Auction rate securities (ARS) are debt or preferred equity securities whose interest rates are periodically reset through auctions and which are issued with long-term maturities or in perpetuity. ARS were promoted as being as safe as...
law and economics
Investor Protection Guide: Micro-cap Stock Fraud ("Pump and Dump")
"Pump and Dump" is a type of stock fraud involving the use of false or misleading statements to increase stock prices and then sell the inflated stocks to the public. Stocks of microcap companies, which have low capitalizations and limited...
Investor Protection Guide: Ponzi Scheme
Named after Charles Ponzi, who infamously bilked investors out of millions of dollars in the 1920s, a Ponzi scheme is an investment scam that involves the payment of abnormally high "returns" to investors that are actually paid from money...
Investor Protection Guide: Prime Bank Schemes
Prime bank fraud is a type of investment scheme that promises extremely high yields over a short period of time. Individuals claim that they have access to secret financial products which they can buy at a discount and sell at a premium. In...
Investor Protection Guide: Promissory Note Scam
In a promissory note scam, the individuals perpetrating the scam often stay behind the scenes. They persuade others to sell promissory notes by promising them large commissions. The individuals who sell the promissory notes to investors often...
Investor Protection Guide: Pyramid Scheme
A pyramid scheme is an unsustainable, illegal business model where investment returns are typically from the principal of investments or membership fees instead of from the underlying investment gains. It is often marketed as a foolproof way...
Investor Protection Guide: Systematic Investment Plan (SIP)
Systematic Investment Plans (SIP) are regulated as Periodic Investment Plans under the federal securities laws. The primary objective of a SIP is to enable investors to clearly define an investment goal and then to help them reach it. While...
Investor Protection Guide: Viaticals
A viatical settlement (also known as a life settlement) is a sale of a life insurance policy of an insured person with an abbreviated life expectancy. Sellers are typically terminally ill patients who want to cash out of their life insurance...
issuance
An issuance is an offering of new securities. An issuance is also referred to as a primary offering. It can be done as a public offering, e.g. an initial public offering (IPO), or as a private placement. The issuer receives the proceeds of...
issuer
The term “issuer” means every person who issues or proposes to issue any security; except that with respect to certificates of deposit, voting-trust certificates, or collateral-trust certificates, or with respect to certificates of interest or shares...