Wall Street Words word of the day = Full Disclosure
Hello YouTube, Todd Ault here, and Welcome to Wall Street Words! Today's Wall Street term is "Full Disclosure"
Now, "Full Disclosure" is a term used when you're doing a financing and you're letting your investors know all the risk factors involved with the company. Now, "Full Disclosure" means a lot to different people in terms of what they think should be disclosed. But the SEC has a clear definition and rules regarding disclosure. Now, there's an old adage on Wall Street. DISCLOSE, disclose, disclose. If you have related party transactions or conflicts of interest, you need to make sure that your investors know that you may work for two companies instead of one, or somehow you may work at a company in which a relative works. There's all kinds of disclosure issues out there, like risk factors. If you're a manufacturer, if you're a financing company, if you're a technology company, like one of the risk factors could be, hey, our technology may fail or we have competitors that have similar technology, or did you know that we're into a patent dispute? We have a lawsuit pending. They're trying to sue us for our technology. If you don't tell those investors, it could be bad news. Today's world is "Full Disclosure," and that's making sure if you're a company issuing securities, you tell your investors all the details in the PPM, which we talked about before, or in the S-1, the prospectus, you've got to tell your investors everything you know, that could be a risk for the company.
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