Investor Protection

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• Investor Protection
• How the SEC Can Help
• Jack McCreery, staff attorney
• Office of Investor Education and Assistance

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The Usual Disclaimer

• The Securities and Exchange Commission, as a
  matter of policy, disclaims responsibility for
  any private publication or statement by any of
  its employees. The views expressed in this
  presentation are those of Mr. McCreery and do not
  necessarily reflect the views of the SEC, its
  Commissioners, or other members of the SECs
  staff.

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Who We Are and What We Do

• Created in 1934 following the Stock Market
  Crash of 1929
• Administer the federal securities laws
• Oversee brokerage firms and other investment
  service providers
• Review filings by most public companies

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How the SEC Protects Investors

• Assure that the securities markets are open,
  fair, and honest
• Require companies to disclose information
• Catch wrongdoers and impose punishment ranging
  from fines to kicking them out of the industry

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How the SEC Helps Investors Help Themselves

• Show investors how to research investments and
  the people who sell them
• Make information about publicly traded
  companies available to the public
• Answer questions and handle complaints
• Provide free educational materials

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SEC Web ResourcesWhere can I find

• Special collections of information, such as
  updates on Enron, WorldCom
• Financial statement filings from EDGAR
• Fast answers library and our glossary
• Calculators
• Hot stock recommendations!

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Who Must File Reports

• A company must file reports if
• It has 500 or more investors and 10 million or
  more in assets, or
• It lists its securities on
• American Stock Exchange
• Boston Stock Exchange
• Chicago Stock Exchange
• Cincinnati Stock Exchange
• International Securities Exchange
• Nasdaq Stock Market
• New York Stock Exchange
• Pacific Exchange
• Philadelphia Stock Exchange, or
• 3. Its securities are quoted on the OTCBB

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Tips for Searching EDGAR

• Ticker symbol search for 9400 largest   
  publicly traded companies
• To a find a company named for a person (e.g.,
  John Doe Widget Maker, Inc.), search last name
  first Doe John
• For most searches, Company Search will do
  For complex queries, use the Archives search

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Sources of Company Info

• Registration Statements (S-1, SB-1, F-1)
• Periodic Reports (Form 10-K for annual info, Form
  10-Q for quarterly results)
• Current Reports (Form 8-K)
• Proxy Statements (known in EDGAR as Form DEF 14A)

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What Youll Find in a 10-K

• Item 1 Business
• Item 2 Properties
• Item 3 Legal proceedings
• Item 4 Submission of matters to a vote
• Item 5 Market for securities
• Item 6 Selected financial data
• Item 7 MDA
• Item 7A Market risk
• Item 8 Financial statements

• Item 9 Change in accountants
• Item 10 Directors executive officers
• Item 11 Executive comp
• Item 12 Ownership (insiders)
• Item 13 Relationships related transactions
• Item 14 Accounting Fees services
• Item 15 Exhibits
• Signatures Certifications

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What Youll Find in an 8-K

• Section 1--Registrant's Business and Operations
  - Entry or termination of a material agreement
• Section 2--Financial Information Acquisition or
  Disposition of Assets, Creation of a Direct
  Financial Obligation, Material Impairments
•  
• Section 3--Securities and Trading Markets Notice
  of Delisting, Material Modification to Rights of
  Security Holders 
• Section 4--Matters Related to Accountants and
  Financial Statements Change of Accountants,
  Non-Reliance on Previously Issued Financial
  Statements 
• Section 5--Corporate Governance and Management
  Changes in Control, Departure of Directors or
  Principal Officers
• Section 6--Reserved (for future use)
•  
• Section 7--Regulation FD Disclosure 
• Section 8--Other Events Other Events (material,
  but not specified in 8-K instructions)
• Section 9--Financial Statements and Exhibits
  Financial Statements and Exhibits
• Companies have four days to file a Form 8-K for
  the events specified in the items in Sections 1-5
  and 9 above. However, if the issuer is furnishing
  a Form 8-K solely to satisfy its obligations
  under Regulation FD, then the due date might be
  earlier.

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Stock Ownership Forms

• Form 3 Insiders must file no later than the
  effective date of the registration statement, or,
  if the issuer is already registered, within ten
  days of becoming an officer, director, or
  beneficial owner.
• Form 4 Changes in ownership must be reported
  within two business days. Limited categories of
  transactions are not subject to the two-day
  reporting requirement.
• Form 5 Insiders use this form to report any
  transactions that should have been reported
  earlier on a Form 4 or were eligible for deferred
  reporting.

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Helpful Materials atwww.sec.gov

• On-line publications
• Calculators
• Check out Brokers Advisers
• Complaint Center
• Fast Answers to securities questions

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Ways to Diversify

• Use a mix of cash, bonds, and stocks in your
  portfolio
• Investing in mutual funds can provide
  diversification by company size, by industry
  sector, and sometimes by both
• Be sure you know your time horizons and risk
  tolerance before investing

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Watch Out for Costs

• Ask your broker about commissions
• Remember, your broker gets a commission whether
  you buy or sell, and whether you make money or
  lose money
• Be aware of account fees, margin fees, wrap fees,
  minimum balances, etc.
• Use the SECs online Mutual Fund Cost Calculator

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Research Your Broker!

• Find out your brokers background
• Check out your broker with the NASD online at
  www.nasdbrokercheck.com Call 1-800-289-9999
• Check with the state securities regulators online
  at www.nasaa.org or give your states regulator a
  call
• You owe it to yourself to know with whom you are
  doing business

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Research Your Adviser!

• Investment advisers who manage 25 million or
  more in client assets generally must register
  with the SEC
• Check the SECs Investment Adviser Public
  Disclosure website under Investment Management
  on our website
• Advisers with less than 25 million must register
  with the state securities agency where the
  principal place of business is

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Research Any Investment!

• Read everything you can about a company
• Check out company filings through the SECs
  website (www.sec.gov) EDGAR
• If you dont understand an investment product,
  dont buy it
• If it sounds too good to be true, it probably
  is.

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Psst-want a hot stock tip?

• www.mcwhortle.com
  (a very hot IPO opportunity)
• www.growthventure.com/parsons (a
  fabulous prime bank site)
• www.growthventure.com/oldglory (a
  glorious mutual fund)
• www.growthventure.com/grdi (a
  hedge fund you shouldnt miss)

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SEC Contact Information

• Website www.sec.gov
• Phone [phone]
• Email help_at_sec.gov
• Mail U.S. Securities and Exchange
  Commission
  100 F Street, NE
  Washington, DC 20549-0213