▁paid ▁up front ▁to ▁the ▁iss uer , ▁or ▁other ▁favor able ▁terms , ▁the ▁iss uer ▁may ▁agree ▁to ▁make ▁the ▁under writer ▁the ▁exclusive ▁agent ▁for ▁the ▁initial ▁sale ▁of ▁the ▁se cur ities ▁instrument . ▁That ▁is , ▁even ▁though ▁third - party ▁buy ers ▁might ▁approach ▁the ▁iss uer ▁directly ▁to ▁buy , ▁the ▁iss uer ▁agre es ▁to ▁sell ▁exclus ively ▁through ▁the ▁under writer . ▁ ▁In ▁summary , ▁the ▁se cur ities ▁iss uer ▁gets ▁c ash ▁up ▁front , ▁access ▁to ▁the ▁contacts ▁and ▁sales ▁channels ▁of ▁the ▁under writer , ▁and ▁is ▁ins ulated ▁from ▁the ▁market ▁risk ▁of ▁being ▁unable ▁to ▁sell ▁the ▁se cur ities ▁at ▁a ▁good ▁price . ▁The ▁under writer ▁gets ▁a ▁profit ▁from ▁the ▁markup , ▁plus ▁the ▁possibility ▁of ▁an ▁exclusive ▁sales ▁agreement . ▁ ▁Also ▁if ▁the ▁se cur ities ▁are ▁pr iced ▁significantly ▁below ▁market ▁price ▁( as ▁is ▁often ▁the ▁custom ), ▁the ▁under writer ▁also ▁cur ries ▁favor ▁with ▁powerful ▁end ▁customers ▁by ▁grant ing ▁them ▁an ▁immediate ▁profit ▁( see ▁f li pping ), ▁perhaps ▁in ▁a ▁qu id ▁pro ▁qu o . ▁This ▁practice , ▁which ▁is ▁typically ▁just ified ▁as ▁the ▁reward ▁for ▁the ▁under writer ▁for ▁taking ▁on ▁the ▁market ▁risk , ▁is ▁occasionally ▁critic ized ▁as ▁un eth ical , ▁such ▁as ▁the ▁alleg ations ▁that ▁Frank ▁Qu attr one ▁acted ▁impro per ly ▁in ▁dol ing ▁out ▁hot ▁IP O ▁stock ▁during ▁the ▁dot ▁com ▁b ubble