U.S. Federal Securities Law Research Pathfinder
Table of Contents
b. Case Law – selected Supreme Court opinions
c. Securities Exchange Commission
i) SEC Rulemaking
ii) SEC no-action, interpretive, and exemptive letters
iii) SEC administrative proceedings
iv) Information for Investors – EDGAR
v) Self-Regulatory Organizations, “SROs”
c. Loose-leaf Services
a. Westlaw, Lexis, CCH
b. Other internet sources
Following the Great Depression and Stock Market Crash of 1929, Congress enacted a series of six securities laws between 1933 and 1940 that make up the foundation of today's federal securities laws. At the base of this foundation are the Securities Act of 1933 ("Securities Act" or " '33 Act") and the Securities Exchange Act of 1934 ("Exchange Act" or "'34 Act"). The Exchange Act, among other things, created the Securities and Exchange Commission ("SEC"), the federal agency responsible for administering the federal securities laws. The other statutes are the Public Utility Holding Company Act of 1935; the Trust Indenture Act of 1939; the Investment Company Act of 1940; and the Investment Advisors Act of 1940. The federal securities laws are also composed of two more recent acts: the Securities Investor Protection Act of 1970 (“SIPA”) and the Sarbanes-Oxley Act of 2002 (“SOX”). The U.S. federal securities laws consist of these eight statutes. The securities researcher must always keep in mind the state laws as well.
Because of the dual nature of federalism, each state in the U.S. has enacted its own set of securities laws, many of which predated the ’33 Act. These laws are generally known as “Blue Sky” laws. One of the best known examples of a Blue Sky law is New York State’s Martin Act. While this pathfinder deals only with federal laws, there are other sources readily available for researching state Blue Sky laws such as “The Blue Sky Reporter,” a loose-leaf service by CCH.
The SEC is responsible for administering the nation’s securities laws and it carries out its duties by promulgating federal regulations. It does so by issuing regulations in the CFR and by issuing interpretative releases and so-called “no-action” letters, which are specific responses to issuer inquiries concerning matters unique to a particular circumstance but which may provide significant guidance to others who may contemplate similar situations. These interpretive releases and no-action letters comprise an important part of the SEC body of regulatory guidance and are available to the public.
The federal securities laws have been subject to extensive interpretation by the courts and by the SEC itself. In addition from time to time Congress has amended the body of securities laws in response to current developments. The latest example of this was the passage of the Sarbanes-Oxley Act of 2002, which Congress passed in response to the bankruptcy of Enron Corporation.
The SEC also has advisory functions in corporate reorganizations under the Bankruptcy Reform Act of 1978. Apart from the SEC, the Federal Reserve Bank also has responsibility in administering parts of the securities laws, although its role is much less than that of the SEC.
This pathfinder also provides secondary source material and internet links regarding securities litigation, specifically arbitration and class action securities lawsuits. You will find these under "Other Internet Sites."
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Securities Act of 1933 The ’33 Act, the first of the series of federal laws was enacted to protect investors by requiring issuer disclosure of pertinent facts in the offer and sale of securities to the public. The principal means of disclosure is the registration statement and prospectus. All issuances of securities to the public in the United States must be registered unless specifically exempted from registration by a specific provision of the federal securities law. The ’33 Act also prohibits fraudulent and manipulative conduct in the offer and sale of securities and imposes civil and criminal liability for violations of the Act’s prospectus, registration, and other requirements.
The ’33 Act is codified in 15 U.S.C. §§ 77a et seq.
Securities Exchange Act of 1934 The ’34 Act regulates the trading of outstanding securities, including those traded on stock exchanges as well as in the over-the-counter (“OTC”) markets. While the ’33 Act governs the primary distribution of securities to the public, the ’34 Act governs trading on the secondary markets.
The ’34 Act mandates periodic reporting by public companies to follow up on disclosures made in the registration statements and prospectuses. In addition, the ’34 Act also requires certain disclosures in connection with proxy solicitations and tender offers. The ’34 Act also imposes additional reporting requirements by company insiders and significant shareholders who trade in the company’s shares.
