Fair Funds for Investors

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.

BREAKING DOWN '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. Civil Money Penalty - CMP

    A punitive fine imposed by a civil court on an entity that has ...
  2. Investment Company Act Of 1940

    Created in 1940 through an act of Congress, this piece of legislation ...
  3. State Administrator

    The government agency or official who oversees and enforces state-level ...
  4. General Provisions

    A balance sheet item representing funds set aside by a company ...
  5. SEC Form N-1A

    A filing with the Securities and Exchange Commission (SEC) that ...
  6. Sarbanes-Oxley Act Of 2002 - SOX

    An act passed by U.S. Congress in 2002 to protect investors from ...
Related Articles
  1. Investing News

    Money Market Funds: Enough Regulation Already?

    Since September, the Securities and Exchange Commission (SEC) has been sitting on proposed rules for money market mutual funds that would affect 61 million individual investors plus untold businesses ...
  2. Investing Basics

    How A Company Files With The SEC

    Filing with the SEC is not as complicated as you might thing -- just be meticulous about following the steps.
  3. Insurance

    On This Day In Finance: July 30 - The Sarbanes-Oxley Act Is Signed Into Law

    On July 30, 2002, the Sarbanes-Oxley Act was signed into law by President George W. Bush.
  4. Investing News

    The Biggest SEC Takedowns Of 2011

    The SEC has filed 735 enforcement actions in the 2011 fiscal year ended September 30. Here are some of the biggest.
  5. Insurance

    Breaking The Buck: Why Low Risk Is Not Risk-Free

    Money market funds have been assumed to be safe investments, and they are - but only to a point.
  6. Options & Futures

    Hedge Funds Go Retail

    Find out how average investors are breaking into what was once reserved for the ultra rich.
  7. Investing News

    4 Factors to Know About Money Market Reform in 2016 (FII, BAC)

    Learn more about the impending implementation of the money market fund reform, including how it impacts individual and institutional investors.
  8. Retirement

    Analyzing The Best Retirement Plans And Investment Options: Mutual Funds

    What they are: A professionally managed pool of stocks, bonds and/or other instruments that is divided into shares and sold to investors. Pros: Diversification; liquidity; simplicity; ...
  9. Mutual Funds & ETFs

    Side-By-Side Management May Favor Hedge Over Mutual Funds

    Having your firm handle both investments can spell disaster for your returns.
  10. Mutual Funds & ETFs

    5 Characteristics of Strong Mutual Fund Shares

    Discover some of the basic characteristics shared by good mutual funds that investors can use to help them in selecting funds.
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 Answer >>
  2. Should mutual funds be subject to more regulation?

    Understand whether mutual funds need stricter regulation. Learn what types of current and future regulations have been put ... Read Answer >>
  3. What impact did the Sarbanes-Oxley Act have on corporate governance in the United ...

    Learn the effects the Sarbanes-Oxley Act has on corporate governance in the United States, including strict disclosures, ... Read Answer >>
  4. What typically comprises a money market fund?

    Learn about the basic types of money market funds and discover how they are characterized by the types of investments that ... Read Answer >>
  5. How do I calculate a bond's modified duration using Excel?

    Understand the benefits of investing in a money market mutual fund, and learn why investors use this type of account in volatile ... Read Answer >>
  6. How often do mutual funds report their holdings?

    Learn how mutual funds are required by the Securities and Exchange Commission to disclose their portfolio holdings on a quarterly ... Read Answer >>
Hot Definitions
  1. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  2. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  3. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  4. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  5. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  6. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
Trading Center