Affiliated Person

  

You enter the school spelling bee. And so does your older brother Sam, who's the top-notch linguist in the country. Should you be treated the same? Not fair, is it?

It works the same with securities. When it comes to trading, buying, or selling stocks and other securities, people working inside a company have a leg up when it comes to knowledge of their own company's performance. Why? Because they have special insider information. These people—including C-level officers and board members—are considered affiliated persons, and they have to follow a bunch of extra laws. If these types own more than 10% of their own company's securities, they're considered affiliated investors, and they face even more restrictions.

It all helps level the playing field between insiders and you, the average Joe or Jane investor. Fair? Definitely.

Related or Semi-related Video

Finance: What is an Affiliated Person or...3 Views

00:00

finance a la shmoop - What is an affiliated person or affiliated investor

00:08

ah Phil he eight ed.. affiliated meaning with or connected to or legally

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conjoined at the hip that's affiliated well why does the concept even matter or

00:21

exists in finance land well because too many times in the dark [Ancient ornament appears]

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days before the SEC was invented family members seemed to always get spectacular

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breaks in knowing just when to buy stock right before the big merger happened

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well the SEC took notice and basically declared that affiliated people like

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family members or people living under the same roof or connected in various

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and sundry other you know close means well all of them would be treated more [The Daily Shmoop newspaper page]

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or less as the same person as far as the law was concerned they created this

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notion of an affiliate so that Joe Sixpack would have at least as fair a [Joe Sixpack appears]

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chance to get positive investment returns at least as close as you know

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the the close-knit cousin living in the guest home of the CEO of whatever

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dot-com only back then it was just called whatever simply said if you're an

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affiliate of an insider ie someone who can't just buy and sell shares of a

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given company whenever they want because they have inside knowledge then you the

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affiliate are legally treated as if you yourself are the insider that's an [Insider and affiliate side by side]

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affiliate so don't let what happen to Phil happen to you [Phil standing behind bars]

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