Term
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Definition
requires all reps when registering with a BD to disclose - 10 yr. employment history - felony or other securities related convictions
Person agrees to use arbitration to resolve disputes involving employer |
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Term
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Definition
| disclosure document that must be provided to a RR by the BD within 30 days or termination |
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Term
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Definition
| Any material event that would effect issuer's financial condition - must file within 4 days |
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Term
Form 3
Insider reporting and timeline |
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Definition
notification to SEC of achieving insider status (officer, director, owner of > 10% of voting securities)
- filed within 10 days |
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Term
Form 4
insider reporting and timeline |
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Definition
| notification to SEC of changes in position of insider - file within 2 days |
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Term
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Definition
| anyone who acquires more than 5% of an issuers equity - filed within 10 days - best source of info to find who are the more recent largest shareholders |
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Term
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Definition
| an alternative to 13d filed by an institutional investor such as a mutual fund that has no intention of of exhibiting control over the issuer |
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Term
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Definition
| (Quartley) filing for institutional investment managers exercising investment discretion over at least $100mm in equity securities |
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Term
Form 14A
Definative/Annual proxy |
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Definition
| proxy statements (used whenever a vote is required by shareholders) A definitive proxy is filed with the SEC on the same day they are sent to shareholders - must be sent to shareholders 20 days prior to meeting, 40 days prior through internet |
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Term
Form 14A
Preliminary/Special proxy |
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Definition
| sent to shareholders for M&A considerations, must be filed with with the sec for prior review - must be filed with SEC at least 10 days prior to date the definitive proxy is sent to shareholders |
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Term
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Definition
| registration used for most IPOs (long form) or issuers not able to file S-3 |
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Term
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Definition
short form registration, issuer must have been an SEC reporting company for at least 12 months and have $75mm public float
- used to issue common or prefferred equity |
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Term
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Definition
registration of securities used for merger
filed by acquirer when new securities are offered in connection with a merger and a proxy is required to be issued by the target
- target shareholders vote on approval of merger, acquirers shareholders vote on issuing shares to be used in the merger |
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Term
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Definition
delisting, no longer a reporting co.
filed when an issuer plans to go private
- shareholders will need to vote (proxy) and be provided with a summary term sheet, - reverse stock split or LBO |
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Term
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Definition
solicitation by the issuer or a 3rd party to purchase securities (usually at a premium) for a limited period of time
- filed in addition to a 13D by any person who makes a tender offer and becomes owner of more than 5% of company |
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Term
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Definition
- offers must be kept open for 20 biz days
- if terms amended, offer must remain open for at least 10 biz days from amendment
- NO OPEN MKT. TRANSACTIONS
- persons making TO cannot purchase same security or convertible in open mkt. during duration of offer
- shareholders can tender shares only if they are net long on shares
- options must be exercised |
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Term
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Definition
| filed by issuer and other owners of co. in regards to opinion of the TO |
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Term
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Definition
repurchases of securities by issuer
prevents issuer from manipulating either opening or price |
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Term
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Definition
- no purchases at the opining or end of day
- may not bid at price hgiher then last independent bid
- purchase volume may not exceed 25% of ADTV
- use only 1 BD |
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Term
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Definition
if MNPI if improperly discolsed the info must be must issued to the public
- within 24 hours
- created to protect retail investor |
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Term
| Trust indenture act of 1939 |
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Definition
requires a trustee appointed by issuer to act in bondholders best interest
- applies only to corporate debt |
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Term
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Definition
| BD may publish research reports when not acting as an underwriter |
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Term
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Definition
| BD may publish research reports when acting as underwriter for another class of security |
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Term
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Definition
if the issuer is a reporting company or WKSI, BD may publish reports when acting as underwriter for the underlying security
- provided it is only continuing coverage |
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Term
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Definition
disclosure and corporate governance rules for publicly traded companies
- internal control systems
- ceo and cfo sign off on statements |
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Term
Rule 14d-10
"best price rule" |
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Definition
in a tender offer, no preferential pricing, all shareholders must be offered the same price regardless of ownership
- exception is approved by compensation committee of the target |
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Term
HSR Act
Hart-Scott-Rodino Antitrust Act |
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Definition
Federal antitrust requires certain parties to file notice with the FTC before deal is completed
- cant be completed until 30 days after notice is filed, 15 for all cash deal |
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Term
