Author: SEC

“Mini-tender” offers are tender offers that, when consummated, will result in the person who makes the tender offer owning less than five percent of a company’s stock. The people behind these offers—also known as “bidders”—frequently use mini-tender offers to catch shareholders off guard. Most bidders won’t use the term “mini-tender offer” to describe their offer… Continue reading MINI-TENDER OFFERS

The term “microcap stock” (sometimes referred to as “penny stock”) applies to companies with low or micro market capitalizations.  Companies with a market capitalization of less than $250 or $300 million are often called “microcap stocks” – although many have market capitalizations of far less than those amounts.  The smallest public companies, with market capitalizations of… Continue reading MICROCAP STOCK

Mergers are transactions involving the combination of generally two or more companies into a single entity. The need for shareholder approval of a merger is governed by state law.  Typically, a merger must be approved by the holders of a majority of the outstanding shares of the target company.  Approval of the acquiring company’s shareholders… Continue reading MERGERS

Arbitration, a form of alternative dispute resolution, is a technique for the resolution of disputes outside the court system.  The parties to a dispute refer it to arbitration by one or more persons and agree to be bound by the arbitration decision. Most account agreements between broker-dealers and their customers have arbitration clauses.  The arbitration… Continue reading MEDIATION AND ARBITRATION

If you hold securities in physical certificate form and want to transfer or sell them, you will need to sign the certificates and securities powers–a legal document, separate from a securities certificate that investors use to transfer or assign ownership to another person or entity. You will need to get your signature guaranteed on all… Continue reading MEDALLION SIGNATURE GUARANTEES: PREVENTING THE UNAUTHORIZED TRANSFER OF SECURITIES

When a broker-dealer sells you securities out of its inventory, the broker-dealer acts as a principal in the transaction (that is, selling to you directly the securities it holds).  When acting in a principal capacity the broker-dealer generally will be compensated by selling the security to you at a price that is higher than the… Continue reading MARKUPS

For information on circuit breakers and other market volatility procedures please read our investor bulletin “New Measures to Address Market Volatility.”

A market order is an order to buy or sell a stock at the current market price. Unless you specify otherwise, your broker will enter your order as a market order. The advantage of a market order is that as long as there are willing buyers and sellers, you are almost always guaranteed your order… Continue reading MARKET ORDER

Market manipulation is when someone artificially affects the supply or demand for a security (for example, causing stock prices to rise or to fall dramatically). Market manipulation may involve techniques including: Spreading false or misleading information about a company; Engaging in a series of transactions to make a security appear more actively traded; and Rigging… Continue reading MARKET MANIPULATION

A “market maker” is a firm that stands ready to buy or sell a stock at publicly quoted prices.  Learn More.