restricted security

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Restricted Security

A stock or right that one acquires through some means other than the open market. One may receive a restricted security through a merger or acquisition, private placement prior to an IPO, or sometimes through a stock option. A restricted security is not registered with the SEC and thus may not be sold publicly until registration has been made. It is less commonly called a letter security.

restricted security

A security that has not been registered with the SEC and therefore may not be sold publicly. These securities frequently enter portfolios of institutional investors through private placements and are sometimes registered at a later date. Also called letter bond, letter security, letter stock, unregistered security.

Restricted security.

Restricted securities are stocks or warrants that you acquire privately, through stock options or a corporate merger, rather than by buying them in the open market.

For example, you may receive restricted stock if you put money into a startup company.

If the company has not yet registered with the Securities and Exchange Commission (SEC) for an initial public offering (IPO), its securities cannot be transferred or resold until the issuing company meets the SEC registration requirements for publicly traded securities.

If you exercise stock options and buy stock at a reduced price, you may be required to hold those stocks for a period of time before liquidating them.

References in periodicals archive ?
issued 5 million shares of unregistered stock during a period in 1997 when it again was a "shell corporation" with little or no assets.
In addition to auction-rate securities, other assets currently traded through the RSTN include unregistered stock, warrants, convertible securities, 144A equity and private company securities.
Parnell caused Ammonia Hold to report that $160,000 of the $660,000 paid for the unregistered stock was actually revenue from a licensing agreement with a subsidiary of a Swiss bank.
NEW YORK -- What happens when billions of shares of unregistered stock become saleable into the public market all on the same day?
POLITICS - not the sale of illegal sale of unregistered stock - spawned the latest round of sanctions imposed by Arkansas Securities Commissioner Mac Dodson against the group pushing to build casinos and legalize other forms of gambling, says its attorney.
The stock will be 144 unregistered stock, and when COG completes its registration process with the SEC, the company's transfer agent will send out the registered stock certificates.
In addition to the company's selling of unregistered stock, another reason the Securities Department sought to stop the company's stock trading was because promotional materials from the group didn't disclose possible risks.
in exchange for unregistered stock of Nimbus Group.
The unregistered stock certificates and warrants of Novolytic have been distributed either directly from Novolytic transfer agent or through PCIT shareholders' brokerage firms if PCIT shares are held in street name with their brokers.
Manuel Asensio claims that Research Frontiers is engaged in the sale of unregistered stock in connection with an investment by London-based money management firm, Ailouros Ltd.
NASDAQ:BTGC) today announced that it has completed the acquisition of Myelos Corporation, announced on February 22, 2001, for $35 million in a combination of $14 million in cash and $21 million in unregistered stock.