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.

  1. Civil Money Penalty - CMP

    A punitive fine imposed by a civil court on an entity that has ...
  2. Financial Crimes Enforcement Network ...

    A network administered by the United States Department of the ...
  3. Disgorgement

    A repayment of ill-gotten gains that is imposed on wrong-doers ...
  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. Novation

    1.The act of replacing one participating member of a contract ...
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. Financial Advisors

    SEC Audit? How Financial Advisors Can Be Ready

    Your firm may never be audited by the SEC, but you need to be prepared nonetheless. Follow these tips to make sure you're in compliance and organized.
  4. Investing Basics

    What are the fiduciary responsibilities of board members?

    Find out what fiduciary duties a board of directors owes to the company and its shareholders, including the duties of care, good faith and loyalty.
  5. Investing News

    What Affirmative Action Means for Businesses

    A look at what Affirmative Action means for your business.
  6. Investing

    Protect Your Creations--Register Your Trademark

    Federally registering your brand name or logo offers the broadest protection against potential trademark infringement.
  7. Entrepreneurship

    Hiring? Regulations Small Businesses Need to Know

    When a small business becomes an employer, it has new responsibilities. Make sure you familiarize yourself with regulatory requirements.
  8. Professionals

    Top SEC Exam Hacks for Financial Advisors

    These five tips will help financial advisors pass muster when the SEC comes knocking.
  9. Economics

    China's Former One-Child Policy Explained

    A look at China's former plan to control population growth.
  10. Entrepreneurship

    6 Signs It's Time to Take Your Business Public

    There's much more to going public than getting a pile of cash to grow your company. Here's how to tell if you're ready for everything an IPO entails.
  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 >>
  2. Are UTMA accounts escheatable?

    Like most financial assets held by institutions such as banks and investment firms, UTMA accounts can be escheated by state ... Read Full Answer >>
  3. What is the SEC's escheatment process?

    The U.S. Securities and Exchange Commission (SEC) does not have its own escheatment process. Rather, the SEC notes that the ... Read Full Answer >>
  4. Can the IRS audit you after a refund?

    The U.S. Internal Revenue Service (IRS) can audit tax returns even after it has issued a tax refund to a taxpayer. According ... Read Full Answer >>
  5. How does escheatment impact a company?

    In recent years, state governments have become increasingly aggressive in enforcing escheatment laws. As a result, many businesses ... Read Full Answer >>
  6. What happens if property is wrongfully escheated?

    If your financial accounts, such as bank, investment or savings accounts, are declared dormant and the managing financial ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  4. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  5. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  6. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
Trading Center