During an IPO, an underwriter attempts to stabilize a stock by purchasing in the open market at a price above the public offering price. What is the regulatory consequence?

1. AThere is no consequence if the price is disclosed in the prospectus.
2. BThe SEC may allow this practice during extreme volatility.
3. CThe underwriter may be required to file a Form 8-K.
4. DThis is a violation of Regulation M and may result in sanctions or fines.✓ Correct answer

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