What is Self-Dealing? Self-dealing is an illegal conduct where a fiduciary takes advantage of his position and acts in his own best interest rather than that of his client or beneficiary. Self-dealing is an illegal act as it represents a conflict of interest, and can lead to penalties, termination of employment, and litigation in most cases. While s...

What is Whitemail? Whitemail is a strategy that a target company can implement for stopping the hostile takeover. Under whitemail, the target organization issues a large number of shares at the prices prevailing below market rates, which are then offered to an amiable third party for sale. As the number of shares becomes large, it becomes difficult ...

What is Unissued Stock? An Unissued stock refers to stock owned by a company but have not been issued or offered for sale in the market. Unissued stock is a class of stock that has been authorized for use in the charter of a company but are yet to be issued. Unissued stocks do not accumulate dividends, neither are they useful for casting votes durin...

What is a Negotiable Instrument? An instrument refers to a document representing ownership of an underlying right or obligation. Instruments can refer to stocks, securities, commodities, derivatives, indexes, or any other similar asset. It can also consist of legal documents, contracts, deeds, and wills, among many others. An negotiable instrument i...

How to Write an Article of Incorporation? All business entities exist under state law. That is, state law recognizes the formation of a business entity. If a business entity is formed in one state, it must generally register to do business in another state if it carries on activities there. This certifies to the second state that the business entity...

What are Pre-employment Test?  Employers regularly use standardized tests to evaluate, select, and eliminate candidates for employment positions. The purpose of the tests is to measure attributes of the applicant, such as personality, cognitive ability, emotional intelligence, skills, health fitness, financial stability, etc.  It is important to not...

What damages are available to a plaintiff under Section 10(b) and Rule 10(b)(5)? While both the SEC and a private plaintiff may enforce the antifraud provisions of Section 10 and Rule 10(b)(5), only purchasers or sellers of securities may bring a private action for damages under Rule 10(b)(5). A private plaintiff in a suit under 10(b)(5) may recover...

Overview of Securities Law Securities is a broad term that basically refers to any form of ownership or beneficial interest in a business entity. Securities law concerns the sale or transfer of these business interests. This chapter introduces the security and the catch-all provision for investment contracts as securities. It explains the primary st...

What is a Rule 504 small offerings exemption? Rule 504 is a transactional exemption from registration under Regulation D for small securities offerings. The statutory authority for the rule is pursuant to Section 3(b) of the 33 Act.  What are the Requirements for a Rule 504 small offerings exemption? The general requirements and limitations on the e...

What is Government Spending? Government spending covers a range of services that the federal, state, and local governments provide.  What is a Budget Deficit and Surplus? When the federal government spends more money than it receives in taxes in a given year, it runs a budget   deficit. Conversely, when the government receives more money in taxes th...