gun jumping

Gun Jumping

1. The illegal practice of soliciting orders to buy a new issue before registration of the initial public offering (IPO) has been approved by the Securities and Exchange Commission (SEC).

2. Trading securities on the basis of information that has not yet been disclosed to the public.

Notes:

The theory behind gun jumping is that investors should make decisions based on the full disclosure in the prospectus, not on the information disseminated by the company that has not been approved by the SEC. If a company is found guilty of "jumping the gun", the IPO will be delayed.

See also: IPO, Prospectus, Regulation FD (Reg FD), SEC

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Gun jumping

In the context of securities trading, refers to trading in a security on the basis of information that has not been made available to the public. The illegal solicitation of buy orders in an underwriting before completion and finalization of Securities and Exchange Commission registration.

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gun jumping

1. The trading in a security before inside information has been released to the public.

2. Solicitation of orders for a new security underwriting before the SEC has approved the registration statement.