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Chapter 19
Business Law
| Term | Definition |
|---|---|
| Securities | An instrument that evidences the holder's ownership rights in a firm, the holder's creditor relationship with a firm or government, or the holder's other rights. |
| Investment Contract | A legal document between two parties where on eparty invests money with the internet receiving a return. |
| Prospectus | A formal written docuemnt that accompanies a new offering of a coporate security, meant to provide infromation to pontetnial buyers of that security. |
| Free-Writing Prospectus | A written communication regarding securities being publicly offered siddeminated by the issue during the waiting period of an initial public offering (IPO) that discloses in fromation that would no tbe included in the registration statement. |
| Accredited Investor | An individual with gross income exceeding $200,000 in each of the two most recent years in joint income wiht a spouse or partner exceeding $300,000 for those years and a reasonable expectaion of the same income level in the current year. |
| Investment Company | A company that issues securities to investors and does any of the following: *Holds itself out as engaging primarity in the business of investing, reinvesting, or trading securities. |
| Mutual Fund | An entity registered and run by an investment company or investment bank. |
| SEC Rule 10b-5 | States that it is illegal for any person to defraud or deceive someone, including through the misrepresentation of material information, with respect to the sale or purchase of a security. |
| Insider Trading | The trading of a company's securities by individuals with access to confidential or material non-public infromation about the company. |
| Tipee | A securities law term used to refer to an individual who acquired material non-public information from some person in a fiduciary relationship with the company to which that informaiton pertains. |
| Short-Swing Profits | Regulation that requires company insiders to return any porfits made from the purchase and sale of company stock if both transactions occur within a six-month period. |
| Corporate Governance | A system of rules, practices and procedures that guide, control and govern a company. It provides structure for determining the methods used to achieve corporate goals and monitor performance. |
| Stock Option | The right to purchase stock in the future at a price set at the time the option is granted. |
Created by:
merazl
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