Gun Jumping

What Does Gun Jumping Mean?
1. The illegal practice of soliciting orders to buy a new issue before registration of the initial public offering (IPO) has been approved by the Securities and Exchange Commission (SEC).

2. Trading securities on the basis of information that has not yet been disclosed to the public.

Investopedia explains Gun Jumping
The theory behind gun jumping is that investors should make decisions based on the full disclosure in the prospectus, not on the information disseminated by the company that has not been approved by the SEC. If a company is found guilty of "jumping the gun", the IPO will be delayed.

Related Terms

Initial Public Offering - IPO
IPO Lock-UP
Prospectus
Regulation FD (Reg FD)
Securities And Exchange Commission - SEC
More Related Terms

Related Links

Don't Forget To Read The Prospectus! - Learn to decipher the secret language of the prospectus - it can tell you a lot about a company's future.
IPO Basics Tutorial - What's an IPO, and how did everybody get so rich off them during the dotcom boom? We give you the scoop.

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