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Definition
to facilitate communications and disclosures made by companies engaged in M&A transactions
- summary term sheets provide shareholders with all pertinet info about transaction |
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Term
| Securities Exempt from SEC registration |
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Definition
- US gov or agency securities
- municipal bonds
- short term debt (maturity < 270 days, CP)
- commercial bank securities
- securities from non profits |
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Term
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Definition
exempt transactions for small business
offering limited to $5mm over 12 months
- no more than $1.5mm from selling shareholders
offering circular must be filed with SEC
testing the waters is allowed |
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Term
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Definition
intra-state exemption when selling within 1 state
bulk of qualifying assets must be confined in one state |
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Term
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Definition
provides registration exemption to US firms issuing securities outside the US
Reg S securities may be resold to a US resident after 40 days for debt, 1 year for equities |
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Term
Private Placements
section 4(2) |
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Definition
| registration exemption for securities that DO NOT involve a public offering |
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Term
Private placement
section 4(5) |
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Definition
registration exemption for
- offering does not exceed $5mm
- no advertising or public solicitation
- offering only sold to accredited investors
- reg D exemption for limited $ of non-acc |
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Term
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Definition
registration exemption for securities sold directly to accredited investors
- (1mm net worth or single $2kk, joint $300k annual income) and a limited # of nonacc investors (35) |
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Term
Rule 504
reg D safe harbor |
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Definition
Deal size: up to $1mm
Non-Acc Inv. No limit |
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Term
Rule 505
reg D safe harbor |
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Definition
Deal size: up to $5mm
Non-Acc Inv. < 35
Acc Inv: No limit |
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Term
Rule 506
reg D safe harbor
and 506(c) |
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Definition
Deal size: unlimited
Non-Acc Inv. < 35
Acc Inv: No limit
506(c) issuer to use general solicitation if all investors are accredited |
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Term
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Definition
| registration exemption for securities sold to QIB's and allows QIB's to freely trade private placements among st themselves with no holding period |
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Term
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Definition
Permits sale of restricted and controls stock
- over an 90 day period can sell greater of i. 1% of outstanding shares ii. average weekkly trading volume over prior 4 wks |
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Term
Restricted stock
Rule 144 |
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Definition
unregistered i.e (Reg D, private placement, Reg S. or employee stock comp)
- has resale restrictions |
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Term
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Definition
| registered stock purchased and owned by corporate insiders e.i (officers, directors, > 10% shareholders) no holding period |
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Term
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Definition
| manipulation related to securities offerings |
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Term
Rule 101 (BD)
Rule 102 (Issuer)
reg M |
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Definition
limits activities that could manipulate the price of a security during a restricted period
- period begins 1-5 biz days prior to pricing and ends when the distribution is completed
- participants are prohibited from buying covered security during restricted period and must stop market making |
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Term
Rule 101, 102 BD Exception
Reg m |
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Definition
actively traded securities - public float at least $150 mm and ADTV $1mm
- munis, governement, non-convertible, high grade debt |
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Term
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Definition
passive market making permitted if at least 1 independent market maker
- PSMM may not bid higher then highest independent bid
- psmm dpl is higher of 30% of its ADTV or 200 shares |
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Term
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Definition
only form of price manipulation permitted by SEC
stabilizing bid may be lower of i. public offering ii. highest bid in principal mkt
- only 1 syndicate member may stabilize
- no limit to how long stabilzing bid can remain open |
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Term
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Definition
| restricts purchase of new issues if short position was executed w/ 5 biz days prior to pricing |
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Term
1. Pre registration
registration timeline |
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Definition
doc prep and due diligence
no communication w/ public unless 30 before exam, must not mention offering |
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Term
2. file registration
registration timeline |
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Definition
begin 20 day "cooling off" period
- no sales nor money accepted
- issuer distributes preliminary prospectus (red herring)
- obtain indications of interest (non-binding
- blue sky provisions, registration of securities by issuer |
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Term
3. Effective Date
registration timeline |
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Definition
final statutory prospectus (full disclosure document) must be delivered to all purchasers
- 25 days if exchanged listed IPO
- 40 days if non-listed registered 2ndary
- 90 days if non-listed IPO |
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Term
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Definition
refers to non-allowable communication during "cooling off" period related to new issuess
communications not deemed to be a prospectus |
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Term
| Gun jumping - safe harbor |
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Definition
1. factual business info (reporting, non reporting issuer safe harbor)
2. forward looking information (reporting issuer only) |
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Term
Well known seasoned issuer
WKSI |
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Definition
- eligible to use S-3 of F-3 plus
within 60 days of determining eligbility must pass either test
- public float $700mm in common equity
- $1bn in non convert debt prior 3 years
- may not be a shell co.
