FINRA Sales Practice Violations - Transcript

So there are many many sales practice violations ranging from high pressure sales tactics we used to see that a lot in the Boiler Room days uh where the Wolf of Wall Street used to really put pressure on investors that they had to get in urgently quickly and all of that unauthorized trading you know a broker has to ask you on the same day as the trade whether you want to make the investment on that day at that price and of course prices prices vary but but they need to be on the same day churning meaning over trading the account there are rules that cover you know the broker shouldn’t be making more in the account than you are um there’s also rules on suitability which has been now revamped through regulation best interest there’s over concentration rules you shouldn’t be in more than a certain amount of one sector of investment meaning for example oil and gas you don’t want a portfolio that’s overweighted in oil and gas or overweighted in technology sectors that tend to move a lot because then you don’t have a well-diversified portfolio in your portfolio is going to be highly volatile so those are examples of sales issues in the finra conduct rules.