III. Compliance A. While investigating the shares offered to you by your potenti
ID: 2619468 • Letter: I
Question
III. Compliance A. While investigating the shares offered to you by your potential boss, you discover that the company you are considering working for is not registered as required under the Securities Act of 1933. How does this influence you as a potential employee and as a potential shareholder? 8 sure to reference any applicable statutes or laws B. You know that accepting this job may eventually lead to a promotion into the role of the financial manager. As the potential financial manager what federal and shareholder requirements would you need to be familiar with in order to ensure that you are being completely compliant?Explanation / Answer
Answer to 1)
Under the employee stock option plan, the securities must be registered pursuant to the dictates of securities act 1933. Civil liability may arise for failure to comply with the registration & disclosure provisions of securities act. Hence the employee must make investment decision before buying the shares offered by his boss or in other words he is not advised to buy the shares that are not registered.
Answer to 2)
Federal requirements of finance managers:
Shareholder requirements of finance managers:
Financial managers must be aware of the risk preferences of his shareholders & invest funds accordingly. They must avoid changing the risk profile of the company without the approval of the shareholders. This could lead to existing shareholders leaving the company.