Category: Uncategorized

Insider Trading

Insider Trading

What You Need to Know

When an insider uses non-public knowledge to make a profit from their investments, this is known as insider trading. Insider trading is an illegal practice that can have serious consequences for those who participate in it. This information may include upcoming mergers or acquisitions, private financial data, and other important details.

This type of behavior violates both federal and state laws and carries stiff penalties, including large fines and possible jail time. That’s why it’s essential to avoid this kind of behavior. Everyone should have the same opportunity to buy and sell stocks without having to worry about getting taken advantage of.

Before investing, you should always do your research and find out all you can about the company you’re considering. If you come across any news or rumors that could be related to insider trading, it’s important to stay away from these companies until more information is available. You don’t want to be associated with any potential illegality, so even if you think you’re making an informed decision, it’s best to err on the side of caution.

Remember, even though insider trading can seem like an easy way to make money quickly, it isn’t worth risking breaking the law—or worse—losing your hard-earned savings. Do your due diligence and research the company you’re considering.

Identify and Avoid

To start, you should be aware of what “insider information” means. This is any material information not available to the public that could affect a company’s stock price if released. Examples include pending mergers, sales results, or new products. If you have access to this type of information, don’t trade on it! Even passing it along to someone else can get you into trouble.

Another way to stay clear of insider trading is by avoiding “tipping.” That’s when an insider passes the information on to another person who then uses it for their benefit. Again, even though you might not personally make money from it, tipping off others is still illegal.

Finally, pay attention to any unusual activity around trades. Knowing how to spot potential insider trading can help keep you out of trouble.

Why Insider Trading Can Be So Costly

Insider trading is an illegal practice that puts the US stock market at risk and can have costly consequences. It occurs when someone with knowledge of a company’s private information, such as financial data or new products, takes advantage of this to make money in the stock market. This kind of activity gives those involved an unfair edge over other investors who don’t know the confidential details.

For example, if someone knew about a merger before it became public, they could purchase shares in the companies involved at a lower price and then benefit from the jump in stock prices once the news was announced. It’s also unethical since insiders are taking advantage of privileged information. By not playing fair, they’re essentially stealing from everyone else. This type of behavior can hurt other investors, as well as companies and the economy overall.

The problem with insider trading is that it creates an imbalance between ordinary investors and insiders who are privy to secret information. As a result, regular people end up paying more for stocks while those with insider info reap bigger profits. This can be costly not just financially but also because it undermines trust in the stock markets and erodes confidence in investing.

Legal Implications

Insider trading is the illegal act of buying or selling stocks based on insider information not available to the general public. It’s a serious crime in the United States, with heavy penalties if caught and convicted. If you are found guilty of this offense, it can mean stiff fines, jail time, and damage to your professional reputation. Understanding the consequences of engaging in such activities can help you avoid costly mistakes.

The punishment for breaking securities laws through insider trading depends on how much money was made and lost because of the activity. In some cases, an individual could face civil penalties up to three times the amount they profited from the trade. Criminal charges may be brought against someone who has engaged in insider trading as well, with a sentencing of up to 20 years in prison.

In addition to financial losses, being accused of insider trading can also have devastating effects on one’s personal life and career. Even though you might never be prosecuted, just the accusation alone can bring shame and humiliation that lasts long after the event passes. That’s why it’s important to stay informed about what constitutes insider trading so that you know what steps to take if you find yourself facing accusations.

The federal government views insider trading seriously and has put severe penalties in place to deter anyone from engaging in this unlawful behavior. Anyone convicted of insider trading may face hefty fines, jail time, and being barred from ever participating in the stock market again.

Banning Insider Trading in Congress Act

The Banning Insider Trading in Congress Act is an important piece of legislation that protects Americans from congressional representatives taking advantage of their position for financial gain. This act prevents congress members from using privileged information to benefit themselves financially through insider trading. This ensures the integrity of our government and safeguards us from any unethical behavior.

The act makes it illegal for anyone in a legislative body to use nonpublic information about potential investments for personal gain or profit. This keeps all citizens on equal footing when it comes to investing. Without this law, those with access to inside information could manipulate markets unfairly.

This act also holds elected officials accountable for their actions. Any violation would result in criminal penalties including fines and imprisonment. Such measures make sure that lawmakers are acting ethically and upholding their responsibility to serve their constituents.