The ’34 Act regulates various entities, professionals, and other participants in the securities industry, notably brokers and dealers, national securities exchanges, associations of brokers and dealers, transfer agents and government securities brokers and dealers. Subject to the Municipal Securities Rulemaking Board, the regulatory scope of the ’34 Act includes municipal securities dealers. The ’34 Act established the SEC and gave it authority to administer all federal securities laws.
The ’34 Act, like the ’33 Act imposes civil and criminal liability for violations of its provisions. Similar to the ’33 Act, the ’34 Act also prohibits manipulative and fraudulent conduct in the trading, reporting and record keeping of public companies. Importantly, the antifraud provisions, of which Section 10(b) is prominent, provides for a private right of action. Section 10(b) and its Rule 10(b)-5 serves as the basis of most private securities litigation.
The Exchange Act of 1934 is codified in 15 U.S.C. §§ 78a et seq.
Public Utility Holding Company Act of 1935 This act regulates public utility holding companies. Public utility holding companies are defined in the Act as entities that own, control, or hold ten per cent or more of the outstanding voting securities of a public utility company or of a company that is itself a holding company.
The Public Utility Holding Company Act is codified in 15 U.S.C. §§ 79 et seq.
Trust Indenture Act of 1939 This act is designed to protect investors of debt securities. Debt securities offered for sale to the public are required by this Act to provide a trust “indenture” that complies to the standards and safeguards of the Act. Generally, the Act provides for independent trustees on issuance of public debt securities. The trustee’s function is to protect and enforce investor rights.
The Trust Indenture Act of 1939 is codified in 15 U.S.C. §§ 77aaa et seq.
Investment Company Act of 1940 This act regulates mutual funds and other investment companies. This is a complex statute and works in tandem with the Securities Act in governing the issuance of fund prospectuses and other disclosure requirements by mutual funds. The Investment Company Act of 1940 governs the registration, sales and marketing materials, reports, and directors and officers of mutual funds and investment companies.
The Investment Company Act of 1940 is codified in 15 U.S.C. §§ 80a-1 et seq.
Investment Advisers Act of 1940 This act regulates investment advisers, which is defined in the act as any person who, for compensation, is in the business of advising others with respect to securities transactions or directly or indirectly through writings and publications issues opinions as to the value of securities. The act provides for, among other things, mandatory registration of investment advisers and prohibits certain fraudulent practices and certain specified transactions. The act only applies to investment advisors who manage $25 million or more in investor assets or who advise a mutual fund.
The Investment Advisers Act of 1940 is codified in 15 U.S.C. §§ 80b-1 et seq.
Securities Investor Protection Act of 1970 This is the equivalent of deposit insurance for banks. The act operates to limit the loss to individual investors in the event of a broker-dealer’s failure or financial difficulty. This act is generally considered part of the Exchange Act, although it is not expressly mentioned in the text of that act.
The Securities Investor Protection Act of 1970, P.L. 91-598 is codified within the Exchange Act and its provisions are generally found in 15 U.S.C. §§ 78aaa et seq.
Private Securities Litigation Reform Act of 1995 While this statute (“PSLRA”) is not part of the federal securities laws per se and does not involve SEC administration, it is a very important piece of legislation that addresses the pleading standards with private securities litigation, particularly regarding class action lawsuits (also commonly referred to as “strike suits”). The PSLRA, P.L. 104-67 is codified in part, in 15 U.S.C. §§ 77z-1, z-2 and 78u-4, u-5, and 78j-1.
Sarbanes-Oxley Act of 2002 SOX substantially amended the Exchange Act and other statutes and also created its own provisions apart from existing federal securities laws. The more prominent provision of the act is the creation of an independent Public Company Accounting Oversight Board, which is responsible for setting auditing standards and with oversight of public accounting firms. The act also provides for stricter standards of auditor independence, and includes provisions involving corporate governance, lawyer conduct, fraud, corporate disclosure, and more timely insider trading disclosure, as well as conflict of interest provisions involving securities analysts who publish their recommendations. The act also provides for more funding and increased enforcement authority for the SEC.
The separate provisions of SOX, P.L. 107-204, are codified in 15 U.S.C. §§ 7201 et seq.
United States Supreme Court Securities Law Cases. This is not meant to be a complete listing of important cases as there are also Circuit Court opinions that have been important in the case law as well as administrative rulings issued by the SEC. However, this is a cross section of influential Supreme Court cases that are also publicly available through the hyperlinks on each case, making them readily available for review.
