Some Comments on the Pre-Clearance Procedure

摘要

In this article, we have sought to make the case that each publicly-traded company should have in place and enforce a pre-clearance procedure which is reasonably designed to prevent violations of the federal securities law by its officers, directors, and major shareholders in connection with transactions in the stock of the company. We have also tried to show that such a pre-clearance procedure, working with an effective due diligence procedure at the securities broker-dealer firm involved in the proposed transaction, will decrease the likelihood of the occurrence of any such violation. We hope that we have achieved these goals.