Each state has its own securities laws. The following are selected sections of the Illinois securities laws that are generally applicable in FINRA arbitrations.
Section 130.850 Account Transactions
a)No dealer or salesperson shall effect transactions for any customer’s account which are excessive in size or frequency or unsuitable in view of the financial resources of the customer.
710 IAC 1-16-22 Dishonest or unethical practices
Authority: IC 23-2-1-15
Affected: IC 23-2-1-11
Sec. 22. (a) Investment advisers and investment adviser representatives are fiduciaries and have a duty to act primarily for the benefit of their clients. While the extent and nature of this duty varies according to the nature of the relationship between an investment adviser or an investment adviser representative and his or her clients and the circumstances of each case, an investment
adviser or an investment adviser representative shall not engage in unethical or dishonest business practices. Each of the following actions or activities shall constitute an unethical or dishonest practice within the meaning of IC 23-2-1-11(a)(6) [IC 23-2-1 was repealed by P.L.27-2007, SECTION 37, effective July 1, 2008.]:
(1) Recommending to a client to whom investment supervisory, management, or consulting services are provided, the purchase, sale, or exchange of any security without reasonable grounds to believe that the recommendation is suitable for the client on the basis of information furnished by the client after reasonable inquiry concerning the client’s investment objectives, financial situation, and needs, and any other information known or acquired by the client’s financial records as may be provided to the investment adviser.
(5) Inducing trading in a client’s account that is excessive in size or frequency in view of the financial resources, investment objectives, and character of the account.
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 http://www.whitesecuritieslaw.com.