Possible Inappropriate Activity

or Register to post new content in the forum

 

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Nov 1, 2005 9:31 am

In an account with probable inappropriate activity and, consequently, excessive commissions, can a firm use the fact that "she made money" as an excuse for not taking action? If the firm takes that stance, what is the obligation of the broker? Thanks.

Nov 1, 2005 1:57 pm

That depends.


If you're talking about too much trading aka churning, were the trades solicited (broker asked client to do trade) or unsolicited (client asked broker). What type of account is it (discretionary or non discretionary).


If federal securities laws are violated, there's NO excuse a firm can take for not taking action.


If you happen to be a broker and this happens to be your client and you're a little nervous, I suggest you find a good securities lawyer to discuss this with.

Nov 1, 2005 3:55 pm
Mayfield:

In an account with probable inappropriate activity and, consequently, excessive commissions, can a firm use the fact that "she made money" as an excuse for not taking action? If the firm takes that stance, what is the obligation of the broker? Thanks.


With the disclaimer that I am not a securities lawyer, it would be my understanding that profits do not justify excessive trading.....