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The SEC was created on June 6, 1934 with the promulgation of the Securities Exchange Act of 1934. It’s basic structure remains the same today as when it was created. The SEC is a non-partisan regulatory agency consisting of a Chairman and four Commissioners, not more than three Commissioners may be from the same political party. The SEC members are appointed by the President, with the advice and consent of the Senate. Each member’s term is staggered, with one expiring every June 5 of each year.
The SEC has only civil authority but depending on the circumstances it may refer cases to the Department of Justice for criminal prosecution. The SEC has the flexibility to impose not only injunctive relief, but it also has the ability to craft monetary fines in its own proceedings. Over the years, Congress has expanded the SEC’s powers by promulgating the Securities Enforcement Remedies Act of 1990 and the National Securities Markets Improvement Act in 1996.
The SEC has broad authority and responsibility for making and interpreting federal securities laws. It carries out its mandate in a number of different ways. The SEC’s work is primarily remedial not punitive. While the Commission has civil authority to enforce the federal securities laws, much of the work of the SEC is rulemaking, and providing guidance to issuers by issuing interpretive releases and no-action letters. No-action letters are specific responses to actual issuer inquiries where the SEC has informally indicated that if a transaction is carried out in the manner described in the no-action letter, the SEC staff would not (or would) recommend that any enforcement action be taken. Although it is not an official rule and the SEC is not bound by no-action letters, for practical purposes, because they are public, no-action letters provide significant comfort and guidance for practitioners.
The SEC News Digest The SEC News Digest provides daily information on recent Commission actions, including enforcement proceedings, rule filings, policy statements, and upcoming Commission meetings. This is an invaluable “current awareness” tool for practitioners and is available for free online. The News Digest is archived and contains a rolling two years of back-dated editions.
All the pertinent federal securities statutes authorize the SEC to adopt whatever rules and regulations may be necessary to carry out its statutory functions, although the language is different in each act.  Generally SEC rules become effective according to the provisions of the Federal Register Act and its regulations. The SEC regulations may be roughly divided into three general categories: 
1) There are substantive implementing rules, which are legislative and not merely interpretive in character. Some grant exemptions --- like Regulation D, which exempts certain offerings from registration under the ’33 Act.
2) There are adjective implementing rules that prescribe the form and detail in which statements and reports are to be prepared and filed and the attendant procedures.
3) There are interpretive or definitional rules under the five statutory provisions (in every statute except the Advisors Act) which authorize the SEC to define “accounting, technical, and trade terms.”
The only difference between SEC “rules” and “regulations,” are simply that “regulations” are a package of “rules” promulgated at the same time and deal with the same general topic covered by the regulation. So for example Regulation D contains a package of rules dealing with exemptions from registration under certain offerings within the ’33 Act.
The following are the links to the Rules and Regulations:
General Rules and Regulations Promulgated Under the Securities Act of 1933
General Rules and Regulations Promulgated Under the Securities Exchange Act of 1934
General Rules and Regulations, Trust Indenture Act of 1939
Division of Corporate Finance Dating back to only 2001, these letters address various subject categories under the Securities Act of 1933, the Exchange Act of 1934, and the Trust Indenture Act of 1939.
Division of Investment Management Dating back to January 1, 2001, these no-action letters deal with the Investment Company Act and the Investment Advisers Act.
Division of Market Regulation Dating back to January 1, 2002 [sic], this Division addresses issues involving broker-dealer regulations and conduct.
Office of the Chief Accountant Dating back to October 1998 these are staff letters to the industry dealing with accounting issues.
All formal administrative proceedings of the SEC follow its Rules of Practice which conform to the Administrative Procedures Act. These rules provide procedural “due process” to protect the rights and interests of participants to such proceedings. Included in these rules are provisions or adequate notice and sufficient specification of the issues which parties are expected to defend. The relevant division of the SEC may appear at such hearings and present evidence and cross-examine witnesses. In addition, interested parties may also intervene and participate to a limited extent. 
Hearings are conducted before an administrative law judge (ALJ), appointed by the SEC, but is independent of the interested SEC division or office. The findings of fact and conclusions of law by the ALJ may be appealed.
