May 09, 2014
America's First Prospectus
Posted by David Zaring

Over at the DC Bar, SEC staffer James Lopez took a look at how the first IPO prospectus in the United States measured up to the requirements imposed by the commision today.  That would have been in 1791, for the Society for Establishing Useful Manufactures (SUM), which was going to build a manufacturing district.  A taste:

today’s IPO prospectus includes a discussion of the most significant factors that make the offering speculative or risky, pursuant to Item 503 of Reg. S–K. The SUM prospectus’ third paragraph consists of the following sentence: “The dearness of labour and the want of Capital are the two great objections to the success of manufactures in the United States.” Well, then, that’s clear and concise. In a few additional paragraphs the SUM prospectus focuses on each of these challenges in detail. For example, as for needing labor it states that “emigrants may be engaged on reasonable terms in countries where labour is cheap, and brought over to the United States,” and that “women and even children in the populous parts of the Country may be rendered auxiliary to undertakings of this nature.”

HT: Corp Counsel.

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