The eLearning Center for Gatlin Education Services

Professor Glazer''s course describes how attorneys should approach reading and interpreting the extremely complex Sections 16(a) and (b) of the Securities Exchange Act of 1934, and the Exchange Act Rules. Topics covered include the methodology to follow when investigating and/or guarding against potential Section 16 transgressions; definitions of 'beneficial owner,' 'director,' and 'officer;' information about when to file which reports (along with copies of all relevant forms and instructions); how to handle transactions involving equities, derivative securities, stock option plans, mergers, and pre-IPO stock purchases; and more.

Section 16 of the 1934 Act (Short Swing Sales)

    I. Overview

    II. Section 16(a)

        A. Reading 16(a)

        B. Beneficial Owner

        C. Director

        D. Officer

        E. What Reports Are Filed?

        F. What Information Is Disclosed?

        G. Beneficial Ownership

            1. Beneficial Ownership: Definition

            2. Beneficial Ownership: Example
        H. Equity & Derivative Securities

            1. Definition

            2. Equity & Derivative Securities: Examples

            3. Equity & Derivative Securities: Exception

            4. Equity & Derivative Securities: Unregistered Stock
        I. What Transactions Are Reported?

            1. Overview

            2. What Transactions Are Reported: Newly-Elected Director/Officer

            3. What Transactions Are Reported: Before Election as Director/Officer

            4. What Transactions Are Reported: After Termination as Director/Officer

            5. What Transactions Are Reported: Transactions by a Director

            6. What Transactions Are Reported: Transactions by a 10% Owner

            7. What Transactions Are Reported: Deputization
        J. Form 3

        K. Form 4

            1. Overview

            2. Form 4: Options & Option Exercises

            3. Form 4: Phantom Units & Cash
        L. Form 5

        M. Late Filing & Other Potential Problems

        N. Trusts
    III. Section 16(b)

        A. 16(b): Overview

        B. Reading 16(b)

        C. Derivative Securities

            1. Overview

            2. Derivative Securities: Call Equivalent Positions / Increase Deemed Purchase of Underlying Stock

            3. Derivative Securities: Put Equivalent Positions / Decrease Deemed Purchase of Underlying Stock

            4. Derivative Securities: Deemed Sales of Underlying Stock

            5. Derivative Securities: Exercising Options

            6. Derivative Securities: Same Day Purchase and Sale

            7. Derivative Securities: Deemed Purchase Price
        D. Rule 16b-3: Transactions Between Officers/Directors and Company

        E. Rule 16b-3(c): Tax-Conditioned Plans

        F. Stock Option Plans

        G. Rule 16b-3(e): Dispositions to the Issuer

        H. ‘Short Answers’ Article

        I. Mergers

        J. Pre-IPO Stock Purchase
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