When a corporation wishes to issue certain securities, it must provide sufficient information for an unsophisticated investor to evaluate the financial risk involved. Specifically, the law imposes liability for making a false statement or omission that is "material." What sort of information would an investor consider material?

Generally unsophisticated investors are concerned with facts that would make them reject buying the stocks or securities specially regarding certain conditions of the corporation, e. g.:

changes in dividends policies changes int he corporation's financial condition corporation's liabilities and pending lawsuits loans to managers or directors high amount of customer delinquency new developments or products other important and relevant information