newspaper prospectus. A summary prospectus that the SEC allows to be disseminated through advertisements in newspapers, magazines, or other periodicals sent through the mails as second-class matter (though not distributed by the advertiser), when the securities involved are issued by a foreign national government with which the United States maintains diplomatic relations.
preliminary prospectus. A prospectus for a stock issue that has been filed but not yet approved by the SEC. • The SEC requires such a prospectus to contain a notice — printed in distinctive red lettering — that the document is not complete or final. That notice, which is usu. stamped or printed in red ink, typically reads as follows: “The information here given is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities cannot be sold — and offers to buy cannot be accepted — until the registration statement becomes effective. This prospectus does not constitute an offer to buy. And these securities cannot be sold in any state where the offer, solicitation, or sale would be unlawful before registration or qualification under the securities laws of that state.”
— Also termed red-herring prospectus; red herring. [Cases: Securities Regulation 25.51.]
