Nevada Administrative Code › Chapter 90 - Securities › SECURITIES AGENTS › General Provisions › Section 90.328 - Fraudulent practices

Current through June 11, 2024
1. A broker-dealer,
				sales representative, investment adviser, representative of an investment
				adviser or transfer agent who engages in any of the following acts or practices
				shall be deemed to have engaged in an act, practice or course of business which
				operates or would operate as a fraud within the meaning of
				NRS
				90.570:
(a)
				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.
(b) Receiving an
				unreasonable commission or profit in a transaction with a customer in any
				security.
(c) Contradicting or
				negating the importance of any information contained in a prospectus or other
				offering materials with the intent to deceive or mislead another
				person.
(d) Using any advertising
				or sales presentation in a deceptive or misleading manner.
(e) In connection with the offer, sale or
				purchase of a security, falsely leading a customer to believe that the
				broker-dealer, sales representative, investment adviser, representative of an
				investment adviser or transfer agent is in possession of material information,
				not available to the public, which would affect the value of the
				security.
(f) In connection with
				the solicitation of a sale or purchase of a security, engaging in a pattern or
				practice of making contradictory recommendations concerning the sale or
				purchase to different investors with similar investment objectives, if the
				recommendations:
(1) Are made at or about the
				same time; and
(2) Are not
				justified by the particular circumstances of each investor.
(g) Failing to make a bona fide
				public offering of all the securities allotted to a broker-dealer for
				distribution by, among other acts:
(1)
				Transferring securities to a customer, another broker-dealer or a fictitious
				account with the understanding that the securities will be returned to the
				broker-dealer or his or her nominee; or
(2) Parking or withholding
				securities.
(h) In
				connection with the solicitation of the purchase or sale of any equity security
				traded over the counter, other than a security included in the Nasdaq Global
				Market:
(1) Recommending any speculative
				low-priced security to a customer without attempting to obtain information
				about:
(I) The other securities held by the
				customer;
(II) The financial
				situation of the customer; and
(III) Other data necessary to determine the
				suitability of the investment for the customer;
(2) Failing to disclose the firm's bid and
				ask price of a particular security:
(I) At the
				time of solicitation; and
(II) At
				the time of execution on the confirmation;
(3) If the firm is a market maker at the time
				of the solicitation, failing to disclose, both at the time of solicitation and
				on the confirmation in connection with a principal transaction, a short
				inventory position in the firm's account of more than 5 percent of the issued
				and outstanding shares of that class of securities of the issuer;
(4) Conducting any sale contests in a
				security;
(5) Failing or refusing,
				in connection with a principal transaction, to promptly execute a sell order
				after a solicited purchase by a customer;
(6) Soliciting a secondary market transaction
				if the broker-dealer, sales representative, investment adviser, representative
				of an investment adviser or transfer agent knows or should know that there has
				not been a bona fide distribution in the primary market;
(7) Effecting any transaction in or inducing
				the purchase or sale of any security by means of any manipulative, deceptive or
				other fraudulent device or contrivance, including, without limitation, the use
				of boiler room tactics or a fictitious or nominee account; or
(8) Failing to comply with any requirement
				for delivery of a prospectus promulgated under state or federal
				law.
Ê Nothing in this paragraph shall be deemed to preclude
				  application of the general antifraud provisions of chapter 90 of NRS against
				  any person for any practice similar in nature to the practices described in
				  this paragraph.