- |
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Term
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Definition
automatic shelf registration
- good for 3 years, not subject to SEC review
pay as you go filing fees only when securities pulled from shelf, not when registering |
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Term
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Definition
| eligible to use S-3, or F-3 for primary offerings but does not meet the other financial tests to be a WKSI |
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Term
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Definition
| not eligible to file S-3 or F-3 |
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Term
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Definition
the company has not yet filed reports (10k's) with SEC
Ex: co. filed an S-1 in process of an IPO |
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Term
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Definition
| any written communicaiton used in the sale or offer of securities made outside that registration, an offering that is not a statutory prospectus |
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Term
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Definition
WKSI - anytime
seasoned - after registration statement has been filed
unseasoned & non reporting - after registration statement has been filed and must be proceeded by a statutory prospectus
Ineligible issuer - not permitted |
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Term
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Definition
| A traditional long form prospectus |
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Term
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Definition
- limited liability for owners
- unlimited # of shareholders
- double taxation
- cannot pass through losses |
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Term
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Definition
- limited liability for owners
- no more than 100 shareholders
- not a viable option for an IPO
- corporation not a taxable entity, shareholders are taxed, pass through income and losses |
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Term
| Real Estate Investment trust (REIT) |
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Definition
- at least 75% invested in real estate activities
- unlimited # of of shareholders
- must distribute 90% of income as dividends and wont be taxed
- shareholders invest to receive dividends (taxed same as ordinary income)
- can only pass through income not losses |
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Term
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Definition
- reorganization
- most are voluntary
- co. and management continue to exist
- filer is known as the debtor in possession (DIP)
- DIP files reorganization |
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Term
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Definition
- liquidation
- trustee files the plan
- co. and management cease to exist
- assets are sold off to pay creditors and investors |
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Term
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Definition
- secured creditors are paid first up to the value of the collateral, unsecured then follows
- administrative claims
- employee back wages
- other unsecured debt (senior first, subordinated)
- preferred stock holders
- common equity holders |
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Term
| how many days do you have to file a currency transaction report CTR? |
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Definition
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Term
| how many days do you have to file a suspicious activity report? |
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Definition
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Term
| if company is operating on the OFAC list, ?what do you do? |
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Definition
| block the transaction and notify law enforcement within 10 biz days |
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Term
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Definition
$100
- can exceed if you go with them
- can expense legitimate business expenses |
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Term
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Definition
| needed to participate in a private securities transaction |
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Term
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Definition
- 2 years easily accessible
- 3 years available
- 4 years customer complaints
- dont need to keep SEC documents |
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Term
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Definition
final and binding, not appeallable
- only for |
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Term
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Definition
| SEC rule which provides an exemption from liability for certain parties in an offering of securities if they can prove they had no knowledge of fraud (cannot be used by issuer) |
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Term
| Private investment in public security (PIPE) |
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Definition
BD acts as a placement agent for the restricted securities of an issuer that already has publicly traded securities
- sold at discount
- no public knowledge
- MNPI |
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Term
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Definition
| allows underwriter to sell up to 15% more shares the orginally offered |
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Term
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Definition
| IRS tax code where certain M&A transactions a stock sale is treated as an asset sale, allows buyer to step-up their cost basis for future tax purposes |
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Term
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Definition
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Term
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Definition
tender offer follow by a short form merger agreement
- quicker than a one step merger |
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Term
Statutory Preliminary Prospectus
(red herring) |
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Definition
| Registration statement used before filing date, (no price) |
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Term
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Definition
any written or graphic document used to offer securities, does not meet the st. of a statutory prospectus
- must include access and recommendation that investors read statutory porsp.
- Ex: term sheets, emails, press releases |
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Term
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Definition
the full disclosure prospectus,
(required by "statute" |
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