t2 - actually, since Auric is a registered broker, he cannot "just post" rumors that are out there, he is supposed to be held to a "higher standard." Rule 2210 (d) limits him, even though he is posting anonymously, to the rules of conduct expected of brokers. For reference, ANYTHING a broker publishes - anonymously or otherwise - is considered ADVERTISING.
Personal Posting vs. "Doing Business"
participation by RRs in investment-related bulletin boards, without identifying themselves as a such, is not specifically a violation of NASD rules However, the fact that an individual is registered subjects him/her to a higher standard than members of the general public. All supervision, recordkeeping, and conduct rules apply to RRs' activity on a bulletin board regardless of whether they identify themselves as RRs or not. There are no filing requirements under NASD Conduct Rule 2210 (c), but the General Standards under Rule 2210 (d), do apply to postings. In addition, RRs are accountable under NASD Conduct Rules and the federal securities laws for what they say regarding securities or services. Remember, postings that are not carefully constructed have the potential of crossing the line between being a reasonable opinion and an exaggerated or unwarranted claim. This type of concern might arise when touting or bashing a particular stock occurs.
Now in that parapgraph it cites the applicability of 2210 (d) to Registered Representatives communicating anonymously on message boards. Section of 2210 (d) seem to pop out as more applicable than others with the present subject in mind. I will copy only those portions that I believe are most applicable (for the full text of Rule 2210, please see this link: nasdr.com ):
NASD Conduct Rule 2210
RULE 2210
2210. Communications with the Public
(d) Standards Applicable to Communications with the Public
(1) General Standards
(A) All member communications with the public shall be based on principles of fair dealing and good faith and should provide a sound basis for evaluating the facts in regard to any particular security or securities or type of security, industry discussed, or service offered. No material fact or qualification may be omitted if the omission, in the light of the context of the material presented, would cause the advertising or sales literature to be misleading.
(B) Exaggerated, unwarranted or misleading statements or claims are prohibited in all public communications of members. In preparing such literature, members must bear in mind that inherent in investment are the risks of fluctuating prices and the uncertainty of dividends, rates of return and yield, and no member shall, directly or indirectly, publish, circulate or distribute any public communication that the member knows or has reason to know contains any untrue statement of a material fact or is otherwise false or misleading.
["C" snipped]
(D) In judging whether a communication or a particular element of a communication may be misleading, several factors should be considered, including but not limited to:
(i) the overall context in which the statement or statements are made. A statement made in one context may be misleading even though such a statement could be perfectly appropriate in another context. An essential test in this regard is the balance of treatment of risks and potential benefits.
(ii) the audience to which the communication is directed. Different levels of explanation or detail may be necessary depending on the audience to which a communication is directed, and the ability of the member given the nature of the media used, to restrict the audience appropriately. If the statements made in a communication would be applicable only to a limited audience, or if additional information might be necessary for other audiences, it should be kept in mind that it is not always possible to restrict the readership of a particular communication.
(iii) the overall clarity of the communication. A statement or disclosure made in an unclear manner obviously can result in a lack of understanding of the statement, or in a serious misunderstanding. A complex or overly technical explanation may be worse than too little information. Likewise material disclosure relegated to legends or footnotes realistically may not enhance the reader’s understanding of the communication.
(2) Specific Standards In addition to the foregoing general standards, the following specific standards apply:
(A) Necessary Data. Advertisements and sales literature shall contain the name of the member, unless such advertisements and sales literature comply with paragraph
(f). Sales literature shall contain the name of the person or firm preparing the material, if other than the member, and the date on which it is first published, circulated or distributed. If the information in the material is not current, this fact should be stated.
["B" snipped]
(C) Claims and Opinions. Communications with the public must not contain promises of specific results, exaggerated or unwarranted claims or unwarranted superlatives, opinions for which there is no reasonable basis, or forecasts of future events which are unwarranted, or which are not clearly labeled as forecasts.
["D" "E" and "F" snipped]
(G) Hedge Clauses. No cautionary statements or caveats, often called hedge clauses, may be used if they are misleading or are inconsistent with the content of the material.
["H" "I" and "J" snipped]
(K) Identification of Sources. Statistical tables, charts, graphs or other illustrations used by members in advertising or sales literature should disclose the source of the information if not prepared by the member.
["L" snipped]
(M) Comparisons. In making a comparison, either directly or indirectly, the member must make certain that the purpose of the comparison is clear and must provide a fair and balanced presentation, including any material differences between the subjects of comparison. Such differences may include investment objectives, sales and management fees, liquidity, safety, guarantees or insurance, fluctuation of principal and/or return, tax features, and any other factors necessary to make such comparisons fair and not misleading.
(N) Predictions and Projections. Investment results cannot be predicted or projected. Investment performance illustrations may not imply that gain or income realized in the past will be repeated in the future. However, for purposes of this Rule, hypothetical illustrations of mathematical principles are not considered projections of performance; e.g., illustrations designed to show the effects of dollar cost averaging, tax–free compounding, or the mechanics of variable annuity contracts or variable life policies. |
