| Employees' Duty of Loyalty |
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| Generally, an employee owes the duty of undivided loyalty to his or her employer. Courts take varying approaches to the issue of an employee's duty of loyalty. Some jurisdictions do not acknowledge a separate cause of action for an employee's breach of loyalty unless there is a fiduciary relationship between the employer and the employee. The claim is usually pleaded as a breach of a fiduciary duty. Some jurisdictions recognize a separate claim for an employee's breach of the duty of loyalty but also acknowledge its relationship to a fiduciary breach. A common thread in all jurisdictions is that employees who occupy a position of trust and confidence owe their employers a higher duty of loyalty than lower-level employees. The scope of the duty of loyalty depends on the particular fact circumstances and the nature of the employment relationship.
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| Initial Public Offerings & the Securities Act of 1933> Registration of Securities> Registration Statement Filing |
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| Pros and Cons for a Company Going Public More... |
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| The Quiet Period Pending Securities Registration Statement Effectiveness |
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| There is a "quiet period" between the time that a company files a registration statement with the Securities and Exchange Commission for a new public securities offering and the time that the Commission declares the registration statement effective. During the quiet period, referred to as the "waiting period" also, the company and related parties are prohibited by federal securities laws from releasing information to the public that could be construed as promoting sale of the securities covered by the as yet unapproved registration statement. More... |
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| Short-Swing Profits |
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| Section 16(b) of the Securities Exchange Act of 1934, 15 U.S.C.S. § 78p(b), limits the ability of corporate insiders and principal stockholders to profit from their access to nonpublic information about their company. Under Section 16(b), profits from two trades of a company's publicly traded securities within six months by a director, officer, or beneficial owner of more than ten percent of a security of the company are owed to and may be recovered by the company. If the company does not retrieve those profits, shareholders may file a derivative action to obtain a court order to have the profits given over to the company. More... |
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| Independent Director Requirements for Nasdaq Listed Companies |
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| The Nasdaq Stock Exchange, Inc., has adopted Rule 4350(c)(1), which requires that every company listed on Nasdaq must have independent directors as the majority of the company's board of directors. Each listed company must publicly disclose which of its directors are considered independent by identifying the independent directors in the company's annual meeting proxy statement or in the company's annual report on Securities and Exchange Commission Form 10-K. More... |
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