Author: SEC

A blank check company is a development stage company that has no specific business plan or purpose or has indicated its business plan is to engage in a merger or acquisition with an unidentified company or companies, other entity, or person. These companies typically involve speculative investments and often fall within the SEC’s definition of… Continue reading BLANK CHECK COMPANY

A binary option is a type of options contract in which the payout depends entirely on the outcome of a yes/no proposition and typically relates to whether the price of a particular asset will rise above or fall below a specified amount.   Once the option is acquired, there is no further decision for the holder… Continue reading BINARY OPTIONS

The term “bid” refers to the highest price a buyer will pay to buy a specified number of shares of a stock at any given time.  The term ask refers to the lowest price at which a seller will sell the stock. The bid price will almost always be lower than the ask or “offer,” price.  The… Continue reading BID PRICE

A beneficial owner holds stocks indirectly, for example, through a bank or broker-dealer. Beneficial owners are sometimes said to be holding shares in “street name.”

One one-hundredth (.01) of a percentage point. For example, eight percent is equal to 800 basis points.

A company may decide to declare bankruptcy when it suffers from crippling debt.  Federal bankruptcy laws govern how the assets and business of a company will be used to clear its debts. There are two types of bankruptcy available to companies (Chapter 7 and Chapter 11), but regardless of the type of bankruptcy a company… Continue reading BANKRUPTCY FOR A PUBLIC COMPANY

Filing for protection under the federal bankruptcy laws can help companies make plans to repay their debts.  A bankrupt company might use Chapter 11 of the Bankruptcy Code to reorganize its business and try to become profitable again.  During the period of the bankruptcy proceeding, management may continue to run the day-to-day business operations but… Continue reading BANKRUPTCY

The SEC routinely receives questions and complaints from investors about the investment products they have purchased. But not all investments are considered securities under the securities laws. For example, some products, such as notes that have been issued by a bank, may not be securities and are regulated by the banking authorities. If you have… Continue reading BANKING REGULATORS

A sales charge, also known as a “deferred sales charge,” investors pay when they redeem (sell) mutual fund shares. Funds generally use these to compensate brokers.