Pennsylvania Code › Title 10 - BANKING AND SECURITIES › Part VII - Securities › Subpart D - Fraudulent and Prohibited Practices › Chapter 404 - PROHIBITED ACTIVITIES; INVESTMENT ADVISERS AND INVESTMENT ADVISER REPRESENTATIVES › Section 404.010 - Advertisements by investment advisers and investment adviser representatives

Current through Register Vol. 54, No. 28, July 13, 2024
(a) The Department
				  will consider the direct or indirect publication, circulation or distribution
				  of an advertisement by an investment adviser or investment adviser
				  representative to be a fraudulent, deceptive or manipulative act, practice or
				  course of conduct within the meaning of section 404 of the act (70 P.S. §
											1-404) if the advertisement:
(1) Refers, directly or indirectly, to any
				  testimonial of any kind concerning the investment adviser or investment adviser
				  representative concerning any advice, analysis, report or other service given
				  to the customer by the investment adviser or investment adviser
				  representative.
(2) Refers,
				  directly or indirectly, to past specific recommendations of the investment
				  adviser or investment adviser representative which were or would have been
				  profitable to any person except that an advertisement setting forth or offering
				  to furnish a list of all recommendations made by the investment adviser or
				  investment adviser representative for the 12-month period immediately preceding
				  the date of the publication of the advertisement is not prohibited if the
				  advertisement:
(i) Includes the name of each
				  security recommended, the date and nature of each recommendation including
				  whether to buy sell or hold, the market price at the time, the price at which
				  the recommendation was to be acted on, and the current market price of each
				  security.
(ii) Contains the
				  following cautionary legend prominently displayed on the first page in print or
				  type as large as the largest print or type used in the body or text stating:
				  "IT SHOULD NOT BE ASSUMED THAT RECOMMENDATIONS MADE IN THE FUTURE WILL BE
				  PROFITABLE OR WILL EQUAL THE PERFORMANCE OF THE SECURITIES IN THIS
				  LIST."
(3) Represents,
				  directly or indirectly, that any graph, chart, formula or other device being
				  offered:
(i) Can in and of itself be used to
				  determine which securities to buy or sell, or when to buy or sell
				  them.
(ii) Will assist any person
				  in making decisions as to which securities to buy or sell, or when to buy or
				  sell them, without prominently disclosing in the advertisement the limitations
				  and the difficulties with respect to its use.
(4) Contains any statement that any report,
				  analysis or other service will be furnished free or without charge, unless the
				  report, analysis or other service actually is or will be furnished absolutely
				  without condition or obligation.
(5) Contains any untrue statement of a
				  material fact, or which is otherwise false or misleading in any material
				  respect, including the failure to disclose compensation, including free or
				  discounted securities, received directly or indirectly in connection with
				  making a recommendation concerning a specific security.
(6) Recommends the purchase or sale of any
				  security unless the investment adviser or investment adviser representative
				  simultaneously offers to furnish to any person on request a tabular
				  presentation of:
(i) The total number of
				  shares or other units of the security held by the investment adviser or
				  investment adviser representative for its own account or for the account of
				  officers, directors, trustees, partners or affiliates of the investment adviser
				  or for discretionary accounts of the investment adviser or investment adviser
				  representative maintained for clients.
(ii) The price or price range at which the
				  securities listed in subparagraph (i) were purchased.
(iii) The date or range of dates during which
				  the securities listed in response to subparagraph (i) were purchased.