Discussion on Securities Law/ AntiTrust Law

Securities Law/ AntiTrust Law and Please answer discussion questions separately and list references for each

 Securities Law/ AntiTrust Law


It is a mandate provided by the Federal Laws, that the securities must be registered before they are up for sale, but there are also exceptions provided by the Securities Act, 1933. Under Rule 504 of Regulation D of the Act of 1933 (17 CFR 230.504 - Exemption for limited offerings and sales of securities not exceeding $5,000,000.), if the company offers and sells the securities which amounts up to $5,000,000 for a period of one year, then they are in the exempted categories and will not be required to register their offering with the Securities and Exchange Commission (SEC) under the Securities Act of 1933. So, Private University, being a private nonprofit educational institution, will get the benefit of exemption provided that they stick to the mandated amount of $5,000,000 and also that they do not do their business outside California, since under Rule 147 (17 CFR 230.147 - Intrastate offers and sales.), there is a requirement to do 80% of the business in one single state in order to qualify for the exemption.
But, if the shares are issued by Private College, a proprietary for-profit institution which is involved into business in all fifty states, then obviously they will not be exempted from registration due to the following points:
  •  Rule 504 of Regulation D of Securities Act, 1933 (17 CFR 230.504 - Exemption for limited offerings and sales of securities not exceeding $5,000,000.), provide exemption for non- profit organizations and hence for- profit organizations cannot avail it.
  • Rule 147 of Securities Act, 1933 (17 CFR 230.147 - Intrastate offers and sales.), states a requirement of doing 80% of the business in one state, but the Private College in involved into the business in all the fifty states, so they cannot be exempted from registration. 


17 CFR 230.147 - Intrastate offers and sales. (n.d.). Retrieved from https://www.law.cornell.edu/cfr/text/17/230.147
17 CFR 230.504 - Exemption for limited offerings and sales of securities not exceeding $5,000,000. (n.d.). Retrieved from https://www.law.cornell.edu/cfr/text/17/230.504

Discussion 2

In order to manage the anti- competitive practices, the Antitrust laws (United States- Department of Justice) are created. The price theory, which determines the process of decision- making and the industrial organization which relates to the establishment of market, are considered to be the basic in understanding the antitrust policies (Grubb, 2015). A perfect competitive market occurs when information is available to all, but there are also monopoly situations which prevails in almost all economy, and in monopoly business, outputs gets increased and so does the profit margins. So, when the profits heighten, the production increases along with the formation of new companies and this situation continues till there is an intersection of demand and supply (Herweg, 2013), so if the two giants like AT&T and T-Mobile were allowed to have a merger (Scott Moritz- Bloomberg News, 2011), then that would have been an accumulation of major control on the cellular market, which essentially creates the existence of duopoly, and in so doing there would have been manipulation of price along with lesser availability of products and also fixation of prices which will undermine the whole market of cellular communication. Thus, government was justified in stopping this merger in accordance with the Antitrust laws (United States- Department of Justice), which is regulatory code to stop and restrict these kind of unethical business practices and to uphold a healthy market condition. 


Grubb, M. D. (2015). Behavioral Consumers in Industrial Organization: An Overview. Review of Industrial Organization, 247-258.
Herweg, F. &. (2013). Uncertain demand, consumer loss aversion, and flat-rate tariffs. Journal of the European Economic Association, 399-432.
Scott Moritz- Bloomberg News. (2011, December 19). AT&T pulls $39 billion T-Mobile bid. Retrieved from https://www.deseretnews.com/article/700208468/ATT-pulls-39-billion-T-Mobile-bid.html 
United States- Department of Justice. (n.d.). The Sherman Antitrust Act, The Clayton Act, The Federal Trade Commission Act. Retrieved from https://www.justice.gov/atr/antitrust-laws-and-you

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