Category: Investor Definitions

Affinity fraud refers to investment scams that prey upon members of identifiable groups, such as religious or ethnic communities, the elderly, or professional groups. The fraudsters who promote affinity scams frequently are – or pretend to be – members of the group. They often enlist respected community or religious leaders from within the group to… Continue reading AFFINITY FRAUD

Advance fee frauds ask investors to pay a fee up front – in advance of receiving any proceeds, money, stock, or warrants – in order for the deal to go through.  The advance payment may be described as a fee, tax, commission, or incidental expense that will be repaid later.  Advance fee frauds may involve the… Continue reading ADVANCE FEE FRAUD

Interest earned on a security but not yet paid to the investor.

nder the federal securities laws, a company that offers or sells its securities must register the securities with the SEC or find an exemption from the registration requirements. The federal securities laws provide companies with a number of exemptions. For some of the exemptions, such as Rule 506 of Regulation D, a company may sell its securities to… Continue reading ACCREDITED INVESTORS

For information on what to expect when opening a brokerage account, including what information you will need to provide, what decisions you will be asked to make, and what questions you should ask your broker, please read our Investor Bulletin: How to Open a Brokerage Account.

A fee that some funds separately impose on investors for account maintenance. For example, individuals with accounts below a specified dollar amount may have to pay an account fee.

Public companies file Form 8-K, known as the “current report,” to the SEC to announce major events that shareholders should know about, including bankruptcy proceedings, a change in corporate leadership (such as a new director or officer) and preliminary earnings announcements.

A 529 plan is a tax-advantaged savings plan designed to encourage saving for educational costs. 529 plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code.  There are two types of 529 plans: prepaid tuition plans and education savings plans. All… Continue reading 529 PLANS

A state, a state agency or educational institution that chooses a plan manager and determines the rules and limits for its plan.

A financial services firm — a mutual fund company, a brokerage firm, an investment adviser, or an insurance company — that handles all of the transactions and investments within the plan.