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Q: Canadian Company Press Releases - ( Answered 5 out of 5 stars,   0 Comments )
Subject: Canadian Company Press Releases -
Category: Business and Money > Finance
Asked by: geoffreysteven-ga
List Price: $50.00
Posted: 11 Nov 2005 09:02 PST
Expires: 11 Dec 2005 09:02 PST
Question ID: 591915
Canadian public companies listed on CAnadian exchanges put a comment
at the bottom of their press releases stating that its for CAnadian
disctribution only. I have heard that this is because there is a US
law that allows US investors to sue a CAnadian company if the Canadian
companies newswire should be posted in the US - in the event that the
investment should decline in value. As a result, this prevents
Canadian listed companies posting to the US newswires and not getting
US exposure. IS this TRUE? Or just fiction?
Subject: Re: Canadian Company Press Releases -
Answered By: wonko-ga on 11 Nov 2005 11:09 PST
Rated:5 out of 5 stars
Canadian companies whose securities are not registered in the United
States are seeking to avoid any appearance of violating US securities
laws by adding statements indicating the press release is for
distribution only in Canada.  Many companies in other countries also
do this; I found examples of UK-based companies excluding distribution
to the US, Canada, and Japan from their press releases.




"The Securities Act generally prohibits an issuer (or anyone acting on
its behalf) from making an offer to sell its securities unless a
registration statement has been filed with the SEC. The SEC has an
expansive view of what constitutes an "offer," and has stated that
information, opinions or recommendations by a broker-dealer about
securities of an issuer proposing to register securities under the Act
may constitute an offer to sell such securities, particularly when the
broker-dealer is to participate in the distribution as an underwriter
or selling group member. Publishing such information may therefore
result in a violation of the Act."

"Releasing Research Reports -- What Can You Do?" By Paul, Hastings,
Janofsky & Walker LLP, FindLaw (1999)

"Cambridge Silicon Radio Announces Board Appointments" Cambridge
Silicon Radio(January 26,

"Securities Act of 1933
Often referred to as the "truth in securities" law, the Securities Act
of 1933 has two basic objectives:

require that investors receive financial and other significant
information concerning securities being offered for public sale; and

prohibit deceit, misrepresentations, and other fraud in the sale of securities." 

"Purpose of Registration
A primary means of accomplishing these goals is the disclosure of
important financial information through the registration of
securities. This information enables investors, not the government, to
make informed judgments about whether to purchase a company's
securities. While the SEC requires that the information provided be
accurate, it does not guarantee it. Investors who purchase securities
and suffer losses have important recovery rights if they can prove
that there was incomplete or inaccurate disclosure of important

"The Laws That Govern the Securities Industry" US SEC (February 11,

House of Representatives (September 24, 1996)

"The U.S. financial press, and foreign publications with a general
circulation in the United States, often provide news coverage of these
transactions, even if the transaction does not involve U.S. companies
and will not take place in the United States.  In addition, in some
foreign countries, companies offering securities, or soliciting
tenders of securities, commonly conduct press conferences, issue press
releases, and meet with members of the press when offering securities
or conducting a tender offer.  As contrasted with the traditional and
permitted offering process in the United States which does not freely
allow such activities to occur, these activities are not only
permitted by foreign regulatory regimes, but in fact often are an
integral part of the offering or tender offer process in some foreign

"Offshore Press Conferences, Meetings with Company Representatives
Conducted Offshore and Press Related Materials Released Offshore" US

"However, for offshore offerings of foreign companies, the SEC follows
'a two prong approach.'   The SEC approach is as follows:

'[First, the SEC is] ... making sure that there is a disclaimer of
some sort, sort of making sure that information, that the offerings is
not available to U.S. persons.  It is not, sort of, a check the box
type of release, that the mere existence of a disclaimer will do.  If
the content of the offering is clearly directed to U.S. persons,
comments on the tax consequences, some sense of how you can move money
from your U.S. account.  And so, there is the disclaimer, yet it does
require some thinking on the part of lawyers to make sure that this is
not really an offer that is directed into the United States.   And the
second part is that the issuer should engage in some policing
transaction, the policing of their offering, making sure that the
sales are not being made into the United States.  Looking at where
checks are coming from, sort of looking at where securities are being
delivered to. ...'"

"Can Securities Registration Survive the Internet?" Tech Law Journal
(November 13, 1998)

Search terms:  canada  listed  companies  press  release  united 
states  distribution; the  securities  act  offer; the  securities 
act  offer  foreign  companies; "Preliminary Note 7 to Regulation S";
"regulation s" "directed selling efforts"; "securities registration"
united states
geoffreysteven-ga rated this answer:5 out of 5 stars
Good, solid answer backed with facts and references.

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