Rule 10b-5 Representation (M&A Glossary)

Summary

A target’s or seller’s representation and warranty in a purchase agreement that the information provided by it is complete and correct in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statement not misleading. The representation refers to Rule 10b-5, promulgated under Section 10(b) of the Securities Exchange Act of 1934. Public company merger agreements usually include a Rule 10b-5 representation to prevent the use of fraudulent, manipulative or deceptive practices in the sale of securities.