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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
According to the SEC’s complaint, Bitqyck and founders Bruce Bise and Sam Mendez- created and sold Bitqy and BitqyM in unregistered securities offerings to more than 13,000 investors, raising more than $13 million.0x20Investors allegedly received $4.5 million for referring new investors to Bitqyck but collectively lost more than two-thirds of their investment in the Dallas-based company.
Gianan and PDI are illegal, considering that they are not only selling unregistered securities but they were also soliciting investments without a license.
In closing let me also remind everyone that the buying, selling and dealing of unregistered securities is punishable by fine or imprisonment under Section 28 and Section 73 of the SRC which state:
'Based on the conduct of preliminary investigation, it was found that Organico is into selling of unregistered securities. They offered investment contract through social media,' said Bautista.
"Based on the conduct of the preliminary investigation, it was found that Organico is into selling of unregistered securities. They offered an investment contract through social media.
Ford and Katherine Graham, both of Princeton, raised $5 million through loans between January 2012 and January 2014, including $1.9 million of unregistered securities, Attorney General Gurbir Grewal said.
Morley and his wife, Diane Morley, owned and operated several businessesbased in Maryland and were involved in "multiple fraudulent offerings of unregistered securities" issued by their companies and Summit Trust Company, a Nevada company accused of operating a "Ponzi-like scheme," according to a news release.
This new service will enable the creation and funding of specialized brokerage accounts at North Capital Private Securities ("NCPS"), a wholly owned subsidiary of NCIT, to hold cash and unregistered securities that have been issued in exempt offerings.
"The public is hereby advised to exercise caution in investing their money in schemes which may turn out to be fraudulent, involving the sale of unregistered securities," the advisory read.
The North American Securities Administrators Association announced the wide-ranging series of probes on Monday, dubbed "Operation Crypto-Sweep." The investigations, some of which have already concluded, are aimed at unregistered securities offerings and initial coin offerings that promise significant returns without informing investors of the risks.
The implication is that even Ethereum and Ripple -- the second- and third-largest crypto-assets -- are currently operating as unregistered securities. Gary Gensler, a former chairman of the Commodities and Futures Trading Commission who now teaches a course on blockchain (the technology underlying cryptocurrencies) at MIT, has also suggested as much.