Dealing with the SEC is a headache. Some companies just stay private to avoid the paperwork. Public companies have to file all sorts of documents with the SEC.
The S-3 is one of the least odious filings a company makes. Touted as the "most simplified registration form" the SEC offers, it comes into play after a company has already fulfilled a number of requirements (and filed a bunch of other paperwork). It's used after IPOs, and for other offerings of common or preferred stock.
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Finance a la shmoop what is the SEC right well the SEC or
Securities Exchange Commission has nothing to do with a realtor getting 6% [Realtor receiving a cheque off a man]
Commission when they sell your house commission here is about committing to
do right by investors well why do we have a whole commission or army of [An army of men wearing suits and facepaint]
lawyers dedicated to the fair exchange of securities well because there was an
era brutally demonstrated in the 1920's when fast-talking sleazy wheelers and dealers
ripped off everyone from ma and pa kettle to aunt an uncle teapot yeah they would [Dealer ripping off people in the street]
prey upon the uneducated the uninformed the gullible the greedy painting stories
of great riches that the would-be investors could have if they just sold [Man telling a farmer to invest his land]
their twenty thousand acre farm and parted with ten grand to buy this
beautiful park that real estate developers wanted to turn into high-rise [Farmer receives a real-estate development]
condos but in fact many of those lands were actually swampland the only folks [Farmer holding a shovel in a swampland]
who might be moving in there were beavers deer flies and alligators and it
wasn't just real estate securities that were abused fake companies Lego bridge [Officer on stage waving baton]
building company bumper stickers R Us you know like that sprung up everywhere
with crazy promises that sounded plausible to those with barely a [Boy in a white vest beside a bumper sticker]
third-grade education but they were total scams the American public tired of
reading about uneducated investors losing all their money to fast talking [American man reading about investors]
sales people lobbied Congress to create the SEC in 1934 with its core pursuit [People protesting outside of congress]
being to regulate the buying and selling of securities in America yep pretty much
[Policeman blows his whistle] these were the investing police myriad laws and structures were put into place
mainly around full and fair disclosure of whatever security a money raising
company was selling that is if it really was swampland you had to disclose that [Man with an aligator for a head in a swampland]
it was swampland you couldn't claim it was something it wasn't using fancy
vocabulary that a normal ordinary person couldn't [Man confusing someone with fancy vocabulary]
understand like you couldn't you know polish a piece of crap and call it
marble the broader goal here was not to give Americans advice on what to buy and [American boy thinking about buying or selling]
sell but rather just to have full and fair disclosure of the facts so that
when a buyer did buy and got taken well at least then all the facts she needed [Woman meeting with an investor]
to make a rational and reasonable conclusion were right there in front of
her so hey anyone up for a game of marbles [Man throwing poo on the floor]
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