In the underwriting process, what is the quiet period for?

Is it for the company management to be quiet, or is it for the investment bank underwriter?

The SEC demands that the company issue no information that is not in the prospectus from the time that the prospectus is filed until 25 days after the IPO. This is so that the company cannot hold back important information and release it at a time where they will affect prices.

The IPO's underwriters are also restricted in the same way. Research reports from underwriters are held until the quiet period ends.

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It is for the Company management to keep quiet.

The answer is actually, both.

Management and the underwriting syndicate both go through the quiet period.

The quiet period is essentially to limit communications during the period when the Red Herring and prospectus are being circulated. A quiet period is not mandatory, but self-enforced, to keep liability down. The prospectus is supposed to be the sole sales solicitation document with all material information inside it. It has been gone through with a fine toothed comb by numerous lawyers, bankers and other interested parties. Loose lips can open you up to litigation, which is especially brutal on IPOs.

Common law has winning litigants being made whole for all capital losses since the IPO. Hence, a bank or company executive can be on the hook for tens of millions of dollars if they don't keep their mouths shut.