|The Devil’s Advocate™|
(Also: “offering circular”; “offering memorandum”; “information memorandum”): A long document describing some securities which no-one reads, but which managers are nonetheless convinced presents them with risk of huge liability. Much of it accordingly comprises disclaimers, and there is a specific legal department employee — a red-herring ninja — who can make an entire living in the cool, nourishing foliage of such a document.
If 400 pages of 9 point Times New Roman describing a collateralised debt obligation were not dreary enough — and be assured, readers, it is dreary enough — large swathes of it, concerning such crushingly on-point topics as its non-justiciability in jury trials, will be addressed in BLOCK CAPITALS to RESIDENTS OF NEW HAMPSHIRE, a constituency that appears perpetually in need of being shouted at.
A draft version of a prospectus — sometimes released for pre-marketing purposes — is called a “red herring” not, as you would think, in frank acknowledgment that is an impenetrable tract that will distract a reader from whatever she ought to be doing for an unconscionably long time and without perceptible benefit — though only once — but on account of an angry red disclaimer written down the margin of the cover warning anyone who should pick it up that it is not to be trusted.