|
|
|
CLAIMS AGAINST SECURITIES BROKERS AND INVESTMENT ADVISERS  |
|
Brokers have a duty to recommend only investments suitable to their customers under SEC Rule 10b5. NASD Rule 2310 provides, (a) In recommending to a customer the purchase, sale or exchange of any security, a member shall have reasonable grounds for believing that the recommendation is suitable for such customer upon the basis of the facts, if any, disclosed by such customer as to his other security holdings and as to his financial situation and needs. (b) Prior to the execution of a transaction recommended to a non-institutional customer...a member shall make reasonable efforts to obtain information concerning: (1) the customer's financial status, (2) the customer's tax status; (3) the customer's investment objectives; and (4) such other information used or considered to be reasonable by such member or registered representative in making recommendations to the customer. NYSE Rule 405 provides, Every member organization is required...to (1) Use due diligence to learn the essential facts relative to every customer, every order, every cash or margin account accepted or carried by such organization.... Besides a security being unsuitable for an investor other things may be unsuitable. For instance, the use of margin or over concentration of a portfolio in certain industries may be unsuitable.
|| See My Business Law Web Site || || See My Probate Web Site || See My Wills, Trusts, and Estate Planning Web Site ||
|
|
Donald M.
Thompson * 55 W. Monroe #3950; Chicago, IL 60603 |
