Fair Funds for Investors

AAA

DEFINITION of 'Fair Funds for Investors'

Provision introduced in 2002, under Section 308(a) of the Sarbanes-Oxley Act. Fair Funds for Investors was put into place to benefit those investors who have lost money because of the illegal or unethical activities of individuals or companies that violate securities regulations. Essentially, this provision enabled the Securities and Exchange Commission (SEC) to add civil money penalties to disgorgement funds for the relief of the victims of stock swindles.

INVESTOPEDIA EXPLAINS 'Fair Funds for Investors'

The SEC anticipates that fair funds will play an important role in encouraging investors to continue to place trust in U.S. stock markets. Fair funds are playing an increasing role in the SEC's enforcement of regulations, and they are particularly favored when investors who have lost money can be identified and their financial losses can be calculated. So far, however, these funds have paid out little of their value.

RELATED TERMS
  1. Disgorgement

    A repayment of ill-gotten gains that is imposed on wrong-doers ...
  2. Financial Crimes Enforcement Network ...

    A network administered by the United States Department of the ...
  3. Civil Money Penalty - CMP

    A punitive fine imposed by a civil court on an entity that has ...
  4. Securities And Exchange Commission ...

    A government commission created by Congress to regulate the securities ...
  5. Insider Trading

    The buying or selling of a security by someone who has access ...
  6. Cumis Counsel

    Legal counsel chosen by the insured when the insurer has a conflict ...
RELATED FAQS
  1. What happens to the fines collected by the Securities and Exchange Commission?

    When the Securities and Exchange Commission (SEC) enforces a civil action against a corporation or an individual found guilty ... Read Full Answer >>
Related Articles
  1. Options & Futures

    Handcuffs And Smoking Guns: The Criminal Elements Of Wall Street

    From godfathers to perps, familiarize yourself with the "criminal elements" creeping around Wall Street.
  2. Economics

    Defining Illegal Insider Trading

    The better you understand why insider trading can be criminal, the better you'll understand how the market works.
  3. Mutual Funds & ETFs

    The Impact of the Janus Market Timing Ruling

    A look at the impact of the Janus Supreme Court ruling on market timing.
  4. Options & Futures

    Get To Know These Crucial US Options Market Regulations

    How are options regulated in the U.S and which organizations are involved in options market regulations?
  5. Economics

    The Impact Of Ending The US Embargo On Cuba

    Many argue that ending the US embargo on Cuba will not only make US consumers happy, but also help the US economy and bring more freedoms to Cuba.
  6. Economics

    Popular Places Where U.S. Citizens Need A Visa

    A U.S. passport will get you into many countries, but not everywhere. Here's how to visit five of the most popular destinations that require visas.
  7. Economics

    Are You the Victim of Unfair Labor Practices?

    If you are a union member, a union leader, or a manager at a company with an established union, you should understand unfair labor practices.
  8. Investing

    How The SEC Tracks Insider Trading

    We look at how the SEC tracks and tries to stop insider trading - a seemingly impossible task.
  9. Investing News

    What Affirmative Action Means for Regular Business

    What Affirmative Action means for your businesses today.
  10. Economics

    How To Pass The U.S. Citizenship Test

    The U.S. citizenship test includes a civics section some states may require high school grads to master. Here's what an immigrant must know to pass it.

You May Also Like

Hot Definitions
  1. Fixed-Charge Coverage Ratio

    A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. It is calculated ...
  2. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  3. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  4. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  5. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  6. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
Trading Center