Chapter 17 - Professional Conduct and Ethical Concerns
Terms in this set (16)
the legal document disclosing material information concerning an offering of a security and its issuer. Submitted to SEC under Sec Act of 33
a disclosure document that details a company's plans, history, officers, and risks of investment. It's the red herring plus the POP and the effective date
an advertisement allowed during the cooling-off period to announce an offer of securities, listing the issuer, the type of security, the underwriters, and directions for obtaining a prospectus
Insider Trading & Securities Fraud Enforcement Act
an Act of Congress that addresses insider trading and lists the penalties for violations of the Act.
the separation that is supposed to exist between the investment banking department and the traders and registered representatives in order to prevent insider trading violations
the illegal process of using deception or collusion to move securities prices in favor of the conspirators
a form of market manipulation that involves trying to decrease the value of a security, often so that call sellers will not be called. A violation.
a form of market manipulation in which parties illegally try to raise the price of a stock to a particular target, often to force the put options the parties have written on the stock to go out-of-the-money. A violation
Trust Indenture Act of 1939
the corporate bond issues in excess of $5 million with maturities greater than 1 year must be issued with an indenture
the illegal practice of trying to move a stock's market price by publishing unfounded allegations about the issuer
a violation that occurs when a registered representative offers investment opportunities not sponsored by the firm.
any compensation paid directly or indirectly from whatever source in connection with or as a result of the purchase or sale of a security, including, though not limited to, commissions; finder's fees; securities or rights to acquire securities; rights of participation in profits, tax benefits, or dissolution proceeds, as a general partner or otherwise; or expense reimbursements
Code of Procedure
FINRA system for enforcing member conduct rules
Code of Arbitration
FINRA method of resolving disputes (usually money) in the securities business. All decisions are final and binding on all parties
informal process of dispute resolution that sometimes avoids arbitration claims
Insider traders may be penalized up to ______ times the amount of their profit or their loss avoided by using inside information