Bypassing the Banning Insider Trading in Congress Act, we can rest assured that our leaders won’t abuse their positions to line their own pockets at the expense of the American public. We must remain vigilant and make sure that legislators adhere to the standards set by this important law.

Get a Driver’s License in Arizona

Get a Driver’s License in Arizona

Before you can legally operate a vehicle in Arizona, you must get a driver’s license. The Arizona Department of Transportation (DOT) is responsible for issuing licenses to eligible residents. The department has regulations that guide how a person operates a vehicle on the state roads, and any violation of these regulations will attract penalties, including the loss of license. 

The use of a driver’s license is to certify that the holder is competent with the laws of the state roads and can effectively operate a vehicle. 

Types and Classes of Driver’s License in Arizona

Arizona State issues driver’s licenses classified into different classes and types. The type of license an individual can request depends on the type of vehicle or the use for the license. The classes of driver’s license in Arizona are:

Motorcycle License (Class M)

If you have a motorcycle or a similar vehicle in Arizona, you will need to get a  motorcycle license to operate it. To get a class M license, residents have to be aged 16 or older. 

Operator License (Class D)

Anyone that is 18 years of age and older can possess an operator license to legally operate a vehicle in Arizona. It excludes vehicles that require a motorcycle or commercial license to drive. 

Graduated Driver License (Class G)

Individuals who are at least 16 years of age but not yet 18 can apply for a graduated driver’s license they can use to operate a vehicle. However, this class of license has certain restrictions imposed while operating the vehicle.

Commercial Driver’s License (CDL)

A commercial driver’s license can be a class A, class B, or class C license. It authorizes the operation of vehicles that can take up 16 passengers (including the operator), heavyweight vehicles that weigh 26,001 pounds or gross vehicle weight rating, and vehicles that must carry a sign showing they are conveying hazardous material. 

Drivers that operate vehicles towing a trailer weighing 10,001 pounds (GVWR) or heavier must also get a commercial driver’s license. 

The main types of driver’s license in Arizona include:

Arizona Travel ID

Under the federal REAL ID Act, the Travel ID document can serve as either an identity document or a driver’s license. It is among the acceptable forms of identification card that are valid to tender at the airport security checkpoints for travels within the U.S.

Instruction Permit

An instruction permit applies to only minors who are at least aged 15 years and six months, allowing them to operate a motor vehicle or motorcycle. However, such drivers cannot enjoy driving privileges unless a licensed driver, aged 21 and above, accompanies them in the passenger seat. An instruction permit is only valid for a year. 

Operating with a motorcycle restricts the driver from using the state’s freeways or highways. The timeframe for using the motorcycle must fall before sunset and after sunrise. Riders can also not ply badly-lit areas that may prevent them from seeing vehicles or pedestrians. This type of instruction permit expires after seven months and can only be renewed once within two years. 

Individuals older than 18 years old can apply for a commercial driver’s license permit, which is valid for six months. 

An adult must consent before the Department of Transportation can issue an instruction permit. 

Getting a Driver’s License in Arizona

The Arizona DOT has the following requirements for individuals that want to get a driver’s license:

  • Fill in the application form
  • Provide a social security number proof 
  • Provision of any two of the following documents showing:
  1. Individual’s identity and date of birth
  2. Proof of living in Arizona
  3. For persons that changed names, legal proof of your name change is required
  4. Immigration document showing legal residency non-U.S residents
  • Driver’s license of another state (if applicable)

Applicant must also pay the licensing (Class D) fee, scheduled by their age:

  • Applicants aged 16 to 39 years of age will pay $25 
  • Applicants aged 40 to 44 years of age will pay $20
  • Applicants aged 45 to 49 years of age will pay $15
  • Applicants aged at least 50 years old will pay $10
  • An additional fee of $7 is billed for an instructional permit

Individuals can apply for their Arizona driver’s license by filling the form and submitting it at any MVD office or authorized third-party license providers. However, they must make an appointment before visiting the office. Applicants can also fill the form online, and the information entered will be available at the MVD office. 

The DOT requires applicants to pass a written knowledge test (based on the Commercial Driver License Manual) if they lack an instruction permit before the application. Applicants must score at least 80% to pass the test. The test is conducted at the MVD offices and any authorized third-party office. 

