Due Diligence Meeting
An internal meeting held after the registration of a new security with the SEC but before the registration's effective date. Under the Securities Act of 1933, all accountants, counsel, underwriters, and managers can be held civilly liable for knowingly making false or misleading statements in the registration documents. In order to shield themselves from liability, representatives of the registrant conduct a meeting before the registration becomes effective to discuss and if necessary remedy any issues that may have arisen. This is considered a necessary part of due diligence prior to the issuance of a new security.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
A meeting between officials of the organization that will be issuing securities and members of the syndicate that will be distributing the securities. A due-diligence meeting is held for the purpose of discussing the terms of the issue, preparing a final prospectus, and negotiating a final agreement between the issuer and syndicate members.
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.