Responsibilities for offerings of Securities
A security offering is considered as a discrete investment round through which a business entity can raise capital to fund for its operations, expansion or any other business purpose (Banner, 1998). There are several components of rounds and various types of rounds in securities offerings. The federal law requires certain information to be disclosed in relation to securities offerings. Therefore, there are various responsibilities of several parties which ensure fairness, quality and accuracy in securities offerings. Some of these parties include the managers and directors of the issuing company, investment bankers and the securities lawyers. This paper will address the group that bears the most responsibility in security offerings. This essay will also discuss the involvement of these parties in offering securities.
There are several types of securities including stocks, debentures, collateral-trust certificates, transferable shares, and investment contracts among others. According to the U.S Supreme Court, any individual who exploits a manipulative device or makes an omission in securities offerings may be responsible as a primary violator under 10b-5. The managers and directors of the securities issuing company should update the company on any changes and progress in the company. The managers and directors are also required to be honest with company dealings and ensure keeping proper financial records. These persons are supposed to perform according to the best interest of the company (Australian Securities and Investments Commission, 2012).
The investment bankers also play a crucial role in securities offerings. This is because when a business entity decides to sell new securities to raise funds, this offering is known as a primary issue (Hiray, 2008). In this case, the investment banker is responsible for locating buyers for these securities. In addition, when a business entity wants to issue securities and sell to the general public, the investment bankers are also responsible for getting potential buyers for the corporation. The security lawyers are also beneficial when it comes to securities offerings. The security lawyers represent their clients in respect to the bonds, stocks and other financial instruments. They mainly deal with litigation, transactional practice and regulatory practice. Therefore, the security lawyers should be able to read and properly understand the financial data.
The securities lawyers, investment bankers, managers and directors of the issuing company play a significant role in ensuring that quality, fairness and accuracy is preserved in security offerings (Kane, 2012). The parties, which bear the most responsibility in securities offerings, are the managers and directors of the issuing company. This is because these individuals are supposed to act according to the best interest of the company. The managers and directors are supposed to be extremely careful when handling financial issues, which are related to the company. The manager and directors of a business firm bear the most responsibility when it comes to securities offerings.
The main goal of the Securities and Exchange Commission (SEC) is to secure the investors, maintain fairness and facilitate the formation of capital. The SEC oversees some of the key participants in the world of securities offerings. In this case, the SEC is mutually responsible for disclosing substantial market-related information, protection against fraud and ensuring fair dealings (U.S Securities and Exchange Commission, 2012).
In conclusion, the parties mentioned should not engage an independent company in security offerings because the SEC performs most of the tasks. Some of the prominent tasks include manipulating the price of securities, stealing securities, insider trading among others. This shows that the SEC is fully competent in dealing with security offerings in any corporation. Therefore, when the parties mentioned above engage an independent company in securities offerings, then, they will incur an extra cost at the expense of the corporation (U.S Securities and Exchange Commission, 2012).
Australian Securities and Investments Commission. (2012). Your company and the law. Retrieved from http://www.asic.gov.au/asic/asic.nsf/byheadline/Your+company+and+the+law?openDocument
Banner, S. (1998). Anglo-American securities regulation: Cultural and political roots, 1690–1860. New York: Cambridge University Press.
Hiray, J. (2008). Functions of investment banker. Retrieved from http://businessmanagement.wordpress.com/2008/08/01/functions-of-investment-banker/
Kane, S. (2012). Securities law. Retrieved from http://legalcareers.about.com/od/legalpracticeareas/a/SecuritiesLaw.htm
U.S. Securities and Exchange Commission. (2012). The investor's advocate:
How the SEC protects investors, maintains market integrity, and facilitates capital formation. Retrieved from http://www.sec.gov/about/whatwedo.shtml