Wall-crossing (Finance)
Wall-crossing in finance involves sharing confidential, material non-public information with potential investors during a capital raise, requiring strict adherence to insider trading regulations.
Tumisang Bogwasi
Tumisang Bogwasi
What is Wall-crossing (Finance)?
Wall-crossing in finance refers to the process where an investment bank or issuer shares confidential, material non-public information (MNPI) with a select group of institutional investors before a secondary offering or other capital markets transaction. This procedure is undertaken to gauge investor interest and secure commitments, facilitating an efficient capital raise.
This practice is highly regulated due to the inherent risks of insider trading. Investors who receive MNPI are said to have “crossed the wall” and become temporary insiders, subject to strict trading restrictions. They are typically placed on a restricted list and cannot trade in the securities of the issuer until the information is made public or the transaction is abandoned and they are
