56 Notre Dame Law. 755 (1980-1981)
Determining the Responsibilities of Underwriters Distributing Securities within an Integrated Disclosure System

handle is hein.journals/tndl56 and id is 757 raw text is: I. Investment Bankers

Determining the Responsibilities of Underwriters
Distributing Securities Within an Integrated
Disclosure System
Edward F Greene*
TABLE OF CONTENTS
I.  Introduction  ....................................................     756
II. The Role of Underwriters in the Securities Distribution Process..       761
III. The Effects of the Securities Act Upon Underwriters' Activities ..      764
A. Legislative Histogy of Section 11 ...............................   767
B.   Underwriters' Responsibility in the Courts ........................  770
1. In re The Richmond Corp.: Reasonable Investigation as a
D uty  ...................................................     770
2. Escot v. BarChris Construction Corp.: Determining
Reasonableness in Light of the Surrounding
Circum  stances  ..........................................    772
3. Feit v. Leasco Data Processing Equipment Corp.: Varying the
Degree of Investigation Based Upon the Accessibility of
Inform ation  .............................................    775
4. Sanders v. John Nuveen & Co.: The Relationship Between
Underwriters' Responsibilities Under Section 12(2) and
Section  11  ..............................................    778
IV. Integration of Disclosure Requirements of the Federal Securities
Laws and Evolution of the Disclosure Environment ..............        781
V. The Stock Offering Process Under the Integrated Disclosure
System   .........................................................     787
A.   The Effcts of Integration on the Ofering Process .................  787
B.   The Efects of Increased Competitiveness in the Underwriting of
Securities  O eings  ...........................................  791
VI. Should There Be More Definite Guidance for Underwriters? .....           794
A. Arguments Against Enunciation of a More Definite Standard of
Underwriters' Responsibilities ..................................  794
B. Arguments Favoring Formulation of More Definite Guidance for
Underwriters  .................................................   796
C.   The Commission-s Proposals to Eliminate Extraneous Considerations
* Member of the New York Bar; Director of the Division of Corporation Finance, Securities and
Exchange Commission. The Securities and Exchange Commission, as a matter of policy, disclaims respon-
sibility for articles by members of its staff. The views expressed herein are those of the author and do not
necessarily reflect the views of the Commission or its staff. The author would like to thank Mr. Gregory H.
Mathews, an attorney in the Division's Office of Disclosure Policy, for his invaluable assistance in the
research and writing of this article.

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