General
spinning
What does spinning mean?
A bribery dressed as an allocation. The bank hands a corporate exec personal shares in a red-hot IPO that's guaranteed to pop, the exec flips for an easy six figures, and a few months later their company hires that same bank for its next deal. Banned by FINRA Rule 5131 after Frank Quattrone made it famous in the dot-com era.
"The Quattrone case put spinning on the front page — every bulge bracket had been doing it."
Origin
Surfaced publicly in the late 1990s tech-IPO boom; formally banned by NASD/FINRA in 2003.
Frequently asked questions
What does "spinning" mean in finance?
It's the practice of slipping hot IPO shares to executives in order to win their company's banking business.
How do you use "spinning" in a sentence?
"The bank was accused of spinning shares to executives to lock in future deals."
Is spinning legal?
It's widely regarded as an abusive, conflict-of-interest practice and has drawn regulatory scrutiny in the finance world.
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