accredited investors
In the context of securities offerings, sophisticated investors, such as banks, insurance companies, investment companies, the issuer's executive officers and directors, and persons whose income or net worth exceeds certain limits.
bounty payment
A reward (payment) given to a person or persons who perform a certain service, such as informing legal authorities of illegal actions.
corporate governance
A set of policies or procedures affecting the way a corporation is directed or controlled.
free-writing prospectus
Any type of written, electronic, or graphic offer that describes the issuing corporation or its securities and includes a legend indicating that the investor can obtain the prospectus at the SEC's Web site.
insider trading
The purchase or sale of securities on the basis of information that has not been made available to the public.
investment company
A company that acts on behalf of many smaller shareholders/owners by buying a large portfolio of securities and professionally managing that portfolio.
investment contract
In securities law, a transaction in which a person invests in a common enterprise with the reasonable expectation that profits will be derived primarily from the efforts of others.
mutual fund
A specific type of investment company that continually buys or sells to investors shares of ownership in a portfolio.
Prospectus
A written document, required by securities laws, that describes the security being sold, the financial operations of the issuing corporation, and the investment or risk attaching to the security. It is designed to provide sufficient information to enable
red herring prospectus
A preliminary prospectus that can be distributed to potential investors after the registration statement (for a securities offering) has been filed with the Securities and Exchange Commission. The name derives from the red legend printed across the prospe
SEC Rule 10b-5
A rule of the Securities and Exchange Commission that makes it unlawful, in connection with the purchase or sale of any security, to make any untrue statement of a material fact or to omit a material fact if such omission causes the statement to be mislea
security
Generally, a stock certificate, bond, note, debenture, warrant, or other document or record evidencing an ownership interest in a corporation or a promise to repay a corporation's debt.
short-swing profits
Profits earned within six months of a trade. Section 12 of the 1934 Securities Exchange Act requires company insiders to return any profits made from the purchase and sale of company stock if both transactions occur within a six-month period.
stock options
An agreement that grants the owner the option to buy a given number of shares of stock, usually within a set time period.
tippee
A person who receives inside information.
tombstone ad
An advertisement, historically in a format resembling a tombstone, of a securities offering. The ad tells potential investors where and how they can obtain a prospectus.