Fin/370 week 5 initial public offerings paper
In order to minimize these risks applicable securities laws have been put in place such as Sarbanes-Oxley Act (SOX) which sets limits on certain activities like insider trading while also requiring disclosure of certain information about a company e.g financial reports etc. This helps protect investors by providing them with access to accurate info regarding a firm’s performance/stability prior to investing their funds.
Overall, while no system is foolproof there are several measures in place designed to reduce legal and financial risks involved when going public. It is important that all parties involved adhere strictly to these regulations in order ensure the safety of investors and promote honest dealings within this sector.