Series 24: Conflicts Of Interest Disclosure: Customer Transactions

Conflicts of Interest Disclosure: Customer Transactions

Section 15(c)(1) of the Exchange Act prohibits brokers and dealers from effecting any transaction or attempting to effect the transaction of any over-the-counter security by means of any manipulative, deceptive or other fraudulent device. Two SEC rules define the failure to divulge a conflict of interest as constituting such a manipulative, deceptive or other fraudulent device.

Rule 15c1-5 states that any broker or dealer that is controlled by, controlling or under common control with the issuer of a security which it is encouraging a customer to buy or sell must disclose that relationship