The MVD also conducts a skill/road test. Applicants must perform the test with the class of 

vehicle they intend to use the license with. The Commercial Driver License Office locations conduct this test, or applicants can check any MVD-certified testers authorized to conduct the test.

Upon passing the test, applicants can pay the licensing fee and receive a temporary card. The DOT office will mail the driver’s license within 15 days. The payment process is available through cash, credit card, check, money order (address it to the Motor Vehicle Division).

Telephone Solicitation and Fraud in Arizona

Telephone Solicitation and Fraud in Arizona

Telephone solicitation, also known as telemarketing, is the practice of making unsolicited calls to individuals whom telemarketers intend to pitch their products and services. Telemarketing began in the late 1980s and was a way for businesses and individuals to gain customers cheaply without going house-to-house. However, individuals with nefarious intents quickly hijacked this practice and used it to defraud unsuspecting customers. 

Today, it is not uncommon for an Arizona resident to receive an unsolicited call from an unknown number, with the caller pitching them a fraudulent product or service. When residents reportedly receive an estimated 3 million unsolicited calls per day, the Attorney General’s Office swung into action. For one, the Office encourages residents not to answer unsolicited calls from unknown callers. In such cases, the call recipient may confirm the unknown caller’s name and location. Armed with this information, the recipient may call back. Otherwise, the Office urges Arizona residents to block such unknown numbers and register their numbers on the Do Not Call registry

Speaking of robocalls and unscrupulous telemarketers, in August 2019, the AG’s Office formed an arrowhead of state attorney-generals and phone companies bringing perpetrators to book. Because the coalition is cross-jurisdictional, the Attorney General’s Office can take legal action against in-state and out-of-state violators of Arizona’s telephone solicitation law. The most notable of these cases was the Do Not Call case against Adobe Carpet Cleaning, which resulted in a $1,000,000 civil penalty. There was also the case against Desert Valley Aire, which ended in a $340,000 civil penalty.

Arizona enacted its telephone solicitation law to protect consumer rights, especially as several businesses use underhanded tactics to defraud residents and artfully skirt the law. For one, the law requires companies that make telemarketing calls to inform prospective customers of their rights—both verbally and in writing.

Generally, customers have the right to cancel a purchase made after a telemarketing call within three days of receiving the product or service. Suppose a company fails to inform the customer of this right. Then, the customer may cancel the purchase at any time, even after the expiration of the three-day cancellation period. Either way, the company must process the refund for the cancellation immediately. If the company refuses to refund the customer’s money, the individual may file a consumer complaint with the Attorney General’s Office. In addition, the consumer may gather all necessary documentary proof of the transaction and initiate a chargeback with their financial institution.Note, the three-day cancellation policy and supporting law are not a catch-all. The telephone marketing law does not put legit businesses at a disadvantage of equally unscrupulous consumers who may seek to exploit the cancellation policy. The law applies only in specific circumstances such as the sale of credit services, phone pitching of business opportunities, and discounts. To comply with the telephone solicitation law, a business that makes cold calls must register with the Secretary of State’s Office and file a bond with the State Treasurer. Erring businesses are liable to civil penalties.

Community Property Laws and Distribution at Death

Community Property Laws and Distribution at Death

Community Property Basics in Arizona

Arizona is a Community Property state. All property acquired during marriage, except that is acquired by gift, devise or descent, is presumed to be Community Property.

Property acquired prior to marriage or after marriage by gift, devise or descent is Separate Property unless gifted to the community. If an item is Separate Property, a mere change in its form does not change its character as Separate Property unless it is gifted to the community. The burden of proving an item is Separate Property is on the spouse trying to claim it is Separate Property and it must be shown by clear and convincing evidence that it is Separate Property.

During marriage each spouse has sole management and control over their Separate Property and equal management and control over Community Property. Joinder of both spouses is required for community real property, guaranty, indemnity and suretyship.

Prospective spouses can modify the effect of Arizona’s community property laws by executing a prenuptial agreement.

Distribution at Death

When a spouse dies, that spouse’s Separate Property goes to the deceased’s estate and passes to whoever is named in will or through intestate succession.

The surviving spouse takes one-half of all Community Property and the other half goes to the deceased’s estate and passes to whoever is named in will or through intestate succession. If in a will the deceased devises more than what they have a right to (i.e. devises more than one-half of the Community Property), the surviving spouse can elect to take one-half of the Community Property or whatever is devised in the will.