If the SEC reviews the initial ALJ decision, the parties and participants may file briefs and conduct oral argument. On the basis of its independent review of the record, the SEC will issue an opinion. SEC final opinions as well as initial opinions that may have precedential effect are printed and published. Persons or firms, by law, have the right to appeal these decisions to the appropriate U.S. Court of Appeals.
SEC Litigation Releases Litigation releases concerning civil lawsuits brought by the SEC in federal court. The SEC databases on the public website go back to September 28, 1995.
SEC Administrative Proceedings Notices and orders concerning institution or settlement of administrative proceedings. Release numbers prefixed with “33-no.” refer to the Securities Act of 1933; “34-no” refer to the Exchange Act of 1934; “IA-no” refer to Investment Advisors Act; “IC-no” refer to the Investment Company Act.
ALJ Decisions and Orders Opinions and orders issued by Administrative Law Judges in contested administrative proceedings.
SEC Opinions & Orders Opinions and orders issued by the SEC on appeal of initial administrative law judge decisions or disciplinary decisions issued by self-regulatory organizations such as the NYSE and NASD.
The primary source for financial disclosure of public companies today is the SEC’s electronic database: EDGAR. From this page, you can search the EDGAR database for company information, including real-time filings. Company filings are available from 1993 to date. Although many people are familiar with the most common reporting forms such as the “8-K,” for quarterly financial reports and the “10-K,” for annual financial reports, there are many other forms that public companies file with the SEC that are available on EDGAR. A handy reference on the SEC website is the “Form Types Used for Electronic Filings on EDGAR,” which explains the forms used.
The SEC provides an online tutorial on the use of EDGAR.
In addition EDGAR also archives company information from 1993 to the present.
Researching federal securities laws would be incomplete without a word about self-regulatory organizations, or “SROs.”
The Securities Exchange Act of 1934 prescribes a co-operative effort by the SEC and industry-sponsored groups, called self-regulatory organizations.  The Exchange Act provides for four types of SROs: the national securities exchanges, the national securities association, registered clearing agencies, and the Municipal Rulemaking Board (MSRB). The two most important of the SROs are the exchanges and the National Association of Securities Dealers (NASD).
The two most important national securities exchanges are the NYSE and NASDAQ. There is only one national securities association and that is the NASD. The NASD is the nation’s largest SRO. While the SEC is ultimately responsible, it has delegated a significant amount of rulemaking authority to the SROs in a host of subject areas, particularly with regard to day-to-day procedures for the functioning of the securities markets.
NASD Conduct and Marketplace
NASDAQ Marketplace Rules and Bylaws
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Louis Loss & Joel Seligman, Fundamentals of Securities Regulation, Fifth Ed., Aspen Publishers, © 2004. [hereinafter “Fundamentals”].
Fundamentals is a one-volume treatise. It is an abridgment of the 10-volum set Securities Regulation, by the same authors. The Fifth Edition of Fundamentals is current up to June 1, 2003 and includes the Sarbanes-Oxley Act, including the creation of the new Public Company Accounting Oversight Board and new § 15D, which addresses Securities Analysts and Research Reports.
The Sarbanes-Oxley Act has also led to sign cant amendments of the federal securities laws and regulations. The current edition of Fundamentals includes:
New Standards of Professional Conduct for Attorneys Appearing
and Practicing before the Commission in the Representation of an Issuer.
· New Regulations AC, G, and BTR.
· New SEC executive certification and audit committee standards.
· New SEC provisions concerning prohibitions on loans to directors and executive officers and codes of ethics.
· New federal statute of limitations for securities fraud claims.
· New federal criminal securities law provisions.
In addition to Sarbanes-Oxley developments, the Fifth Edition of Fundamentals also provides new materials on:
Conference of Commissioners on Uniform State Law (NCCUSL). In 2002, the
NCCUSL adopted a new version of the Uniform Securities Act, which in earlier
forms has been enacted by approximately 40 states.
· The Commission’s 2001 directors’ independence rules under the Investment Company Act of 1940.
· Significant amendment and interpretation of the SEC’s Management Discussion and Analysis mandatory disclosure item.
· The Commodity Futures Modernization Act of 2000, which legalized single stock futures. New SEC rules creating a structure for new security futures markets as well as significant changes in Securities Exchange Act margin requirements.
