While manipulation of security prices is normally illegal, the SEC allows underwriters to temporarily support the price of stocks that they have brought to market.

Question

Quizplus · Accepted Answer

The statement is true. The SEC allows underwriters to engage in a practice called "stabilizing" to prevent the price of new securities from falling below the offering price. However, this support is only temporary and must be disclosed to investors.

While Manipulation of Security Prices Is Normally Illegal, the SEC