The Law Dictionary for Everyone
When someone has a “fiduciary duty,” this means that he is responsible for acting in a way that benefits another person. An example of a fiduciary duty is a legal guardian taking care of a minor. The legal guardian’s fiduciary duty is to make the best decisions on the minor’s behalf, such as medical care and the school the minor […]
Read moreThe term “insider trading” is used to describe the buying and selling activities of an individual who has information about a stock that has not been made public. While the term is typically associated with illegal activity, insider trading can actually be done legally, depending on when the investor makes the trade. Insider trading is generally illegal due to the […]
Read moreThe term command economy refers to an economy in which the government dictates the production, supply, and prices of goods and services. In a command economy, the state owns and controls all resources, rather than allowing public supply and demand to influence the nation’s economy. The former Soviet Union and North Korea are two command economy examples, which are considered […]
Read moreA pyramid scheme is a fraudulent business model that uses new recruits, who are promised payment to enroll others. The illegal investment scam begins when an individual or company recruits investors by promising high returns. These recruits are led to believe that the more people brought into the business, the higher the profits will be. Pyramid schemes only benefit the […]
Read moreAccredited investor is a term used to define certain individuals and entities that are allowed to engage in higher risk investments, or to invest on a large-scale basis. Such investments may include seed money, hedge funds, private placements, and angel investor networks. Accredited investors are generally wealth individuals and such organizations as banks, insurance companies, large charities, and some retirement […]
Read moreA contract or written agreement between the issuer of a bond and the bondholder or investor is referred to a “bond indenture.” The bond indenture specifies the terms of the contract, including the interest rate, convertibility, maturity date, and other important terms. To explore this concept, consider the following bond indenture definition. Definition of Bond noun. An official document in […]
Read moreMany states have come up with legislation (“laws”) that compels certain standards in matters involving the offering of and selling securities. These “Blue Sky laws” are intended to protect consumers from being induced into uncertain or overly speculative investments, as well as protecting them against fraud. Each state specifies its own provisions to their Blue Sky laws, however all require […]
Read moreWhen one person or entity agrees to act on behalf of another person or entity in matters of importance, such as legal, financial, and authority, he or she is considered a “fiduciary.” The client, trustor, or beneficiary, has the right to expect the fiduciary to put forth his best effort, using all of his expertise, skill, and care in acting […]
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