Louisiana Administrative Code › Title 10 - FINANCIAL INSTITUTIONS, CONSUMER CREDIT, INVESTMENT SECURITIES AND UCC › Part XIII - Investment Securities › Subpart 1 - Securities › Chapter 12 - Dishonest or Unethical Practices › Section XIII-1203 - Dealers and Salesmen

Current through Register Vol. 50, No. 6, June 20, 2024
A.
Dealers and Salesmen
-
i ncludes the
				  following actions:
1. engaging in a pattern of
				  unreasonable and unjustifiable delays in the delivery of securities purchased
				  by any customer or in the payment upon request of free credit balances
				  reflecting completed transactions of any customer;
2. inducing trading in a customer's account
				  which is excessive in size or frequency in view of the financial resources and
				  character of the account;
3.
				  recommending to a customer the purchase, sale or exchange of a security without
				  reasonable grounds to believe that the transaction or recommendation is
				  suitable for the customer based upon reasonable inquiry concerning the
				  customer's investment objectives, financial situation and needs and other
				  relevant information known by the dealer;
4. executing a transaction on behalf of a
				  customer without authorization to do so;
5. exercising discretionary power in
				  effecting a transaction for a customer's account without first obtaining
				  written discretionary authority from the customer, unless the discretionary
				  power relates solely to the time or price, or both, for the execution of
				  orders;
6. executing a transaction
				  in a margin account without securing from the customer a properly executed
				  written margin agreement promptly after the initial transaction in the
				  account;
7. failing to segregate
				  customers' free securities or securities held in safekeeping;
8. hypothecating a customer's securities
				  without having a lien thereon unless the dealer secures from the customer a
				  properly executed written consent promptly after the initial transaction,
				  except as permitted by rules of the Securities and Exchange
				  Commission;
9. entering into a
				  transaction with or for a customer at a price not reasonably related to the
				  current market price of the security or receiving an unreasonable commission or
				  profit;
10. failing to furnish to a
				  customer purchasing securities in an offering, no later than the date of
				  confirmation of the transaction, either a final prospectus or a preliminary
				  prospectus and an additional document, which together include information set
				  forth in the final prospectus;
11.
				  charging unreasonable and inequitable fees for services performed, including
				  miscellaneous services such as collection of monies due for principal,
				  dividends or interest, exchange or transfer of securities, appraisals,
				  safekeeping or custody of securities and other services related to its
				  securities business;
12. offering
				  to buy from or sell to a person a security at a stated price unless the dealer
				  or salesman is prepared to purchase or sell the security at such price and
				  under the conditions that are stated at the time of the offer to buy or
				  sell;
13. representing that a
				  security is being offered to a customer at the market'' or a price relevant to
				  the market price unless the dealer or salesman knows or has reasonable grounds
				  to believe that a market for the security exists other than that made, created
				  or controlled by the dealer, or by a person for whom the dealer is acting, or
				  by a person with whom the dealer is associated in the distribution, or by a
				  person controlled by, controlling or under common control with the
				  dealer;
14. effecting a transaction
				  in, or inducing the purchase or sale of, a security by means of a manipulative,
				  deceptive or fraudulent device, practice, plan, program, design or contrivance,
				  which may include:
a. effecting a transaction
				  in a security which involves no change in the beneficial ownership
				  thereof;
b. entering an order for
				  the purchase or sale of a security with the knowledge that an order of
				  substantially the same size, at substantially the same time, and substantially
				  the same price, for the sale of the security, has been or will be entered by or
				  for the same or different parties for the purpose of creating a false or
				  misleading appearance of active trading in the security or a false or
				  misleading appearance with respect to the market for the security. Nothing in
				  this subsection prohibits a dealer from entering bona fide agency cross
				  transactions for its customers;
c.
				  effecting, along or with one or more other persons, a series of transactions in
				  a security creating actual or apparent active trading in the security or
				  raising or depressing the price of the security, for the purpose of inducing
				  the purchase or sale of the security by others;
15. guaranteeing a customer against loss in a
				  securities account of the customer or in a securities transaction effected with
				  or for the customer;
16. publishing
				  or circulating, or causing to be published or circulated, a notice, circular,
				  advertisement, newspaper article, investment service or communication of any
				  kind which purports to report a transaction as a purchase or sale of a security
				  unless the dealer or salesman believes that the transaction was a bona fide
				  purchase or sale of the security; or which purports to quote the bid price or
				  asked price for a security, unless the dealer believes that the quotation
				  represents a bona fide bid for, or offer of, the security;
17. using an advertising or sales
				  presentation in such a fashion as to be deceptive or misleading;
18. failing to disclose that the dealer is
				  controlled by, controlling, affiliated with, or under common control with the
				  issuer of a security before entering into a contract with or for a customer for
				  the purchase or sale of the security. If the disclosure is not made in writing,
				  it shall be supplemented by the giving or sending of written disclosure at or
				  before the completion of the transaction;
19. failing to make a bona fide public
				  offering of all of the securities allotted to a dealer for distribution,
				  whether acquired as an underwriter, a selling group member or from a member
				  participating in the distribution as an underwriter or selling group
				  member;
20. failure or refusal to
				  furnish a customer, upon reasonable request, information to which he is
				  entitled, or to respond to a formal written request or complaint;
21. failing to comply with an applicable
				  provision of the Rules of Fair Practice of the Financial Industry Regulatory
				  Authority or an applicable fair practice or ethical standard promulgated by the
				  Securities and Exchange Commission or by a self-regulatory organization
				  approved by the Securities and Exchange Commission;
22. engaging in the practice of lending or
				  borrowing money or securities from a customer, or acting as a custodian for
				  money, securities or an executed stock power of a customer without proper
				  authority to do so;
23. effecting
				  securities transactions not recorded on the regular books or records of the
				  dealer, unless the transactions are authorized in writing by the dealer prior
				  to execution of the transaction;
24. establishing or maintaining an account
				  containing fictitious information in order to execute transactions which would
				  otherwise be prohibited;
25.
				  sharing directly or indirectly in profits or losses in the account of a
				  customer without the written authorization of the customer;
26. dividing or otherwise splitting a
				  salesman's commissions, profits or other compensation from the purchase or sale
				  of securities with a person not also registered as a salesman for the same
				  dealer, or for a dealer under direct or indirect common control.