Chapter 8 - § 8.1 • UNORTHODOX SECURITIES TRANSACTIONS

• Jurisdiction: Colorado

§ 8.1 • UNORTHODOX SECURITIES TRANSACTIONS

There are several types of transactions involving an offer or sale of securities that may not be immediately recognized as being subject to the registration requirements of § 5 of the 1933 Act. The question usually involved in determining the applicability of the registration requirements is whether the proposed recipient of shares is surrendering something of value in exchange for the shares. As seen in Chapter 3, the 1933 Act defines the terms "offer," "sale," and "sell" very broadly and includes substantially all attempts to dispose of securities.

In some cases, the SEC has found that a "sale" has taken place, even though the recipients surrendered absolutely nothing of tangible value. In Capital General Corp.,¹ the company made distributions of its shares to public recipients for no...