Securities Act of 1933 discussion


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Gould, Inc. is preparing for its initial public offering. Approximately one month before Gould plans to file its registration statement with the SEC, it sent a short letter to all of its existing customers (over 5,000 companies and individuals). The letter included:

A description of a revolutionary product Gould is developing that will perform much better than Gould’s current products. The notice indicates that Gould expects the new product to be highly successful and profitable to the company.

Information about Gould’s upcoming public offering, including the planned offering date, the number of shares to be sold, the amount of money to be raised and the basic terms of the common stock to be sold. The letter stated that the funds raised in the offering will allow Gould to have the new product available for sale within six months after completion of the offering.

Explain whether Gould violated the Securities Act of 1933 by sending this letter