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Investor Protection

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Title: PowerPoint Presentation Author: us Last modified by: mccreeryJ Created Date: 8/8/2003 7:08:32 PM Document presentation format: On-screen Show – PowerPoint PPT presentation

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Title: Investor Protection


1
  • Investor Protection
  • How the SEC Can Help
  • Jack McCreery, staff attorney
  • Office of Investor Education and Assistance

2
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 SECs
    staff.

3
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

7
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

15
Sources of Company Info
  • 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)

16
What Youll 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 MDA
  • Item 7A Market risk
  • Item 8 Financial statements
  • 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

17
What Youll 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.

18
Stock Ownership Forms
  • 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.

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Helpful Materials atwww.sec.gov
  • On-line publications
  • Calculators
  • Check out Brokers Advisers
  • Complaint Center
  • Fast Answers to securities questions

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Ways to Diversify
  • 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

31
Watch Out for Costs
  • 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 SECs online Mutual Fund Cost Calculator

32
Research Your Broker!
  • Find out your brokers 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 states regulator a
    call
  • You owe it to yourself to know with whom you are
    doing business

33
Research Your Adviser!
  • Investment advisers who manage 25 million or
    more in client assets generally must register
    with the SEC
  • Check the SECs 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

34
Research Any Investment!
  • Read everything you can about a company
  • Check out company filings through the SECs
    website (www.sec.gov) EDGAR
  • If you dont understand an investment product,
    dont buy it
  • If it sounds too good to be true, it probably
    is.

35
Psst-want a hot stock tip?
  • 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 shouldnt miss)

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SEC Contact Information
  • Website www.sec.gov
  • Phone 1-800-732-0330
  • Email help_at_sec.gov
  • Mail U.S. Securities and Exchange
    Commission
    100 F Street, NE
    Washington, DC 20549-0213
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