Introduction

The Regulatory Framework

Regulatory Structure Of The Securities Industry

Federal Securities Laws

State Securities Laws

Other Regulations

The Role Of The Self-Regulatory Organizations (SROs)

Exercises: Understanding the Regulatory Structure

Federal Securities Laws

Section 9: Prohibition Against Manipulation of Security Prices

Section 10: Regulation Of The Use Of Manipulative And Deceptive Devices

Section 28(e) of the Securities Exchange Act of 1934

Federal Securities Laws Exercises

The Employee Retirement Income Security Act (ERISA)

The NASD’S Conduct Rules

Rule 2110: Standards of Commercial Honor and Principles of Trade

Rule 2310: Recommendations to Customers (Suitability)

Rule 3120: Use of Information Obtained in a Fiduciary Capacity

Rule 3060: Influencing or Rewarding Employees of Others

Rule 2230: Confirmations

Rule 2240: Disclosure of Control Relationship with Issuer

Rule 2120: Use of Manipulative, Deceptive or Other Fraudulent Devices

Rule 2330: Customers’ Securities or Funds

Rule 3110: Books and Records

Rule 2740: Selling Concessions, Discounts and Other Allowance

Rule 2420: Dealing With Non-Members

Rule 3010: Supervision

Rule 3050: Transactions for or by Associated Persons

Rule 2210: Communications With the Public

Rule 2711: Research Analysts and Research Reports

Rule 3040: Private Securities Transactions of an Associated Person

Rule 3030: Outside Business Activities of an Associated Person

Case Study: Martin Jones

Case Study: Ben Frank & Co.

Case Study: John Adams

Insider Trading

Who is Covered by Insider Trading Restrictions

Use of Confidential Information

Front Running Client Transactions

Penalties for Insider Trading

Case Study: Insider Trading

Supervision Issues For Sales Managers

Chain of Command and Accountability

Compliance Issues for the Sales Manager

Monitoring Client Inquiries/Complaints

Case Study: Supervision

Regulatory Audits Or Inquiries

Visits From Your SRO, the SEC, and State Securities Agencies

Who to Notify in the Home Office

What to Do

How to Respond to “On-Site” Visits

Subpoenas, Document Requests, etc.

The Chain of Command

Registration Issues

Documentation Required

Disqualifications

When to Amend a Form U-4

Termination and the Form U-5

Licensing Requirements

Quiz