FINRA Addresses Complex and Non-Traditional Investments


The past few years of unstable financial
markets, while
yielding fixed income products and declining interest rates, have seen an
explosion of investment products.  Many
of these investment products are structured or packaged investments, which do
not have a readily-available market and which cannot be priced.  The Financial
Industry Regulatory Authority
(FINRA) has addressed the various aspects of various directives which would
encompass such products, including NASD Notice to Members 03-70,
05-26,
and
12-03. 



 


Likewise, FINRA’s new suitability Rule
2111
, effective July
9, 2012, imposes an obligation on FINRA-registered brokers to “have a
reasonable basis to believe that a recommended transaction or investment
strategy involving a security or securities is suitable for the customer, based
upon the information obtained through the reasonable diligence of the member or
associated person, to ascertain the customer’s investment profile.” 


 


This new suitability rule requires that
FINRA-registered
brokers, when considering the customer’s investment profile, assess the
customer’s age, other investments, financial situation and needs, tax status,
investment objectives, investment experience, investment time horizon,
liquidity needs, risk tolerance, and any other information the customer may
disclose to the member or associated person in connection with such
recommendation.


 


We offer a free initial consultation to
customers who feel
they may have been improperly sold non-conventional investments, new products,
or complex products.



 


The Law Offices of
Timothy J. O’Connor is one of the only law firms practicing securities law in
the Tri-City Capital District of Albany,
Schenectady and
Troy
.  We also represent victimized investors
throughout the rest of New York State, including Buffalo, Binghamton, Syracuse,
Watertown, Utica, Kingston, New York City/Manhattan, Long Island, and
everywhere in between, as well as in the surrounding states of Massachusetts,
Vermont, New Hampshire, Connecticut, and New Jersey.




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