undisclosed principal


Also found in: Financial.

undisclosed principal

n. a person who uses an agent for his/her/its negotiations with a third party, often when the agent pretends to be acting for himself/herself. As a result, the third party does not know he/she can look to the real principal in any dispute. (See: principal, agent)

undisclosed principal

a person of whose existence a third party is unaware so that the third party does not know that the person with whom he is dealing is an agent. So far as he is concerned, the agent is really a principal dealing on his own behalf and in his own name. There is no duty on a third party to enquire whether there is an undisclosed principal. See AGENCY.
References in periodicals archive ?
They are charged with engaging in prohibited and undisclosed principal transactions, among other violations.
NEW YORK, June 16, 2014 /PRNewswire/ -- Labaton Sucharow LLP, which established the first national practice exclusively dedicated to representing Securities and Exchange Commission (SEC) whistleblowers, announces that the SEC today filed a precedent-setting enforcement action charging Paradigm Capital Management and Candace King Weir, the firm's CEO, with engaging in prohibited and undisclosed principal transactions, among other violations.
This would force Rothschild and Davina -- two offshore entities which are apparently acting for undisclosed principals or beneficiaries -- to disclose who they are fronting for (and who is behind Defendant Concorde Trust, of which Rothschild is the trustee).