Mergers and Acquisitions Solutions

SEC Form DEFM14A must be filed with the Securities and Exchange Commission (SEC) prior to a merger or acquisition that will require a shareholder vote. Under The Securities Exchange Act of 1934, the form is meant to uphold shareholders’ rights by providing them with enough information to enable them to vote at a security holders’ meeting or via a proxy vote that they authorize.

Also known as the definitive statement relating to merger or acquisition, each filed DEFM14A is displayed publicly online using the SEC’s EDGAR (Electronic Data Gathering, Analysis, and Retrieval) computer system for the receipt, acceptance, review and dissemination of documents submitted in electronic format to the Commission.

The filing includes the date, time and place of the meeting of security holders; revocability of proxy; dissenter’s right of appraisal; individuals making the solicitation; direct or indirect interest of certain persons; modification or exchange of securities; financing information and financial statements; risk factors; voting procedures; acquisition or disposition of property; amendment of charter, bylaws, or other documents; and other key details. For support and additional information, explore our Regulatory Disclosure Solutions.

The preliminary proxy statement, also known as the PRE 14A, is a form required by the Securities and Exchange Commission (SEC) when there is a request of shareholder votes on items unrelated to an acquisition or a contested matter. For support and additional information, explore our Annual Meeting and Proxy Solutions.

A tender offer is an offer from an investor, or investor group, to purchase a specified minimum of the company’s shares at a price point that is typically higher than the stock price, making the offer attractive to current shareholders. Since the offer is made to current shareholders, the purchase of a controlling interest in the company stock may be done without the company’s approval. With no required company involvement, tender offers can be hostile takeovers. Shareholders of the acquired entity may realize a significant return on the transaction and the acquiring company benefits can include increased revenue as well as decreased competition. For support and additional information, explore our Capital Markets Transactions solutions. 

SEC Section 16 of The Securities Exchange Act of 1934 requires corporate insiders to publicly disclose their company affiliations, material changes in their holdings or unreported insider transactions through various regulatory filings with the SEC. Specifically, Section 16 mandates that Forms 3, 4 and 5 be filed by insiders—in other words, company investors who are directly or indirectly beneficial owners of more than 10% of stock in a company or directors and officers of the issuer of the securities. An insider of a first-time securities issuer or a new insider at an already-registered securities issuer must carry out the initial filing, Form 3. Form 4 is used to report material changes in insiders’ holdings. Form 5 reports any transactions that should have been included on a previous Form 4 or were eligible for deferred reporting such as gifts of shares or multiple small transactions. Section 16 reporting must be submitted electronically through the EDGAR computer system for the receipt, acceptance, review and dissemination of documents submitted in electronic format to the Commission. The SEC also requires companies to post the forms on their websites by the end of the next business day after filing them. Section 16 reporting deadlines were accelerated due to provisions of the SOX, the Sarbanes-Oxley Act of 2002. For support and additional information, explore our solutions here.

The Securities Act of 1933 is commonly referred to as the ’33 Act or the Truth in Securities law. It was the first major federal legislation enacted to regulate the securities markets. In response to the Wall Street Crash of 1929, new measures were put into place. This was to ensure better transparency in financial statements so investors could make informed decisions. It also protected them from fraudulent activity and deceit in the securities market.

Before the ’33 Act, the regulation of securities was handled by the states. This led to a lack of consistency in how securities were issued and disclosed. Furthermore, enforcement was also inconsistent.

The ’33 Act required companies to register with the SEC. They also had to provide potential investors with standard documentation, including a prospectus. This prospectus included certified financial statements, information about management, business plans, and a description of the securities being offered. For a company to go public, its shares must be traded on an exchange. The Securities and Exchange Commission (SEC) must declare the company’s submission “effective” for this to happen.

The ’33 Act set out regulations to protect investors. These included uniform rules for public company reporting and disclosure requirements. This was to help prevent fraudulent activities or misrepresentation. Additionally, it established oversight at the federal and state level.

President Franklin D. Roosevelt signed the Securities Act of 1933 into law as part of the New Deal. This happened during the Great Depression. The 1920s saw a meteoric rise in the stock market. On Black Thursday, Oct. 24, 1929, the stock market crashed, losing 11% of its value. This crash marked the beginning of a cataclysmic event.

