An unauthorized investment sounds illegal, but it’s not. That’s an “unauthorized transaction,” or a “nonlegal investment”...big SEC no-no’s.
So what’s an unauthorized investment? It’s an investment that occurs within an organization that isn’t contributing to the goals of that organization.
For instance, a bank may make an unauthorized investment, which would mean the investment doesn’t contribute to the plan set forth by bank managers and approved by bank shareholders.
Unauthorized investments can happen for myriad reasons, but they’re arguably not too common...at least when they aren’t easy to hide. For instance, shareholders can vote to make a change to management if they’re saying one thing and doing another, leading to disappointing returns.
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Finance: What is Authorized Stock?2 Views
finance a la shmoop what is authorized stock... well when a company goes
public and gets all incorporated well it changes legal status and part of it [People in a meeting]
means having lots of meetings and signing more paperwork than most of us
see in a lifetime well one of those pieces of paper is a charter or legal [Legal document appears]
document which outlines a whole bunch of rules including the number of shares a
company can issue well this number of shares is called authorized stock [Document stamped authorized stock]
because it's the maximum total number of shares the company is authorized by its
charter to issue ....well let's say company XXX wants to buy company Y it's like a
genetic coding industry... company XXX has an authorized
limit of a hundred million shares and currently has 85 million shares and five
million options yet unvested outstanding technically it has 90 million shares
outstanding..... it wants to
print shares to buy company Y but company Y wants 20 percent of the [Company XXX printing stock]
primary shares of the company XXX or 17 million shares no primary does not
include options all right well company XXX cannot print enough share to buy Y [Shares printing]
why? because it needs to get approval to change the charter and that is only
doable by a majority vote of the outstanding shares at the time right and
it's mostly common shareholders who will own those all right well the company has
to have authorized shares to be able to make that transaction you know happen so
that's authorized stock and now you know it isn't just stock that's been approved
by you Mark Twain [Mark Twain sitting at a desk with stock]
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Power of attorney refers to the authorization to conduct business on legal and financial matters on behalf of another party. So...choose wisely.