Joint tenancy property goes to the surviving spouse outside of probate.


See:

A.R.S. 25-211 Property acquired during marriage as community property; exceptions; effect of service of a petition

A.R.S. 25-213 Separate property

A.R.S. 25-214 Management and control

A.R.S. 25-215 Liability of community property and separate property for community and separate debts

A.R.S. 25-217 Ownership of property acquired after moving into state

Business Organization Types

Business Organization Types

Choose the Best Form for Your Arizona Business

The following issues are likely to be of concern when choosing the best form of organization for your Arizona business: (1) formation and formalities (2) liabilities of owners to third parties (3) management and control (4) liquidity (5) dissolution and (6) taxation.

Corporations: (1) formation and formalities: must file articles of incorporation and observe ongoing formalities (2) liabilities of owners to 3rd parties: no liability (3) management and control: no direct control – delegate to Board of Directors (4) liquidity: shares easy to transfer (5) dissolution: unlimited life (6) taxation: double taxation except for S-Corp. (up to 75 owners, 1 class of stock, only U.S. citizens)

Partnerships: (1) formation and formalities: none for general partnership, modest for limited partnership (2) liabilities of owners to 3rd parties: general partners personally liable unless a registered Limited Liability Partnership (LLP) (3) management and control: general partners have control rights (4) liquidity: limit on transferability, general interest is illiquid (5) dissolution: limited life (6) taxation: pass-through taxation

Limited liability companies (LLC): (1) formation and formalities: must file articles of organization and operating agreement (2) liabilities of owners to 3rd parties: members have same limited liability as shareholders (3) management and control: members can manage or may delegate management power to team of managers (4) liquidity: members may transfer their interest only through the unanimous consent of all members or through consent described in the articles of organization (5) dissolution: must be some event of dissolution specified in articles or membership agreement (6) taxation: pass-through

For many small businesses, LLC is best choice because although they have limited liquidity and limited life, they have limited formalities, limited liability, some control and pass-through taxation.

Create Power of Attorney

Create Power of Attorney

A durable power of attorney is a written instrument by which a principal designates another person as the principal’s agent.

An adult, known as the principal, may designate another adult, known as the agent, to make financial decisions on the principal’s behalf by executing a written power of attorney that satisfies all of the following requirements:

1. Contains language that clearly indicates that the principal intends to create a power of attorney and clearly identifies the agent.

2. Is signed or marked by the principal or signed in the principal’s name by some other individual in the principal’s conscious presence and at the principal’s direction.

3. Is witnessed by a person other than the agent, the agent’s spouse, the agent’s children or the notary public.

4. Is executed and attested by its acknowledgment by the principal and by an affidavit of the witness before notary public and evidenced by the notary public’s certificate, under official seal, in substantially the following form:

I, __________, the principal, sign my name to this power of attorney this _____ day of __________ and, being first duly sworn, do declare to the undersigned authority that I sign and execute this instrument as my power of attorney and that I sign it willingly, or willingly direct another to sign for me, that I execute it as my free and voluntary act for the purposes expressed in the power of attorney and that I am eighteen years of age or older, of sound mind and under no constraint or undue influence.

______________________
Principal

I, __________, the witness, sign my name to the foregoing power of attorney being first duly sworn and do declare to the undersigned authority that the principal signs and executes this instrument as his/her power of attorney and that he/she signs it willingly, or willingly directs another to sign for him/her, and that I, in the presence and hearing of the principal, sign this power of attorney as witness to the principal’s signing and that to the best of my knowledge the principal is eighteen years of age or older, of sound mind and under no constraint or undue influence.

____________________
Witness

The state of _________

County of ____________

Subscribed, sworn to and acknowledged before me by __________, the principal, and subscribed and sworn to before me by __________, witness, this _____ day of ____________.

(seal)

(signed) _____________________

______________________________
(notary public)

See:

A.R.S. 14-5501 Durable power of attorney; creation; validity

A.R.S. 14-5502 Effect of lapse of time, disability or incapacity

A.R.S. 14-5503 Relation of agent to court appointed fiduciary

A.R.S. 14-5504 Revocation; termination; effect; notice

A.R.S. 14-5505 Continuance of durable powers of attorney by affidavit

A.R.S. 14-5506 Powers of attorney; best interest; intimidation; deception; definitions

A.R.S. 14-5507 Applicability of article

Register a Trade Name in Arizona

Register a Trade Name in Arizona

What Is a Trade Name or DBA?

