Fair Funds for Investors
Provision introduced in 2002, under Section 308(a) of the Sarbanes-Oxley Act. Fair Funds for Investors was put into place to benefit those investors who have lost money because of the illegal or unethical activities of individuals or companies that violate securities regulations. Essentially, this provision enabled the Securities and Exchange Commission (SEC) to add civil money penalties to disgorgement funds for the relief of the victims of stock swindles.
Investopedia Commentary
The SEC anticipates that fair funds will play an important role in encouraging investors to continue to place trust in U.S. stock markets. Fair funds are playing an increasing role in the SEC's enforcement of regulations, and they are particularly favored when investors who have lost money can be identified and their financial losses can be calculated. So far, however, these funds have paid out little of their value.
Related Links
Defining Illegal Insider Trading
Handcuffs And Smoking Guns: The Criminal Elements Of Wall Street
See also: Civil Money Penalty - CMP, Disgorgement, Financial Crimes Enforcement Network - FinCEN, Insider Trading, Securities and Exchange Commission - SEC
Also spelled: Fair Fund, Fair Funds