North American Acceptance Corporation is selling Thrift Notes, ...

[Ebrown]

North American Acceptance Corporation is selling Thrift Notes, Thrift Certificates, and notes to the public. Its auditors wrote a letter in which they expressed growing concern about the company's financial position. The growing concern information was never disclosed. Are securities being sold? Who is liable for the failure to disclose?

Question 2

Consider the following transactions by a director of a corporation listed on the National Stock Exchange.  September 1, 2015, purchased 100 shares of his company's stock at 10 per share.  October 30, 2016, sold the 100 shares of stock for 7 per share.  November 30, 2016, purchased 100 shares of his company's stock for 5 per share.  Does the director have any liability under 16b?

[jonathanballen97]

Answer to Question 1

In Re North American Acceptance Corporation SEC Cases, 513 F.Supp.608 (N.D. Ga.1981). Yes, they are securities. Disclosure of financial conditions should have been made.

Answer to Question 2

Yes, SEC matches the highest sale with the lowest purchase; the director had a profit of 200 he owes to the corporation.

[Ebrown]

TYSM

Gracias!