In re Texas Glass Manufacturing Corp.
Securities and Exchange Commission
38 S.E.C. 630 (1958)
- Written by Steven Pacht, JD
Facts
Texas Glass Manufacturing Corp. (Texas Glass) (defendant) filed a registration statement for a public offering of common stock. The prospectus included a chart describing anticipated costs for plant construction, but the chart did not disclose that (1) the contracts it referenced had not yet been signed, (2) the listed costs did not include interest, and (3) interest rates on deferred contracts had not yet been determined. The chart also allocated money to two items without explaining what the items represented. Nor did the prospectus explain how the offering’s proceeds would be distributed or what Texas Glass would do if the offering did not raise enough money. In addition, the prospectus stated that Texas Glass previously sold certain unregistered stock and options pursuant to a claimed exemption from the registration requirement, without disclosing that Texas Glass had not been entitled to use the claimed exemption in connection with those sales. The Securities and Exchange Commission (SEC) (plaintiff) initiated a stop-order proceeding against the offering.
Rule of Law
Issue
Holding and Reasoning ()
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