January 17, 2011 Comments (0) Blog, Securities Fraud

Proposed Amendment to FINRA Rule 5122

(Last Updated On: July 17, 2015)

FINRA is requesting comment on a proposal to amend FINRA Rule 5122, which requires, subject to certain exemptions, disclosure in the offering document of the intended use of offering proceeds, expenses, and the amount of selling compensation to be paid to the broker-dealer and its associated persons, in any private placement in which a participating broker-dealer (or its control entity) is the issuer.

Private placements are often one of the higher commission products sold by brokerage firms and the proposed amendment to the rule is likely in response to the high number of private placements that were sold over the last couple of years by brokerage firms.  Some of these private placements, like Medical Capital and Provident Royalties, were sold by brokerage firms even though it appears that these investments were fraudulent.  Perhaps if the commissions brokerage firms earned in recommending these investments had been more adequately disclosed, investors would not have invested in them.

If you have questions regarding about a private placement you purchased, the securities attorneys of The White Law Group may be able to help.  For a free consultation, call the firm’s Chicago office at 312-238-9650.

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.

-->