U.S and Trans-Border Securities Regulation

Session 6 – Resale of Securities
Study Problem 6.1
Beantown Biosystems raises $100 million by selling 5 million shares
of common stock at $20 per share in an underwritten initial public
offering (“IPO”) covered by an effective registration statement.
Professor Pennypincher, who has no relationship to Biosystems or
any of its affiliates, purchases 1,000 shares of stock in the IPO
through her trusted brokerage firm Merry Brothers, a brokerage firm
that was not part of the underwriting syndicate.
One month after the IPO, Biosystems’s stock is trading at $30 per
share. Pennypincher’s accountant encourages her to sell one-third of
her Biosystems shares through Merry Brothers.
May Pennypincher do so without causing Biosystems to file with
the SEC a registration statement that registers that sale of
Pennypincher’s stock under §5 of the Securities Act?
(c) 2013 Michael K. Krebs
All Rights Reserved
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