Oregon Administrative Rules › Chapter 441 - DEPARTMENT OF CONSUMER AND BUSINESS SERVICES, FINANCE AND SECURITIES REGULATION › Division 205 - DENIAL, SUSPENSION, OR REVOCATION OF LICENSE › Section 441-205-0130 - Fair Dealing with Customers

Current through Register Vol. 63, No. 7, July 1, 2024
The term "Manipulative, Deceptive, or Other Fraudulent Act or
				Practice," as used in these rules, is hereby defined to include:
(1) Recommending speculative low-priced
			 securities to customers without knowledge of or attempt to obtain information
			 concerning the customers' other securities holdings, their financial situation,
			 and other necessary data.
(2)
			 Trading in mutual fund shares on a short-term basis.
(3) Recommending the purchase of securities
			 or the continuing purchase of securities in amounts which are inconsistent with
			 the reasonable expectation that the customer has the financial ability to meet
			 such a commitment.
(4) In any
			 transaction for or with a customer failing to use reasonable diligence to
			 ascertain the best inter-dealer market for the subject security and buy or sell
			 in such market so that the resultant price to the customer is as favorable as
			 possible under prevailing market conditions.
(5) In any transaction for or with a
			 customer, interjecting a third party between a broker-dealer and the best
			 available market, except in cases where the broker-dealer can demonstrate that,
			 to his knowledge at the time of the transaction, the total cost or proceeds of
			 the transaction, as confirmed to the broker-dealer acting for or with the
			 customer, was better than the prevailing inter-dealer market for the
			 security.
(6) Failing to make a
			 bona fide public distribution at the public offering price of securities of a
			 public offering which immediately trade at a premium in the secondary market,
			 regardless of whether such securities are acquired by the broker-dealer as an
			 underwriter, a selling group member, or from a member participating in the
			 distribution as an underwriter or selling group member, or otherwise.
(7) Establishment of fictitious accounts in
			 order to execute transactions which otherwise would be prohibited, such as the
			 purchase of "Hot Issues."
(8)
			 Causing the execution of transactions which are unauthorized by customers or
			 the sending of confirmations in order to cause customers to accept transactions
			 not actually agreed upon.
(9)
			 Giving, permitting to be given, or offering to give, directly or indirectly,
			 anything of value to any person for the purpose of influencing or rewarding the
			 action of such person in connection with the publication or circulation in any
			 newspaper, investment service, or similar publication, of any matter which has,
			 or is intended to have, an effect upon the market price of any security;
			 provided that this rule shall not be construed to apply to matter which is
			 clearly distinguishable as paid advertising.
(10) Guaranteeing a customer against loss in
			 any securities account of such customer carried by the broker-dealer or in any
			 securities transaction effected by the broker-dealer with or for such
			 customer.
(11) Sharing directly or
			 indirectly in the profits or losses in any account of a customer carried by the
			 broker-dealer or any other broker-dealer, unless such broker-dealer or person
			 associated with a broker-dealer obtains prior written authorization from the
			 broker-dealer carrying the account; and unless such a broker-dealer or person
			 associated with such broker-dealer shares in the profits or losses in any
			 account of such customer only in direct proportion to the financial
			 contributions made to such account by either the broker-dealer or person
			 associated with a broker-dealer; provided, however, that this subsection shall
			 not apply to accounts of the immediate family of such broker-dealer or person
			 associated with a broker-dealer. For purposes of this rule, "Immediate Family"
			 shall include parents, mother-in-law or father-in-law, husband or wife,
			 children or any relative to whose support the broker-dealer or person
			 associated with a broker-dealer otherwise contributes directly or
			 indirectly.
Stat. Auth.: ORS 59
Stats. Implemented: ORS
				  59.205(2)