Definition
The principal anti-fraud provisions applicable to tender offers are:
- §14(e) — prohibits untrue statements of material fact, material omissions, and manipulative or deceptive practices in connection with tender offers
- Rule 10b-5 — the general anti-fraud rule under §10(b) of the Exchange Act
- Rule 14e-3 — special prohibition on trading on material non-public information about pending tender offers
- Rule 14e-8 — prohibits announcing a tender offer without the present intent or means to make it
Why it matters
These provisions are the source of most tender-offer litigation. Plaintiffs (and the SEC) use §14(e) to challenge alleged misstatements in the Schedule TO, omissions from the Schedule 14D-9, and selective disclosure to favored holders.
Rule 14e-3 specifically
Insiders trading on material non-public tender-offer information face liability even without breaching a fiduciary duty — a stricter standard than general 10b-5 insider-trading law.