ABSTRACT

As was seen in the previous chapter, the basic purpose of the statutory provisions on prospectuses requirements is to ensure that investors have available to them adequate, reliable information about companies and their securities when the latter are offered to the public. Of course, there may be adverse market consequences for companies which issue misleading prospectuses. However, it is generally accepted that a major incentive for issuers of securities to provide accurate information is a regime of legal sanctions for misstatements or omissions in prospectuses.