Month: March 2013

Stop and Stop Limit Orders – FINRA Regulatory Notice 12-50

The Securities and Exchange Commission has approved amendments relating to stop orders in customer accounts, with an effective date of January 21, 2013.  This Regulatory Notice addresses new FINRA Rule 5350 (Stop Orders), which replaces the stop order provisions of FINRA Rule 6140(h).   Many investors have been lulled into a sense of false security […]

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Supervisory Red Flags Under FINRA Rule 2111

Rule 2111 of the Financial Industry Regulatory Authority (FINRA) requires firms to have a supervisory system to focus on the detection, investigation and follow-up of “red flags” indicating that a Registered Representative may have recommended an unsuitable investment strategy with both a security and a non-security component.  For example, a Registered Representative’s recommendation that a […]

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Supervisory Red Flags Under Rule 2111

The Notice requires firms to have a supervisory system to focus on the detection, investigation and follow-up of “red flags” indicating that a Registered Representative may have recommended an unsuitable investment strategy with both a security and a non-security component.  For example, a Registered Representative’s recommendation that a customer with limited means purchase a large […]

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FINRA Announces Requirement of Heightened Supervision of Complex Products in NASD Notice to Members 12-03

The Financial Industry Regulatory Authority (FINRA) has recently defined complex products to include many of the investment vehicles whose risks were exposed during the financial crisis of 2008-2009.  Examples of complex products include the following:   Asset-backed securities secured by a pool of collateral, such as mortgages, payment from consumer credit cards, or future royalty […]

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