Securities Law & Antitrust Law


Week 4 Lecture

Welcome to week 4!  This week deals with securities and antitrust laws. This week’s assignments include reading chapter 31 of the textbook, two (2) discussion board questions, and an assignment. As for the discussion boards, I expect you to post your initial posting by Thursday and respond to at least two (2) of your classmates posts.  As for the discussion questions, you can use your textbook as a reference as well as other outside academic references.   The rubic for the discussion boards can be found in the class room.  Please email me with any questions. 

            Securities are documents that merely represent an interest or a right in something else; they are not consumed or used in the same way as traditional consumer goods. Therefore, securities law deals with the rules and regulations of securities.  There are many laws and statutes that deal with securities.  The two (2) main laws are the Securities Act of 1933 and the Securities Exchange Act of 1934.  The Securities Act of 1933 is the federal law that covers the sale of securities in the primary market (Liuzzo, 2013).   The primary market is a place where in the company can sell its securities to the market such as the New York Stock Exchange.  The Act of 1933 two basic objectives:

· require that investors receive financial and other significant information concerning securities being offered for public sale; and

· prohibit deceit, misrepresentations, and other fraud in the sale of securities.

A primary means of accomplishing these goals is the disclosure of important financial information through the registration of securities. This information enables investors, not the government, to make informed judgments about whether to purchase a company's securities.


A year later, the Securities Act of 1934 was passed which covered the trading of securities in the secondary market (Liuzzo, 2013).    The secondary market is defined as the place where one member of the public sells its securities to another member of the public (Liuzzo, 2013).     Additionally, the Securities Exchange Act of 1934, created the Securities and Exchange Commission (“SEC”). The Act empowers the SEC with broad authority over all aspects of the securities industry. This includes the power to register, regulate, and oversee brokerage firms, transfer agents, and clearing agencies as well as the nation's securities self-regulatory organizations (SROs). For more information on the various securities law, please visit 

Another example of a Securities law is the Sherman Act, which is a federal statute that forbids certain agreements that tend to unreasonably inhibit competition, price fix or allocate territories or limited production (Liuzzo, 2013).    This Act requires the federal government to investigate and pursue trusts, companies, and organizations suspected of violating the Act. It was the first federal statute to limit cartels and monopolies, and today, still forms the basis for most antitrust litigation by the United States federal government.  This law attempts to prevent the artificial raising of prices by restriction of trade or supply. 

There are two (2) additional antitrust acts:  The Federal Trade Commission Act, which created the FTC, and the Clayton Act.  The Federal Trade Commission Act bans "unfair methods of competition" and "unfair or deceptive acts or practices." The FTC Act also reaches other practices that harm competition, but that may not fit neatly into categories of conduct formally prohibited by the Sherman Act. Only the FTC brings cases and/or claims under the FTC Act.

The Clayton Act addresses specific practices that the Sherman Act does not clearly prohibit, such as mergers and interlocking directorates (that is, the same person making business decisions for competing companies). Section 7 of the Clayton Act prohibits mergers and acquisitions where the effect "may be substantially to lessen competition, or to tend to create a monopoly." The Clayton Act also bans certain discriminatory prices, services, and allowances in dealings between merchants. However, this Act authorizes private parties to sue for triple damages when they have been harmed by conduct that violates either the Sherman or Clayton Act and to obtain a court order prohibiting the anti-competitive practice in the future.   As for the Antitrust Acts, a great resource is found at 

I hope that the above examples help you to better understand this week’s material.  Again, if you have any questions, please do not hesitate to contact me.  


Liuzzo, Anthony. ( 2013).  Essentials of Business Law. New York: NY. McGraw Hill.