· New SEC integration Rule 155 under the Securities Act of 1933.
· New SEC exemption Rule 238 from the Securities Act of 1933 for standardized options.
· Nasdaq SuperMontage system.
· On-line brokerage developments and new broker-dealer record keeping requirements and amendments to Rule 10b-10, the confirmation rule.
· New York Attorney General, SEC, NYSE, and NASD global research analyst settlement and ensuing new SEC, NYSE, and NASD rules.
· The USA Patriot Act of 2001 with specific emphasis on broker-dealer and investment company anti-money laundering provisions.
· The new electronic Investment Advisor Registration Depository (IARD).
· New SEC insider trading Rules 10b5-1 and 10b5-2 and Regulation FD dealing with selective disclosure of material nonpublic information.
· New case and interpretative letter developments, including United States Supreme Court decisions Wharf Limited v. United International Holdings and SEC v. Zandford, as well as lower court development of the concept of primary violator under Rule 10b-5 in cases such as Enron Corp. Sec. Derivative & ERISA litigation (S.D. Tex. 2002) and significant case law interpretation of pleading standards and the lead counsel provision under the Private Securities Litigation Reform Act of 1995.
· New Regulation S-P providing privacy rules under the Gramm-Leach-Bliley Act.
Fundamentals of Securities Regulation Summary of Contents:
Chapter 1 Background of the SEC Statutes
Chapter 2 Federal Regulation of the Distribution of Securities
Chapter 3 Coverage of the Securities Act of 1933: Definitions and Exemptions
Chapter 4 Protective Committee Reform: The Trust Indenture Act of 1939 and SEC Functions under the Bankruptcy Code
Chapter 5 “Control” Concepts under the SEC Statutes
Chapter 6 Registration and Postregistration: Provisions of the 1934 Act
Chapter 7 Regulation of the Securities Markets
Chapter 8 Regulation of Brokers, Dealers, and Investment Advisors
Chapter 9 Fraud
Chapter 10 Manipulation
Chapter 11 Civil Liability
Chapter 12 Government Litigation
Chapter 13 SEC Administrative Law
Chapter 14 Conflict of Laws, Procedural Aspects, and “Globalization”
James D. Cox, Robert W. Hillman, & Donald C. Langevoort, Securities
Regulation: Cases and Materials, Third Edition, Aspen Publishers, New York,
Summary of Contents:
Chapter 1 The Legal and Institutional Framework of Securities Regulation
Chapter 2 Inquiries into the Materiality of Information
Chapter 3 The Definition of a Security
Chapter 4 The Public Offering
Chapter 5 Exempt Transactions
Chapter 6 Secondary Distributions
Chapter 7 Recapitalizations, Reorganizations, and Acquisitions
Chapter 8 Exempt Securities
Chapter 9 Liability Under the Securities Act
Chapter 10 The Securities Exchange Act of 1934: Markets and Information
Chapter 11 Fraud in Connection with the Purchase or Sale of a Security
Chapter 12 The Enforcement of the Securities Laws
Chapter 13 The Regulation of Insider Trading
Chapter 14 Shareholder Voting and Going-Private Transactions
Chapter 15 Corporate Takeovers
Chapter 16 Regulation of the Securities Markets and Broker-Dealers
Chapter 17 The Investment Advisers and Investment Company Acts of 1940
Chapter 18 Transnational Fraud and the Reach of U.S. Securities Laws
Thomas Lee Hazen, The Law of Securities Regulation, Fourth Edition, West Group © 2002. This Hornbook is aimed primarily at law students and is a substantial abridgement of Hazen’s four-volume Treatise on the Law of Securities Regulation. The fourth edition contains developments through June 2001. Appendix E to the Practitioner’s Edition provides an overview of researching securities law through Westlaw. The Practitioner’s Edition is supplemented annually.
