What is a Hot Issue as it relates to securities law?
If the price for an IPO (an initial public offering) increases in the first day of trading, it is considered a hot issue. Owners and employees of brokerdealers and other industry insiders are prohibited from participating in hot issues. A prohibited owner or employee is generally allowed to begin trading in the aftermarket. The trading that occurs after an initial public offering (IPO) is the aftermarket.
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Federal securities law is extremely complex. For any legal dispute involving securities law, find an experienced lawyer in our directory for help.
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