Business Newsletters

Arbitration of Securities Disputes

Although persons may not be required to arbitrate rather than litigate their claims, they may by contract agree to arbitrate any claims that arise under the contract.

Qualification Examinations for Persons in the Securities Industry

Persons who wish to enter the securities industry to sell or trade securities must pass an initial examination in order to be eligible to register with a self-regulatory organization such as the New York or American Stock Exchanges or Nasdaq.

Exchange-Traded Funds

Exchange-traded funds are open-ended registered investment companies regulated by the Securities and Exchange Commission under the Investment Company Act of 1940. The Securities and Exchange Commission has exempted exchange-traded funds from regulatory requirements in order to allow secondary trading on national exchanges of shares in exchange-traded funds.

Directors' Duty of Care

The duty of care requires a director to make business decisions in the best interests of the corporation in good faith, with due diligence, and with the skill and judgment of an ordinary person under the circumstances. Claims for breach of the duty of care that involve a failure to act typically allege that directors did not adequately supervise corporate executives or key employees.

Directors' Ignorance of Corporate Affairs

To carry out fully their duties and responsibilities to shareholders and the corporation, directors must be reasonably familiar with the workings of the corporation and have a general knowledge of how the corporation conducts its business. Directors are not expected to have superior knowledge about all business and financial aspects of the corporation, but they are assumed to have competent knowledge of the duties they have taken on when named to the board.