Question

When a registration statement (prospectus) for an IPO is filed, the Securities and Exchange Commission (SEC)...

When a registration statement (prospectus) for an IPO is filed, the Securities and Exchange Commission (SEC) verifies that the

a. Offering will provide value to the shareholders

b. Stock price is set at a level that will allow shareholders to earn a positive return

c. Rules have been followed to allow for full disclosure of information

d. Issuer is financially sound

e. All of the above

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Answer #1

C. Rules have been followed to allow for full disclosure of information

SEC Requires complete disclosure of information. The registration statement contain information regarding IPO , Financial statement of company , background of the management , insider holding etc. The registration statement ensures that investor has all the information regarding the security. SEC carries due deligence on registration statement to ensure that Rules have been followed to allow for full disclosure of information

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