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TERM
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DEFINITION
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| Blind Trust |
A trust, or financial arrangement, in which a fiduciary third party has full discretion over the assets, and the trust beneficiaries have no knowledge of the holdings of the trust. These trusts are often used by politicians to avoid a conflict of interest between the beneficiary and the investment.
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| Bond |
A debt security, in which the issuer, such as a company, the government, or a municipality, owes the investor or holder of the bond a debt including the borrowed funds and interest that is repaid at a later date.
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| Civil Penalty |
The fine charged by the government or civil court for an illegal act.
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| Common Law |
A system of law established by court decisions as opposed to written laws.
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| Confidentiality |
The state of being kept secret or legally unauthorized to be disclosed.
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| Conflict of Interest |
A conflict between someone's personal interests and public obligations or responsibilities.
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| Corner a Market |
To have a large enough portion of shares in a particular security to manipulate the price of the security.
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| Criminal Penalty |
The punishment for committing a crime.
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| Ethics |
A system or set of principles that guide the conduct of a society or members of a group or profession.
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| Fiduciary |
An individual, corporation, or association that acts on behalf of and in the interest of another party, often with the legal authority to make financial decisions, in a special relationship of trust, confidence, or responsibility; a trustee.
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| Franking Privilege |
The privilege for US Members of Congress to send their constituents official mail addressing matters of public concern or public service (i.e. letters, newsletters, press releases, etc.) under the Member's signature without postage.
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| Fraud |
A deception or trickery exercised for unlawful gain or advantage.
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| Hedge Fund |
An investment company or portfolio that is allowed to utilize more flexible and aggressive investment strategies that are not allowed in mutual funds or other funds regulated by the US Securities and Exchange Commission (SEC). Hedge funds require very large initial investments, have potentially very high gains, and are usually higher in risk. Investors include institutions and very high net worth individuals.
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| Insider Trading |
The buying or selling of securities based on material nonpublic information in breach of a fiduciary duty.
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| Investment |
The purchase of a financial product, a piece of property, an object of value or the use of money for future income or financial gain.
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| Material Information |
Information that would affect the price of the corporation's stock share.
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| Misappropriation |
The illegal act of using someone else's property, money, or funds for personal use, benefit, or economic gain.
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| Nonpublic Information |
Information that is not available or released to the public.
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| Political Intelligence Operatives |
Firms or organizations that gather nonpublic legislative information from lobbyists or information sources in Congress, for stock trading or other purposes.
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| Proxy |
A person with the authority to act in the place of another, such as an agent or substitute.
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| Public Disclosure |
The act of making public or releasing information to all parties of interest.
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| Qualified Blind Trust |
A type of blind trust used by government officials the contents of which are not required to be publicly disclosed so that government officials can avoid a conflict of interest between their work and personal investments by having limited knowledge of their investments. Beneficiaries of the trust have minimal knowledge of the specific holdings and investment activity of the trust except for the initial holdings in the trust, its cash value, and when an initial holding is sold.
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| Security |
A contract of value that can be traded, such as a stock, a bond, or any other instrument of investment.
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| Short Selling |
An investment strategy in which an investor anticipates a security will drop in value, borrows shares of the security from the seller and sells the shares, then pays back the seller of the security after the price of the security has fallen in value.
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| Statutory |
Related to, authorized by, punishable by, or regulated by a law.
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| Stock |
A type of security that signifies ownership in a corporation and claims to a corporation's assets and profits.
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| STOCK Act |
A bill introduced in 2006 and reintroduced in 2007 and 2009 by a few Congressional representatives to ban trading securities based on congressional knowledge. (See the STOCK Act for further details.)
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| Stock Exchange |
See Stock Market.
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| Stock Market |
An organized and regulated market for the trading of stocks and shares over-the-counter or through exchanges.
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| Stock Speculation |
Taking above-average risks in buying securities that could potentially return significant profits on the basis of their potential selling price as opposed to the actual value of the security.
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| Tender Offer |
A takeover bid, an offer to purchase shareholders' shares in a corporation above the market price.
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| Tip |
The illegal act of disclosing material nonpublic information to someone unauthorized to know the information, prior to the information being made public.
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| Trust |
The legal holding of property or assets by one party for the benefit of another.
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