A big boy letter is a pre-sale agreement in connection with a private sale of securities (such as in a PIPE transaction) not to sue over non-disclosure of material inside information that is not disclosed, entered into between two sophisticated parties.
The legality of big boy letters themselves in the United States Securities markets is a matter of dispute.
The United States Court of Appeals for the Second Circuit, which includes the financial district of New York, has enforced agreements similar to big boy letters strictly against the buyer.
The United States Court of Appeals for the Third Circuit, which includes Delaware, which is the state of incorporation for many publicly held companies, has given greater weight to the anti-waiver provisions of the Securities Exchange Act, although it has not completely ignored these agreements in considering all facts and circumstances of a transaction.
As of 2008, Commissioners and staff from the Securities and Exchange Commission have expressed concern about the legal enforceability of big boy letters.