The Ralston-Landreth-Gustafson Harmony: A Security!
44 Pages Posted: 17 Sep 2012 Last revised: 26 Nov 2012
Date Written: September 12, 2012
The legal definition of a security is incomplete but consistent with the economic function of securities transactions and the financial theory of securities valuation (the Capital Asset Pricing Model). The switch of the regulatory environment from buyer beware to seller disclose is justified because buyers lack access to information and control. Despite that this analysis makes Landreth and Ruefenacht appear questionable, the regulation of private sales of securities that arises from Ralston Purina, Landreth, and Gustafson is superior to what the drafters of the ’33 Act could have anticipated.
Keywords: Securities Registration, Private Placement Memoranda, Security Definition
JEL Classification: K22
Suggested Citation: Suggested Citation