney Office of Investor Education and Assistance. The Usual Disclaimer.

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Investor Protection

How the SEC Can Help

Jack McCreery, staff attorney

Office of Investor Education and Assistance


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The Usual Disclaimer

The Securities and Exchange Commission, as a matter of policy, disclaims responsibility for any private publication or statement by any of its employees. The views expressed in this presentation are those of Mr. McCreery and do not necessarily reflect the views of the SEC, its Commissioners, or other members of the SEC’s staff.


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Who We Are and What We Do

  • Created in 1934 following the Stock Market Crash of 1929

  • Administer the federal securities laws

  • Oversee brokerage firms and other investment service providers

  • Review filings by most public companies


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How the SEC Protects Investors

  • Assure that the securities markets are open, fair, and honest

  • Require companies to disclose information

  • Catch wrongdoers and impose punishment ranging from fines to kicking them out of the industry


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How the SEC Helps Investors Help Themselves

  • Show investors how to research investments and the people who sell them

  • Make information about publicly traded companies available to the public

  • Answer questions and handle complaints

  • Provide free educational materials


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SEC Web ResourcesWhere can I find…

Special collections of information, such as updates on Enron, WorldCom

Financial statement filings from EDGAR

Fast answers library and our glossary

Calculators

Hot stock recommendations!


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Who Must File Reports

A company must file reports if:

It has 500 or more investors and$10 million or more in assets, or

It lists its securities on:

American Stock Exchange

Boston Stock Exchange

Chicago Stock Exchange

Cincinnati Stock Exchange

International Securities Exchange

Nasdaq Stock Market

New York Stock Exchange

Pacific Exchange

Philadelphia Stock Exchange, or

3. Its securities are quoted on the OTCBB


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Tips for Searching EDGAR

Ticker symbol search for 9400 largest    publicly traded companies

To a find a company named for a person (e.g., John Doe Widget Maker, Inc.), search last name first: Doe John

For most searches, “Company Search” will do For complex queries, use the “Archives” search


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Registration Statements (S-1, SB-1, F-1)

Periodic Reports (Form 10-K for annual info, Form 10-Q for quarterly results)

Current Reports (Form 8-K)

Proxy Statements (known in EDGAR as Form DEF 14A)

Sources of Company Info:


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Item 9: Change in accountants

Item 10: Directors & executive officers

Item 11: Executive comp

Item 12: Ownership (insiders)

Item 13: Relationships & related transactions

Item 14: Accounting Fees & services

Item 15: Exhibits

Signatures & Certifications

What You’ll Find in a 10-K:

  • Item 1: Business

  • Item 2: Properties

  • Item 3: Legal proceedings

  • Item 4: Submission of matters to a vote

  • Item 5: Market for securities

  • Item 6: Selected financial data

  • Item 7: MD&A

  • Item 7A: Market risk

  • Item 8: Financial statements


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What You’ll Find in an 8-K:

Section 1--Registrant's Business and Operations - Entry or termination of a material agreement

Section 2--Financial Information Acquisition or Disposition of Assets, Creation of a Direct Financial Obligation, Material Impairments

Section 3--Securities and Trading Markets Notice of Delisting, Material Modification to Rights of Security Holders 

Section 4--Matters Related to Accountants and Financial Statements Change of Accountants, Non-Reliance on Previously Issued Financial Statements 

Section 5--Corporate Governance and Management Changes in Control, Departure of Directors or Principal Officers

Section 6--Reserved (for future use)

Section 7--Regulation FD Disclosure

Section 8--Other Events Other Events (material, but not specified in 8-K instructions)

Section 9--Financial Statements and Exhibits Financial Statements and Exhibits

Companies have four days to file a Form 8-K for the events specified in the items in Sections 1-5 and 9 above. However, if the issuer is furnishing a Form 8-K solely to satisfy its obligations under Regulation FD, then the due date might be earlier.


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Form 3: Insiders must file no later than the effective date of the registration statement, or, if the issuer is already registered, within ten days of becoming an officer, director, or beneficial owner.

Form 4: Changes in ownership must be reported within two business days. Limited categories of transactions are not subject to the two-day reporting requirement.

Form 5: Insiders use this form to report any transactions that should have been reported earlier on a Form 4 or were eligible for deferred reporting.

Stock Ownership Forms


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Helpful Materials at of the registration statement, or, if the issuer is already registered, within ten days of becoming an officer, director, or beneficial owner.www.sec.gov

  • On-line publications

  • Calculators

  • Check out Brokers & Advisers

  • Complaint Center

  • “Fast Answers” to securities questions


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Ways to Diversify of the registration statement, or, if the issuer is already registered, within ten days of becoming an officer, director, or beneficial owner.

  • Use a mix of cash, bonds, and stocks in your portfolio

  • Investing in mutual funds can provide diversification by company size, by industry sector, and sometimes by both

  • Be sure you know your time horizons and risk tolerance before investing


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Watch Out for Costs of the registration statement, or, if the issuer is already registered, within ten days of becoming an officer, director, or beneficial owner.

  • Ask your broker about commissions

  • Remember, your broker gets a commission whether you buy or sell, and whether you make money or lose money

  • Be aware of account fees, margin fees, wrap fees, minimum balances, etc.

  • Use the SEC’s online Mutual Fund Cost Calculator


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Research Your Broker! of the registration statement, or, if the issuer is already registered, within ten days of becoming an officer, director, or beneficial owner.

  • Find out your broker’s background

  • Check out your broker with the NASD online at www.nasdbrokercheck.com Call 1-800-289-9999

  • Check with the state securities regulators online at www.nasaa.org or give your state’s regulator a call

  • You owe it to yourself to know with whom you are doing business


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Research Your Adviser! of the registration statement, or, if the issuer is already registered, within ten days of becoming an officer, director, or beneficial owner.

  • Investment advisers who manage $25 million or more in client assets generally must register with the SEC

  • Check the SEC’s Investment Adviser Public Disclosure website under “Investment Management” on our website

  • Advisers with less than $25 million must register with the state securities agency where the principal place of business is


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Research Any Investment! of the registration statement, or, if the issuer is already registered, within ten days of becoming an officer, director, or beneficial owner.

  • Read everything you can about a company

  • Check out company filings through the SEC’s website (www.sec.gov) & “EDGAR”

  • If you don’t understand an investment product, don’t buy it

  • If it sounds too good to be true, it probably is….


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Psst-want a hot stock tip? of the registration statement, or, if the issuer is already registered, within ten days of becoming an officer, director, or beneficial owner.

  • www.mcwhortle.com (a very hot IPO opportunity)

  • www.growthventure.com/parsons (a fabulous prime bank site)

  • www.growthventure.com/oldglory (a glorious mutual fund)

  • www.growthventure.com/grdi (a hedge fund you shouldn’t miss)


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SEC Contact Information of the registration statement, or, if the issuer is already registered, within ten days of becoming an officer, director, or beneficial owner.

  • Website: www.sec.gov

  • Phone: 1-800-732-0330

  • Email: help@sec.gov

  • Mail: U.S. Securities and Exchange Commission 100 F Street, NE Washington, DC 20549-0213