Form 4

Search Dictionary

Definition of 'Form 4'

A Form 4 is a document that must be filed with the Securities and Exchange Commission (SEC) by any person who acquires or disposes of more than 5% of a company's securities. The form must be filed within 10 days of the transaction.

The Form 4 provides information about the person who made the transaction, the date of the transaction, the number of shares involved, and the price per share. This information is important because it allows investors to track the activities of major shareholders and to identify potential conflicts of interest.

For example, if a company's CEO buys a large number of shares of the company's stock, it could be interpreted as a vote of confidence in the company's future prospects. However, if a company's board member sells a large number of shares, it could be interpreted as a sign of concern about the company's future.

The Form 4 is also used to disclose transactions by insiders, such as officers, directors, and large shareholders. Insider trading is the illegal practice of using confidential information to make trades in a company's stock. The Form 4 helps to deter insider trading by making it more difficult for insiders to hide their trades.

In addition to the information listed above, the Form 4 also includes the following information:

* The person's relationship to the company (e.g., officer, director, or 10% shareholder)
* The purpose of the transaction (e.g., purchase, sale, or exercise of options)
* The source of the funds used to make the transaction (e.g., personal funds or borrowed funds)

The Form 4 is an important document that provides investors with information about the activities of major shareholders and insiders. This information can be used to make informed investment decisions.

Do you have a trading or investing definition for our dictionary? Click the Create Definition link to add your own definition. You will earn 150 bonus reputation points for each definition that is accepted.

Is this definition wrong? Let us know by posting to the forum and we will correct it.