Arizona allows the registration of trade names. A trade name is a name under which an individual or entity operates its business. A trade name is often called a DBA, which stands for “doing business as.”

Trade names are registered with the Arizona Secretary of State.

What Is the Effect of Registering a Trade Name?

Registering a trade name is different from incorporating a business. Thus, if a person registers a trade name, they do not enjoy the benefits of incorporation.

There is no legal requirement in Arizona to register a trade name, however, registering a trade name gives the trade name holder the exclusive right to use the name in Arizona. Federal rights to a name is only gained by registering a trade mark or service mark with the United States Patent and Trademark Office.

Banks often require individuals who are operating a business as a sole proprietorship to have a registered trade name in order to have a bank account under the business name.

How Do I Register a Trade Name?

First, you need to see if your trade name can be registered. A trade name must be distinguishable on the record from any other name previously registered and on the record with the Secretary of State. To see if your proposed name is already taken, check Arizona’s trade name database. Your trade name cannot be too similar to a trade name that is already registered. Also, your trade name cannot contain corporate designations such as “Inc.”, “LLC” or “Corp.”

Once you have verified that your trade name can be registered, download and fill out the trade name application form. The form must be notarized if you are filing by mail.

Mail the notarized form along with a check for the $10 filing fee to:

Secretary of State Ken Bennett / Trade Name Division

1700 West Washington 7th Fl.

Phoenix, Arizona 85007

See:

Trade Name and Handbook

Form an Arizona LLC

Form an Arizona LLC

How Do I Form an LLC in Arizona?

It is important to chose the best form of organization for your Arizona company. There are important differences between Corporations and Limited Liability Companies (LLC’s). Read more here about the different business organization types.

Choose Your Name for Your LLC

The name you chose for your LLC must meet all the requirements of A.R.S. 29-602. Among other requirements, your LLC name must contain the words “limited liability company” or “limited company” or the abbreviations “L.L.C.”, “L.C.”, “LLC” or “LC”, in uppercase or lowercase letters. Additionally, your LLC name must be distinguishable from the names of existing corporations and LLC’s.

To check if your LLC name has already been taken, check the Arizona Corporation’s database here.

Prepare and File the Articles of Organization

Once you have chose an acceptable name for your LCC, you can prepare and file the Articles of Organization with the Arizona Corporation Commission (ACC).

The ACC form for LLC Articles of Organization can be found here. You must also fill out a cover sheet, which can be found here. Send the Articles of Organization, the cover sheet and the required filing fee of $50 to the ACC. Make checks payable to the ARIZONA CORPORATION COMMISSION.

Publish the Articles of Organization

Within sixty 60 days after the ACC has approved your filing, you must publish the Articles of Organization in a newspaper of general circulation in the county of the known place of business in Arizona, for three (3) consecutive publications. Note: Do not publish your Articles of Organization until the ACC approves your filing.

Список разрешенных газет в каждом округе будет сопровождать письмо об одобрении и размещен на веб-сайте ACC  здесь . Ваш LCC может быть ликвидирован, если он не будет опубликован. Подача аффидевита публикации не требуется.

See:

ACC Corporate Filing FAQ

ACC Website

Create a Will

Create a Will

What Is a Will?

A will is a written document which directs how a person’s property should be disposed after their death.

A person who creates a will is called a testator.

What Are the Requirements for a Valid Will?

1) It must be made by someone who is eighteen years of age or older and who is of sound mind.

2) The testator must intend that the document be their will.

3) It must be in writing.

4) It must be signed by the testator or in the testator’s name by some other individual in the testator’s conscious presence and by the testator’s direction.

5) It must be signed by at least two people, each of whom signed within a reasonable time after that person witnessed either the signing of the will or the testator’s acknowledgment of that signature or acknowledgment of the will.

There is an exception to the witness requirement: if the signature and the material provisions are in the handwriting of the testator, it is a valid will whether or not it is witnessed. A will that is handwritten is called a holographic will.

What Happens to a Person’s Property if They Die Without a Valid Will?

If a person dies without a valid will, their property is disposed of according to Arizona’s default rules of intestate succession. Additionally, any property that is not disposed of in a valid will is also subject to intestate succession.

See:

A.R.S. Title 14 – Trusts, Estates and Protective Proceedings