Then came Black Monday, October 28, 1929, when the stock market fell 13% in a single day. The following day, the market dropped 12%. This downturn continued until mid-November, when the market had lost nearly half of its value. It took 15 years for the market to reach pre-crash levels again.

The fall caused fear among potential investors and consumers, who worried about their financial future. This fear led them to refrain from spending, making the economic situation worse and causing more contractions.

The United States didn’t fully emerge from the Stock Market Crash of 1929 and the ensuing Great Depression until World War II which required men and machinery to fuel the effort. The Stock Market Crash that permeated America for more than a decade was attributed to a speculative boom that went uncontested. With the ’33 Act, capital markets regulation was in the hands of the Federal Government.

Standards including the creation and submission of registration statements that include a prospectus containing detailed financial information on the securities offered, company and business.

All those signing the registration statement, including the company’s senior management and underwriter, must conduct thorough due diligence to verify that the document is complete and accurate.

Registration statements and their accompanying prospectuses must be filed via the SEC’s EDGAR (computer system for the receipt, acceptance, review and dissemination of documents submitted in electronic format to the Commission. These registration statements are examined by the SEC to ensure that they are compliant with disclosure requirements and that the American public and investors can make informed decisions about their investment decisions.

For support and additional information, explore our Capital Markets Transactions solutions.

The Securities Exchange Act of 1934 created the U.S. Securities and Exchange Commission (SEC) and authorized it to govern the secondary market trading of company securities in the U.S. Secondary trading is the buying or selling of company securities (stock) typically through brokers or dealers. Often shortened to the Exchange Act of 1934 or the ‘34 Act, this landmark legislation laid the foundation for the financial regulation of public companies listed on stock markets including the New York Stock Exchange, American Stock Exchange and Pacific Stock Exchange.

President Franklin D. Roosevelt first signed the Securities Act of 1933 and the subsequent Securities Exchange Act of 1934 into law in the aftermath of the Stock Market Crash of 1929. The Securities Exchange Act of 1934 gives the SEC broad powers to enforce U.S. federal securities law, but also investigate potential violations such as insider trading, the sale of unregistered stocks, manipulation of market prices and disclosure of fraudulent financial information. The SEC’s consumer protection powers extend to the organizations and individuals participating in the securities markets which would include securities exchanges, brokers and dealers, investment advisors and investment funds. By law, and with SEC oversight, consumers and investors have access to public company registration statements, periodic reports among other securities forms through the EDGAR computer system for the receipt, acceptance, review and dissemination of documents submitted in electronic format to the SEC.

If a company has more than 500 shareholders and more than $10 million in assets, the Securities Exchange Act of 1934 requires that it file annual company information with the SEC using SEC Form 10-K as well as quarterly with SEC Form 10-Q. If a company experiences a material event such as a change in leadership or structure, the SEC mandates the filing of SEC Form 8-K to disclose these changes. Forms 10-K, 10-Q, and 8-K must be filed via the SEC’s EDGAR online system. These periodic reports and annual statements are examined by the SEC to ensure that they are compliant with disclosure requirements and that the American public and investors can make informed decisions about their investment decisions.

The Securities Exchange Act of 1934 also sets forth disclosure requirements in materials used to solicit shareholder votes in annual meetings held for approval of corporate action. The information is captured in proxy materials that must be filed with the SEC in advance of any solicitation. The SEC is charged with ensuring the company has provided all proper and accurate disclosures.

The Securities Exchange Act of 1934 requires disclosure of important information by anyone seeking to acquire more than 5 percent of a company’s securities by direct purchase or tender offer as such an offer could impact control of the public company.

The SEC is limited to seeking civil penalties such as fines and injunctions, barring a person from future roles such as a corporate officer. Depending on the severity or significance of the offense, the Department of Justice can file criminal charges for alleged violations of the Securities Exchange Act of 1934. The largest SEC fine to date was levied on JP Morgan Chase for the selling of mortgage securities by illegal means, leading to the 2012 financial crisis. For support and additional information, explore our SEC reporting solutions.