Each state has its own securities laws. The following are selected sections of the New Hampshire securities laws that are generally applicable in FINRA arbitrations.
421-B:3-a Suitability of Recommendation; Reasonable Grounds Required. –
I. In recommending to a customer the purchase, sale, or exchange of a security, a broker-dealer or broker-dealer agent must have reasonable grounds for believing that the recommendation is suitable for the customer upon the basis of the facts, if any, disclosed by the customer after reasonable inquiry as to his or her other security holdings and as to his or her financial situation and needs.
II. Before the execution of a transaction recommended to a noninstitutional customer, other than transactions with customers where investments are limited to money market mutual funds, a broker-dealer, salesperson, investment adviser, or investment adviser representative shall make reasonable efforts to obtain information concerning:
(a) The customer’s financial status.
(b) The customer’s tax status.
(c) The customer’s investment objectives.
(d) Such other information used or considered to be reasonable by the broker-dealer, salesperson, investment adviser, or investment adviser representative in making recommendations to the customer.
II. For purposes of this section, a fraudulent or deceptive device or contrivance shall include, but shall not be limited to:
(b) Inducing excessive trading in a customer’s account, or inducing trading beyond that customer’s known financial resources.
If you have questions about a state securities law, The White Law Group may be able to help. The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions.
For more information on The White Law Group, please visit our website at https://whitesecuritieslaw.com.Tags: 421-B:3-a, Boca Raton, broker dealer, broker fraud, Chicago, excessive trading, FINRA, Florida, Illinois, investment losses, investor protection, NASD, New Hampshire securities laws, SEC, Securities Attorney, securities compliance, securities regulation, stockbroker, suitability Last modified: July 17, 2015