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penny stock reform act

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Financial Dictionary

Penny Stock Reform Act

A 1990 congressional act that expanded the SEC's authority over previously unregulated promoters who associate with broker-dealers to sell penny stocks. The act also placed restrictions on blank check offerings and required broker-dealers to disclose more information about penny stocks to customers. Perhaps most importantly, the act called for the creation of an automated quotation system for OTC stocks.

Wall Street Words: An A to Z Guide to Investment Terms by David L. Scott.
Copyright © 2003. Published by Houghton Mifflin.
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