Gun Jumping


DEFINITION of 'Gun Jumping'

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.


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.

  1. Regulation Fair Disclosure - Reg ...

    A rule passed by the Securities and Exchange Commission in an ...
  2. Prospectus

    A formal legal document, which is required by and filed with ...
  3. IPO Lock-Up

    A contractual caveat referring to a period of time after a company ...
  4. Friendly Hands

    A nickname for investors in an IPO who will likely hold onto ...
  5. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs ...
  6. Securities And Exchange Commission ...

    A government commission created by Congress to regulate the securities ...
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