U.S. Securities Regulation and the Use of the Internet in Registered Offerings

Abstract

This article raises the question of whether the United States should continue primarily to rely on its existing securities law framework, or whether it needs a radically different framework when dealing with Internet-related securities issues. With this basic question in mind, the authors explore how the SEC has handled the rise of the Internet, and whether there truly is a need for new rules, regulations, or even legislation. After describing the basic principles of U.S. securities regulation, the authors consider what the Internet/electronic media is, and to what it enables its users. The article then addresses certain aspects regarding how the electronic media has affected registered stock offerings, and how the SEC has been addressing this new use. The authors conclude with a look at how the SEC's Division of Enforcement approaches fraud and the Internet.