Big Boy Letter

A Big Boy Letter is a type of agreement used in private securities transactions, particularly in situations where one party possesses material non-public information (MNPI) about the securities being traded. The letter acknowledges that the buyer and seller are both sophisticated investors ("big boys") and that the buyer is aware of the potential information asymmetry but agrees to proceed with the transaction regardless.

Example

In a private transaction where a large institutional investor sells shares of a company to another, the seller may use a Big Boy Letter to ensure that the buyer cannot later claim they were misled by not having access to certain non-public information.