INVESTMENT BANKING

investment banking. The business of underwriting or selling securities; esp., the marketing of new stocks or bonds.

“The term ‘investment banking’ can be used to encompass [underwriting, and acting as a dealer, broker, and market maker], and any person in a firm performing any of those functions could be called an investment banker. By convention, however, those terms are used less broadly. In large securities firms, for example, there are a number of departments. The one most visible to the public handles trades for individuals. The technical term for the persons working with customers in that department is ‘registered representative,’ but those persons are often called brokers or stockbrokers. Insiders would not call them investment bankers. A department almost invisible to the public handles underwritings and performs a wide range of services primarily for client companies. Among those are: (1) assisting companies in the sale of securities, almost always in large amounts, to such private purchasers as insurance companies; (2) finding acquisition partners for companies that wish to acquire or be acquired by others; and (3) giving financial advice of various sorts to client companies. That department is likely to be called the investment banking department. In any case, its functions are at the heart of the insiders’ conception of investment banking.” Larry D. Soderquist & Theresa A. Gabaldon, Securities Law 30 (1998).