Page 125 - Initial Public Offering - An Introduction to IPO on Wall Street
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Legal Status of IPO Lock-Ups
It should be remembered that the Securities and Exchange Commission (SEC) or any other
government entity does not require lock-up periods. Rather, lock-up periods are either imposed
by the publicly-traded company on itself or mandated by the investment bank that underwrites
the IPO request.
The goal is the same in both scenarios: to maintain high stock prices when a business goes
public. In its S-1 filing with the SEC, the public will learn about the lock-up period(s) of a
business. Subsequent S-1As will report any adjustments to the period(s) for lock-up.
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