This course is about the growth and regulation of the global capital markets which provide the means by which individuals and countries develop and prosper. The markets sometimes collapse, as what happened in 1929 in the United States. The U.S. Securities & Exchange Commission and other agencies were organized to protect investors from the consequences of such a collapse. Some commentators believe that this intrusion of government on the free markets was unnecessary and counter-productive; others think that there has been insufficient oversight and funding for government agencies to become effective.
We will focus on the basics of the regulatory system. However, we also will review advice on how to effectively represent clients who are looking for capital and proposals on how to deal with company managers who mislead investors.
If Ethel O. sells you a horse for $1000 and does not tell you that it has a fatal infection, do you have a good claim against her? What if she says she did not know, the horse was just sluggish. What if Ethel O. were the President of an energy company and she was selling a hundred million dollars of stock in the company, which will write energy contracts to be sourced by special windmills and other non-fossil energy? She promotes the sale of the stock for $1 each by advertisements of beautiful green landscapes with a few windmills which she designed in her art class. If no such windmills or other energy sources exist, does she have a problem? If so, what is it?
What are hot issues, churning, the efficient capital market hypothesis, junk bonds, hedging, portfolio theory, puts and calls, securitization of assets, derivative securities, and index arbitrage? You do not need to know to take this course.
Each student will be assigned a company to represent during the semester. This will involve accessing the company's annual, quarterly and periodic reports on the internet. See http://www.edgariq.com.