Question

A. While investigating the shares offered to you by your potential boss(100 shares at stock price $50), you discover that the company you are considering working for is not
registered as required under the Securities Act of 1933. How does this influence you as a potential employee and as a potential shareholder? Be
sure to reference any applicable statutes or laws.

B. You know that accepting this job may eventually lead to a promotion into the role of the financial manager. As the potential financial manager,
what federal and shareholder requirements would you need to be familiar with in order to ensure that you are being completely compliant?

Answer 1

Answer;

A. When an employee is offered a share by a company which is not registered as required under the Securities Act then it is mandatory for the organization to present a disclosure certificate to its potential buyers at the time of purchase. At no instance should these information come as a surprise to the employees. In this case, the employee can take decision based on the information presented in the shareholder document. If the information seemed to be forged then they can initiate criminal and civil proceedings againsts the company or the employer. There are also conditions that states that if all conditions of the exemptions are not met, then the purchasers may be able to return their securities and obtain a refund of their purchase price.

B. As a financial manager it is important to make sure that the organization sticks onto all the statutory requirements. It is necessary for the organization to be completely complaint with the federal and the State formalities such that legal or criminal proceedings are avoided. The federal and shareholder requirements that are required to be familiar in order to be completely complaint are as follows:

1.Details of non-public offerings
2.Regulation D with respect to Rules 504, 505 and 506
3.updations with respect to Government orders
4.Details of Exemptions
5.Restrictions of Offer and other Federal and State Rules
These are some of the areas in which a financial manager are supposed to be familiar in order to handle shareholder and federal requirements.