WESTERN STATE UNIVERSITY
COLLEGE OF LAW
Securities Regulation Syllabus §536A
Professor Cheryl R. Lee
Fall 2007
Mon 6:30-9:45
Office Hours:
By appointment only
Please email crlee@wsulaw.edu
Required Texts:
Securities Regulation: Cases and Analysis, Choi & Pritchard
Foundation Press and Securities Regulation Statutory Supplement
Choi & Pritchard 2007 Edition.
The Wall Street Journal (We will sign up as a group in class)
Recommended Text: The Law of Securities Regulation, Hazen 5th Edition
Please bring the required texts to all classes. Study the statutes in the statute book as
they relate to the casebook materials for each class.
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Policies Regarding Student Work
Class Attendance: You must attend class, and the professor grants no waivers or
dispensations.
Discreet late-comers are always welcome and, at the professor’s
discretion, you may receive credit for attendance on a day you are late, if you so
request at the end of that class.
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Class Preparedness: You must be prepared for every class. The professor does not accept
notes or excuses from participation prior to class. Any student who is unprepared will
count as an absence. Any student who misses more than four classes will be
academically dismissed from the course.
Class Participation: You are expected to participate in class discussions whenever you are
invited to do so.
An occasion of unpreparedness does not exempt you from
participation on that occasion.
Goals
The goals outlined in this syllabus are the minimum of the skills and information that a
student should acquire in Securities Regulation. Note my emphasis on skills, as opposed to
information. Much of the focus of the course is to encourage you to be able to process
information by applying your talents of reason and imagination to a body of law in order to
answer questions that may be asked by your client, your partner, your judge, or your bar
examiner. As a lawyer, you will be expected to predict decisions of the courts that the courts
will not have made, and your ability to do so will depend on your skills as well as on your
knowledge.
Fundamental Goals
Fundamental Goals represent the essential tasks and knowledge necessary to achieve
the minimal understanding of the law of the United States, both to practice law in general and
to counsel a client in any matter that may – ultimately – be governed by the rules of
Securities Regulation. This course is a broad overview of securities regulatory law. By course
end you should be able to identify a security and determine when a security must be
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registered with the Securities and Exchange Commission. These goals are essential to
understanding and practicing the law.
Client Representative Goals
Client representative goals represent knowledge of discrete areas of the law, at the
time of the lecture, governing specific questions for which the answers are governed by
significant rules of securities regulatory law adopted by the federal government. You must be
equipped to determine when a security must be registered with the SEC, understand the
complexity of the registration process, the enforcement agencies and procedures, and the
accompanying registration process. Understanding materiality, insider trading, and fraud are
necessary client representative goals. These goals represent the minimum content of this
broad practice area and will be examined on most bar exams.
Predictive Goals
Predictive goals represent skills and knowledge that are used in analyzing historical
precedents and contemporary questions, in order to estimate more accurately the likely future
decisions of the courts. These goals represent the minimum understanding of a practitioner in
this field of law as a specialty.
Schedule of Readings & Written Assignments
Read all of the material designated for each class. Read and formally brief each case
to understand its facts, the arguments made by the parties and the decisions reached by the
courts. Reread every case as many times as needed until you understand it.
Class discussion will often be oriented around one or more primary cases, which are
noted below.
Be prepared to apply the law you have learned from other cases in the
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casebook, and to be able to apply past cases to new situations. Designating a case or note
in the casebook as a primary case does not in any way suggest that other cases or notes in
the assigned casebook or statutory supplement reading may not be discussed.
Please be certain to read and prepare the assigned Hypos in the casebook, we will cover
them as class time permits.
EXAMINATION AND GRADING
There will be a three-hour final exam administered during final examination week.
Students will be permitted to use their statutory supplement book during the examination.
Further details - to be announced.
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WEEK 1 - AUGUST 20
Administrative Matters
Syllabus Review
CB Pgs 1- 46 Chap 1
TYPES OF SECURITIES
COMMON STOCK/PREFERRED STOCK/BONDS
PRIMARY & SECONDARY MARKET TRANSACTIONS
The Regulatory Framework
The 1934 Act
The 1933 Act
The Investment Company Act of 1940
Sarbanes-Oxley Act of 2002
Corresponding Statutory Supplement Material
and Extreme Inc. Hypo
WEEK 2 - AUGUST 27
CHAP 2 - MATERIALITY
CB Pgs 47- 102
Basic v. Levinson
Oran v. Stafford
Virginia Bankshares v. Sandberg
In Re Franchard Corp.
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SEC v. Fehn
A.P. Smith Mfg v. Barlow
See Statutory Supplement As Necessary
and Six Feet Inc. Hypos
WEEK 3 - SEPT 3
LABOR DAY CLASSES IN SESSION
CB Pgs 103 - 155
CHAPTER 3 DEFINITION OF A SECURITY
SEC v. W.J. Howey Co.
International Brotherhood v. Daniel
SEC v. SG Ltds.
