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What Related Party Transactions Reveal About Potential Conflicts of Interest

Reading SEC Filings • Beginner Investing • 6 min

When a company does business with its own CEO's family member, a board member's separately-owned company, or a major shareholder's other venture, that transaction gets a special disclosure category: a "related party transaction." The reason is straightforward: a close relationship between the parties creates real potential for the deal's terms to not reflect what an independent, unrelated party would have negotiated…

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