CCH Federal Securities Law Reporter
Vol. 1 Securities Act of 1933 (Issuing securities); Topical Index; General Guide
Vol. 2 Securities Act; Securities Act Forms; Securities Exchange Act of 1934 (Securities Trading)
Vol. 3 Exchange Act; O-T-C markets; Proxies
Vol. 4 Exchange Act; Insider Trading; Record keeping
Vol. 5 Exchange Act Forms; Public Utility Holding Companies; Trust Indenture Act and Forms; Investment Company Act
Vol. 6 Investment Company Act and Forms; Investment Advisors; Rules of Practice; Electronic Filings; Accounting Rules
Vol. 7 Disclosure Regulations S-B and S-contract; Financial Reporting; Finding Lists; Release Lists; Case Table
Current Volume --- No-action and Interpretive Letters, New SEC Rulings; New Court Decisions; Cumulative Index; Case Table for New Developments; Topical Index to New Developments
Westlaw: The FSEC-RELS database contains decisions and releases from the Securities and Exchange Commission. NOTE: The former FSEC-IR, FSEC-DEC and FSEC-DKT databases were combined into the new FSEC-RELS database. SEC releases from 1933 to the present are available in FSEC-RELS.
Coverage begins with different dates for each type of document (see below). Coverage includes new documents as they are released by the agencies.
S.E.C. Decisions and Reports
1 S.E.C. (1933)
1 S.E.C. Docket (1973)
SEC Releases: Securities Act of 1933
Release No. 33-1 (1933)
Securities Exchange Act of 1934
Release No. 34-1 (1934)
Public Utility Holding Co. Act of 1935
Release No. 35-1 (1935)
Trust Indentures Act of 1939
Release No. 39-1 (1940)
Investment Company Act of 1940
Release No. IC-1 (1940)
Investment Advisors Act of 1940
Release No. IA-1 (1940)
Lexis: Lexis devotes a section to securities under “Area of Law-By Topic.” Within this area, under “Multi-Source Groups,” is a link for SEC Cases, No Action Letters, Releases, Decisions, CFTC Orders and CFR. In addition the treatise by Loss & Seligman, Securities Regulation, 3rd ed. is available online (see supra print sources).
Tabs within the securities area include links to EDGAR filings, Federal and State securities cases, SROs, and company & financial information apart from SEC filings.
CCH Online: CCH, publishers of loose leaf services, including Federal Securities Law Reporter is available on Fordham Law’s Fullpac, Subscription Databases, CCH Business Research Network. In addition to federal securities laws, CCH online also includes the Exchanges and SROs, as well as Blue sky law reports, which covers state securities laws.
Securities Lawyer Deskbook This website is published by the University of Cincinnati College of Law. This website contains the text of the basic federal securities laws and regulations, and includes links to the principal SEC forms under those laws and regulations. This site is designed for use by legal practitioners, securities professionals, corporate officers, and academics.
Securities Arbitration Overview of the Securities Arbitration Process.
NASDR The NASD Dispute Resolution Site provides detailed information on securities arbitration and mediation, including the Code of Arbitration Procedure.
A widely accepted print source for securities arbitration is David E. Robbins, Securities Arbitration Procedure Manual, Matthew Bender & Co., Inc., c. 2003. This manual is available online on Lexis.
The single most important case in the area of securities arbitration is the United States Supreme Court opinion in Shearson/American Express, Inc. v. McMahon, 482 U.S. 220 (1987). This case established the enforceability of predispute arbitration clauses contained in virtually all account opening forms with broker-dealers, as well as most Wall Street employment contracts.
An excellent site for current awareness regarding class action securities litigation is Stanford Law School Securities Class Action Clearinghouse.
For company information for investors:
For general news, the Wall Street Journal is always useful but requires a subscription. It is available, however, on Westlaw.
Also on Fordham University Libraries > Business and Economics > Company & Industry Information. This leads to nine links that provide an excellent source of company financial information and analysis: Mergent Online; Business and Company Resource Center; Hoover’s Online; The Investext Group; Standard & Poor’s “NetAdvantage”; Value Line Investment Survey; Standard Industrial Classification (SIC) Search; Wall Street Research Net; and TheStreet.com.
Cornell University Law School's Legal Information Institute is always an excellent source of information on a wide range of legal topics.
And of course, http://engs.net.
 Louis Loss & Joel Seligman, Fundamentals of Securities Regulation, 1512, Fifth Ed., Aspen Publishers, © 2004. [hereinafter “Fundamentals”].
 See CCH-EXP, Federal Securities Law Reporter, Paragraph 315 et seq.
 Cox, Hillman,Langevoort, Securities Regulation: Cases and Materials, 16, Aspen Publishers, Inc., NY, c. 2001.