Nebraska Administrative Code › Topic - BANKING AND FINANCE, DEPARTMENT OF › Title 48 - DEPARTMENT OF BANKING AND FINANCE › Chapter 12 - FRAUDULENT, DISHONEST AND UNETHICAL BUSINESS PRACTICES › Section 48-12-002 - FRAUDULENT PRACTICES OF BROKER-DEALERS AND AGENTS

Current through June 17, 2024
A broker-dealer or agent who engages in one or more of the
				  following practices shall be deemed to have engaged in an "act, practice, or
				  course of business which operates or would operate as a fraud" as used in
				  Section
				  8-1102(1)(c)
				   of the Act:
002.01 Entering into a transaction with a
				customer in any security at an unreasonable price, or at a price not reasonably
				related to the current market price of the security, or receiving an
				unreasonable commission or profit.
002.02 Contradicting or negating the
				importance of any information contained in a prospectus or other offering
				materials with intent to deceive or mislead, or using any advertising or sales
				presentation in a deceptive or misleading manner.
002.03 In connection with the offer, sale, or
				purchase of a security, falsely leading a customer to believe that the
				broker-dealer or agent is in possession of material, non-public information
				which would impact on the value of the security.
002.04 In connection with the solicitation of
				a sale or purchase of a security, engaging in a pattern or practice of making
				contradictory recommendations to different investors of similar investment
				objectives for some to sell and others to purchase the same security, at or
				about the same time, when not justified by the particular circumstance of each
				investor.
002.05 Failing to make a
				bona fide public offering of all the securities allotted to a broker-dealer for
				distribution by, among other things, (1) transferring securities to a customer,
				another broker-dealer or a fictitious account with the understanding that those
				securities will be returned to the broker-dealer or its nominees, or (2)
				"parking" or withholding securities.
002.06 Failing to disclose the firm's present
				bid and ask price of a particular security at the time of solicitation, and the
				firm's bid and ask price at the time of execution of the written
				confirmation.
002.07 In connection
				with the solicitation of a purchase or sale of over the counter ("OTC")
				unlisted non- Nasdaq equity securities, failing to advise the customer, both at
				the time of solicitation and on the written confirmation, of any and all
				compensation related to the specific securities transaction which is to be paid
				to the agent, including commissions, sales charges, or concessions.
002.08 In connection with a principal
				transaction, failing to disclose, both at the time of solicitation and on the
				written confirmation, a short inventory position in the firm's account of more
				than five percent of the issued and outstanding shares of that class of
				securities of the issuer, provided that this subsection applies only if the
				firm is a market maker at the time of the solicitation.
002.09 Conducting sales contests in a
				particular security.
002.10 After a
				solicited purchase by a customer, failing or refusing, in connection with a
				principal transaction, to promptly execute sell orders.
002.11 Soliciting a secondary market
				transaction when there has not been a bona fide distribution in the primary
				market.
002.12 Engaging in a
				pattern of compensating an agent in different amounts for effecting
				contemporaneous sales and purchases in the same security.
002.13 Effecting any transaction in, or
				inducing the purchase or sale of, any security by means of any manipulative,
				deceptive or fraudulent device, practice, plan, program, design or contrivance,
				which may include, but not be limited to:
002.13A Effecting any transaction in a
				security which involves no change in the beneficial ownership
				thereof.
002.13B Entering an order
				or orders for the purchase or sale of any security with the knowledge that an
				order or orders of substantially the same size, at substantially the same time
				and substantially the same price, for the sale of any such 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 broker-dealer from entering bona fide
				agency cross transactions for its customers.
002.13C Effecting, alone or with one or more
				other persons, a series of transactions in any security creating actual or
				apparent active trading in such security or raising or depressing the price of
				such security, for the purpose of inducing the purchase or sale of such
				security by others.