Spinning

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Spinning

In investment banking, the practice of an investment bank setting aside portions of a corporation's Initial Public Offering for senior management of that corporation. Ethically questionable practice which appears to be a form of bribery.

Spinning

The act or practice of an underwriting or brokerage firm giving shares of an IPO, especially a popular issue, to major executives in some company unrelated to the company issuing the IPO. These executives return the favor by recommending that their clients do business to the underwriter or broker. The relationship is mutually beneficial because the executives profit from the shares in the IPO and the underwriter or broker profits from the new business. However, it is controversial and some believe spinning to be unethical. Spinning should not be confused with spinning off, which is a different concept altogether.

spinning

The allocating of shares of a hot initial offering by a securities firm to the personal account of a corporate executive in anticipation of gaining future business from the executive's firm.