United Housing Foundation v. Forman
See Statutory Supplement As Necessary
and HiFiWi Hypos
WEEK 4 - SEPT 10
CHAPTER 4 - DISCLOSURE & ACCURACY
LECTURE on Subpoenas, Judicial Remedies, Judicial
Review of Administrative Remedies
CB Pgs 156-205
SEC v. Edwards
Landreth Timber v. Landreth
Reeves v. Ernst & Young
See Statutory Supplement As Necessary
WEEK 5 - SEPT 17
CHAPTER 5 - Rule 10 b-5
CB Pgs 235-249
And 250 - 284
Herman & MacLean v. Huddleston
Blue Chip Stamps v. Manor Drug Stores
SEC v. Zandford
See Statutory Supplement As Necessary
and DitgitalBase Inc. Hypo
WEEK 6 - SEPT 24
CONT’D CHAPTER 5 -RULE 10b-5
CB Pgs 284 - 341
& 347 -356
Santa Fe Industries v. Green
Gallagher v. Abbott Laboratories
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Asher v. Baxter International
Ernst & Ernst v. Hochfelder
Florida State Board of Admin. v. Greentree Financial Corp.
Affiliated Ute Citizens of Utah v. U.S.
Basic Inc. V. Levinson
Dura Pharmaceuticals v. Broudo
Central Bank of Denver v. First Interstate Bank
Pidcock v. Sunnyland America
Garnat v. Stifel, Nicolaus & Co.
See Statutory Supplement As Necessary
WEEK 7 - OCT 1
CHAPTER 6 —INSIDER TRADING and SECTION 16
CB Pgs. 357-407
Strong v. Repide.
Charella v. U.S.
Dirks v. SEC
Carpenter v. U.S.
U.S. v. Hagan
Kern County v. Occidental Petroleum
Foremost - McKesson v. Provident Securities
See Statutory Supplement As Necessary
and Sparrows Securities Hypo
WEEK 8 - OCT 8
CHAPTER 7 PUBLIC OFFERING
CB Pgs, 409 - 459
Smartway Incorp. Hypo
LECTURE AND DISCUSSION OF
DIFFERENT TYPES OF PUBLIC OFFERINGS
THE UNDERWRITING PROCESS
UNDERPRICING, ECONOMICS AND CAPITAL
STRUCTURE OF PUBLIC OFFERINGS
GUN JUMPING RULES
MARKET SENTIMENT
PROSPECTUS REQUIREMENTS
See Statutory Supplement As Necessary
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WEEK 9 - OCT 15
CHAPTER 8 CIVIL LIABILITY UNDER THE
SECURITIES ACT
CB Pgs. 480- 545
and InterPhone Inc.Hypo
Abbey v. Computer Memories Inc.
Escott v. BarChris Construction Corp
In Re WorldCom Inc. Securities Litigation
Sanders v. John Nuveen
See Statutory Supplement As Necessary
WEEK 10 - OCT 22
CB Pgs. 546-575
CHAPTER 9 - EXEMPT OFFERINGS
Beecher v. Able
Pinter v. Dahl
Gustafson v. Alloyd
SEC v. Ralston Purina
and Trendy Inc. Hypos
Doran v. Petroleum Management
In the Matter of Kenman Corp
See Statutory Supplement As Necessary
WEEK 11 - OCT 29
CB Pgs, 575-638
cont’d Trendy Inc. Hypos
CONT’D CHAPTER 9 - EXEMPT OFFERINGS
REGULATION D & REGULATION S
BEGIN CHAPTER 10 SECONDARY MARKET
TRANSACTIONS
Busch v. Carpenter
Gilligan, Will & Co. V. SEC
See Statutory Supplement As Necessary
WEEK 12 - NOV 5
Island Tours Hypos
CB Pgs. 642- 667
CHAPTER
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SECONDARY
TRANSACTION SEC 16(b)
RULE 144 and 144A
U.S. v. Wolfson
Ackerberg v. Johnson
See Statutory Supplement As Necessary
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MARKET
WEEK 13 - NOV 12
CHAPTER 11 FEDERAL REGULATION
SHAREHOLDER VOTING & RULE 14a
OF
CB Pgs. 668-700
Solicitation of Proxies
Disclosure and Filing Requirements
J.I. Case Co. V. Borak
Gould v. American-Hawaiian S. S. CO
Mills v. Electric Auto-Lite Co.
Virginia Bankshares v. Sandberg
See Statutory Supplement As Necessary
WEEK 14 - MONDAY NOV 19
CB Pgs. 700 - 724
CONT’D CHAPTER 11 - FEDERAL REGULATION OF
SHAREHOLDER VOTING & SHAREHOLDER
DEMOCRACY
New York City Employee v. Dole Food Co., Inc.
The Williams Act
And CB 725 - 758
CHAPTER 12 - TAKEOVER REGULATION &
TENDER OFFERS
General Time v. Talley Industries
The Collapse of Enron (Handout)
See Statutory Supplement As Necessary
Thanksgiving Holiday No Classes Nov 23 -28
(CATCH UP TIME IF NEEDED)
REVIEW AND EXAM DISCUSSION
Last day of Class Nov 27
FINAL EXAM PERIOD DEC 3-14
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