Sections 9(a)(1) and 9(a)(2) of the Securities Exchange Act of 1934: An Analysis of Two Important Anti-Manipulative Provisions under the Federal Securities Laws
![handle is hein.journals/illlr85 and id is 716 raw text is: Copyright 1991 by Lewis D. Lowenfels Printed in US.A.
VoL 85, No. 3
SECTIONS 9(a)(1) AND 9(a)(2) OF THE
SECURITIES EXCHANGE ACT OF 1934:
AN ANALYSIS OF TWO IMPORTANT
ANTI-MANIPULATIVE
PROVISIONS UNDER THE FEDERAL
SECURITIES LAWS*
Lewis D. Lowenfels**
INTRODUCTION
The federal securities laws contain a number of provisions designed
to prohibit manipulative activity in the securities markets of the United
States. Section 9 of the Securities Exchange Act of 1934 (1934 Act)
addresses manipulative activity on national securities exchanges.' Sec-
tions 15(c)(1) and 15(c)(2) of the 1934 Act focus upon manipulation by
brokers or dealers in the over-the-counter markets.2 Section 14(e) of the
1934 Act prohibits manipulative activity in connection with tender of-
fers.3 And these statutory provisions with a relatively specific focus are
set against the backdrop of the broad anti-fraud provisions of the federal
securities laws-Section 10(b) of the 1934 Act4 and the comparatively
less utilized Section 17(a) of the Securities Act of 1933 (1933 Act)5-
which apply to manipulations perpetrated by any person through any
activity on national securities exchanges as well as in the over-the-
counter markets.
In this Article we will address Section 9 of the 1934 Act and focus
upon Sections 9(a)(1) and 9(a)(2)-two of the important anti-manipula-
tive provisions of the federal securities laws.
Section 9(a)(1)
Section 9(a)(1) of the 1934 Act prohibits wash sales and
matched orders effected [f]or the purpose of creating a false or mis-
* Copyright 1991 by Lewis D. Lowenfels.
** A.B. 1957, LL.B. 1961, Harvard University. Partner, Tolins & Lowenfels, New York, New
York. Adjunct Professor of Law, Seton Hall University School of Law.
1 Section 9, 15 U.S.C. § 78i (1988).
2 Sections 15(c)(1)-(2), 15 U.S.C. § 78o(c)(1)-(2) (1989).
3 Section 14(e), 15 U.S.C. § 78n(e) (1988).
4 Section 10(b), 15 U.S.C. § 78j(b) (1988).
5 Section 17(a), 15 U.S.C. § 77q(a) (1988).](ViewImageLocal?handle=hein.journals/illlr85&div=37&collection=&method=preview&ext=.png&size=3)
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