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 ?
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.
Morningstar Fund Research, which provides instant access to comprehensive fund information; screening tools for the 16,500 mutual fund share classes in Morningstar's database, including underlying holdings data; fund analyst reports; and profile pages that are designed to be NASD-compliant for client use.
Those funds also will go to brokerage clients who were steered into more expensive mutual fund share classes.
More recently, Hyatt has developed an extensive record representing major broker-dealers and financial institutions before the SEC, NASD and state securities agencies in various conflict-related investigations, including investigations involving mutual fund share classes, market timing, revenue sharing and variable annuities.
Investment advisors must be vigilant about conflicts of interest when selecting mutual fund share classes because the choice may improperly benefit them at the expense of their clients," said Marshall Sprung, co-chief of the SEC Enforcement Division's Asset Management Unit, in a statement.