"Chris, are you saying Auric broke laws? Be very careful with such statements. Now I told you I have no knowledge about him being a broker. Please show me some proof. BTW, I do not know the answer but is a broker required to disclose anything if posting on the net? Please supply proof."
Proof: Call the NASDR for yourself and ask them to give you the CRD# for Stephen N. Worthington. Now - as for the rules and regulations that limit brokers comunicating via electronic media - here are a few that I've gathered so far: (I haven't search the SEC databases yet, but I have asked the SEC for assistence in finding the regulations and other Federal Laws that might pertain to registered brokers communicating on the internet):
Electronic Communications
Members must ensure that communications with the public disseminated through electronic media comply with the approval, recordkeeping, and filing requirements of NASD® Rules. For more information, see “Ask the Analyst About Electronic Communications” in the April 1996 issue of the NASD Regulatory & Compliance Alert for a detailed description of the applicability of NASD Rules to various methods of electronic communication, including World Wide Web sites, bulletin boards, group and individual e-mail, and chat rooms. Members should also review Notices to Members 95-74, which announced the amendment of the definitions of “advertisement” and “sales literature” in NASD Rules to include electronic messages. Members are reminded that all communications with the public, regardless of the medium, are subject to the antifraud provisions of the federal securities laws, SEC rules, and NASD Rules. In this connection, we would clarify that e-mail directed only to an individual customer, like a piece of written correspondence sent to an individual customer, is not “advertising” or “sales literature” subject to NASD Rule 2210 (formerly Article III, Section 35 of the NASD Rules of Fair Practice).
Suitability
NASD Rule 2310 (formerly Article III, Section 2 of the NASD Rules of Fair Practice) provides that in recommending to a customer the purchase, sale, or exchange of any security, a member must have reasonable grounds for believing that the recommendation is suitable for such customer on the basis of the facts available, including the customer’s other security holdings, financial situation, and needs. If a principal source of a member’s information about a recommended security is the Internet, on-line communications, or other electronic medium, the member should consider the need for further investigation or research before recommending the security. In general, members should review carefully the appropriateness of transactions in such securities, and should encourage customers to learn about such securities before investing in them.
Special care should be taken where a member or associated person transmits via e-mail, television, radio, or other electronic medium messages concerning a particular security to a broad universe of investors of varying financial sophistication, experience, and resources. In such circumstances, the suitability of the security should be determined with respect to each customer who responds to the message before effecting a transaction. Further, consideration should be given to the desirability of including a notice in the electronic transmission alerting the recipients of the message to the need to assess the security in the context of each customer’s individual circumstances.
Disclosure Of Material Adverse Facts And Interests To Customers
When a registered representative recommends the purchase or sale of a security to a customer, he or she must not only avoid affirmative misstatements, but also must disclose material adverse facts about which the salesperson is, or should be, aware. This obligation includes disclosing any conflicts of interest that could influence the salesperson’s recommendation or the customer’s decision to purchase or sell the security. Particular care should be taken with respect to the accuracy and completeness of information concerning securities that have been promoted on the Internet or other electronic media.
Supervision
Members that use electronic media to communicate with customers and investors as to the merits of particular securities must ensure that their supervisory procedures appropriately cover these activities. In a broader context, members should consider the need for specific policies that address how and under what circumstances their associated persons are permitted to use such electronic media to communicate with investors. The need for supervision is particularly acute where the communication medium permits the transmission of anonymous messages to “ chat rooms” or “bulletin boards” sponsored by various on-line services connected to the Internet.
Members are reminded that their internal controls and supervisory procedures should be designed to ensure that associated persons do not misuse electronic communications systems or engage in any misconduct while on-line. NASD Regulation currently is conducting a review of the need for further explicit guidance or regulatory action regarding the supervisory responsibilities of member firms in this respect. |
