Definition of Form 4

What is the definition of the term "Form 4"? What is a "Form 4" and why are they filed with the SEC?

A Form 4 must be filed with the SEC when a company insider reports a change in their ownership situation.

For instance - let's say that Joe Smith is the CFO of XYZ, Inc. and owns 1,000,000 shares of XYZ, Inc. stock.

Definition of term Form 4 - Financial Dictionary - Stock MarketsCFO Joe Smith decides that he is going to sell 50,000 shares of XYZ, Inc. This sale must be reported within two business days to the SEC through the filing of the Form 4.

Let's look at some other examples of when a Form 4 would need to be filed:

-company insider (director, officer, owner of more than 10% of a class of equity securities) decides to purchase shares of the company on the open market

-company insider decides that they are going to exercise a number of their stock options

-company insider decides to gift a portion of their stock holdings to a charitable foundation


Many Form 4 filings are uploaded to the SEC's web site every day, and all of this filings are available, free of charge, to the general public.

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