classified stock

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Classified stock

The division of stock into more than one class of common stock, usually called Class A and Class B. The specific features of each class, which are set out in the charter and bylaws, usually give certain advantages to the Class A shares, such as increased voting power.

Classified Stock

1. A type of stock in a publicly-traded company that issues more than one type of stock. Each type of classified stock has distinct rights attached to it. Two common classified stocks are preferred stock, which carries the right to guaranteed dividends, and common stock, which carries the right to vote in the annual meeting.

2. In mutual funds, a stock with a particular load. The load, which is the sales fee for buying into the mutual fund, is charged at different times depending on the stock class. For example, a class A stock has a load that is paid up front, while a class B stock has a load that is paid when one sells the shares in the mutual fund.

classified stock

References in periodicals archive ?
The EPI analysis is based on methodologies and assumptions from a 2015 report released by President Barack Obama's Council of Economic Advisers, which underpinned the original fiduciary rule developed by his Labor Department, and an April 2017 report from Morningstar focused on how new mutual fund share classes could reduce conflicted financial advice.
Gottschall has investigated or supervised dozens of enforcement matters involving a variety of securities law violations, including: Charges against an alternative fund manager for overcharging management fees and misleading investors about how it valued certain assets that ordered more than $6.4 million in monetary relief, An enforcement action against an Omaha investment adviser for failing to seek the most favorable mutual fund share classes in three funds that it managed, Fraud charges and an emergency asset freeze against the promoters of a $30 million Ponzi scheme, A financial fraud case against six executives of a Kansas-based insurance agency franchisor and lender.
Also inside this issue, Steve Saxon (http://www.plansponsor.com/MagazineArticle.aspx?id=6442476536) looks at the new, expanded definition of fiduciary, Fred Reish (http://www.plansponsor.com/MagazineArticle.aspx?id=6442476537) looks at the duty to understand mutual fund share classes and costs, and Mike Barry (http://www.plansponsor.com/MagazineArticle.aspx?id=6442476535) talks about the next "bubble" -- public pension funding.
Those funds also will go to brokerage clients who were steered into more expensive mutual fund share classes.