SEC Passes FINRA Know Your Customer and Suitability Rule

Representing Investors Nationwide

The SEC recently passed a new rule that takes the place of prior NYSE and FINRA rules regarding a broker’s obligation to know his customer and only recommend investments which are suitable for him/her.

The obligation stems from a customers new account form which set forth stated goals and objectives for the money as well as risk tolerances. Should the broker recommend securities that are inconsistent with these stated goals, a violation occurs and provides a basis for filing a FINRA arbitration claims.

The new FINRA rule may be found at: http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p122778.pdf

The attorneys at Colling Gilbert Wright & Carter are currently investigating and filing arbitration claims on behalf of customers who lost money during the 2007-2008 market crash due to investments that were not suitable for them. If you believe you lost money due to broker negligence or fraud, please contact our office for a free case evaluation. Thank you.