Legal Research & Case Analysis Flashcards

Which of the following is primary legal authority when researching a state securities question?

Answer: A state's enacted securities statute

Statutes, regulations, and court decisions are primary authority; commentary is secondary.

The doctrine of stare decisis means that courts generally:

Answer: Follow prior decisions of higher courts in the same jurisdiction

Stare decisis makes precedent from controlling courts binding on later similar cases.

An SEC staff no-action letter generally:

Answer: Reflects staff enforcement views and does not bind courts or the Commission

No-action letters are persuasive but are not law and apply to the facts presented by the requester.

Shearson/American Express v. McMahon held that predispute arbitration agreements are generally enforceable for claims under:

Answer: Rule 10b-5 of the Securities Exchange Act

McMahon enforced customer arbitration agreements for Exchange Act claims, and Rodriguez de Quijas later extended this to the 1933 Act.

Under the Uniform Securities Act's civil liability provision (Section 410), a buyer in an unlawful sale may generally recover:

Answer: Consideration paid plus interest, less income received, upon tender of the security

Section 410 provides a rescission-type remedy, with interest and attorney fees, upon tender of the security.

Gustafson v. Alloyd Co. held that the term 'prospectus' in Section 12(a)(2) of the Securities Act of 1933:

Answer: Refers to public offerings, not a private sale contract

Gustafson limited Section 12(a)(2) liability to public offering prospectuses, excluding private sale agreements.

Hall v. Geiger-Jones Co. is historically significant because the Supreme Court:

Answer: Upheld the constitutionality of state blue sky laws

The 1917 decision confirmed states may regulate securities sales to protect their residents.