Gun Jumping: The Problem of Extraneous Offers of Securities
Eric A. Chiappinelli
Texas Tech University School of Law
University of Pittsburgh Law Review, Vol. 50, No. 2, 1989
The central concept of the securities laws is that securities sold to the public be registered with the SEC. The registration provisions mandate certain disclosure while largely prohibiting any other dissemination of information about the issuer or its securities. Dissemination of such information during the registration process is called gun jumping. Although many scholars have written about mandatory disclosure, in the last thirty-seven years only two articles, in 1976 and 1977, have treated the restrictions on disclosure in any detail.
In this Article, Professor Chiappinelli examines the current restrictions on the dissemination of information (which he calls "extraneous offers") in light of modern finance theories. Although controversial, these theories, the Efficient Market Hypothesis, Modern Portfolio Theory, and the Capital Asset Pricing Model, have been applied to other aspects of securities regulation, including mandatory disclosure, in the past few years. The Article proposes that non-fraudulent extraneous offers that are disseminated to the public should, with minor exceptions, be permitted. The Article analyses Congress's goals in enacting the registration provisions, the current statutory and regulatory scheme, the SEC's attitude toward extraneous offers, and the effect permitting such offers would have on investor protection.
Professor Chiappinelli wrote this article while Associate Professor of Law at the University of Puget Sound School of Law.
Number of Pages in PDF File: 55Accepted Paper Series
Date posted: January 10, 2008
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