Washington Administrative Code › Title 460 - Financial Institutions, Department of (Securities Division) › Chapter 460-22B - Salespersons of broker-dealers › Section 460-22B-090 - Dishonest and unethical business practices - Salespersons

Current through Register Vol. 24-14, July 15, 2024
The phrase "dishonest or unethical practices" as used in
				RCW
				 21.20.110(1)(g) as applied
				to salespersons, is hereby defined to include any of the following:
(1) 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;
(2) Effecting securities transactions not
			 recorded on the regular books or records of the broker-dealer which the agent
			 represents, unless the transactions are authorized in writing by the
			 broker-dealer prior to execution of the transaction;
(3) Establishing or maintaining an account
			 containing fictitious information in order to execute transactions which would
			 otherwise be prohibited;
(4)
			 Sharing directly or indirectly in profits or losses in the account of any
			 customer without the written authorization of the customer and the
			 broker-dealer which the agent represents;
(5) Dividing or otherwise splitting the
			 agent's commissions, profits or other compensation from the purchase or sale of
			 securities with any person not also registered for the same broker-dealer, or
			 for a broker-dealer under direct or indirect common control;
(6) 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;
(7)
			 Recommending to a customer the purchase, sale or exchange of any security
			 without reasonable grounds to believe that such transaction or recommendation
			 is suitable for the customer based upon reasonable inquiry concerning the
			 customer's investment objectives, financial situation and needs, and any other
			 relevant information known by the broker-dealer;
(8) Executing a transaction on behalf of a
			 customer without authorization to do so;
(9) Exercising any 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 and/or price for the execution of
			 orders;
(10) Executing any
			 transaction in a margin account without securing from the customer a properly
			 executed written margin agreement promptly after the initial transaction in the
			 account;
(11) 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;
(12) Failing to furnish to
			 a customer purchasing securities in an offering, no later than the date of
			 confirmation of the transaction, a final or preliminary prospectus, and if the
			 latter, failing to furnish a final prospectus within a reasonable period after
			 the effective date of the offering;
(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 is not limited to:
(a)
			 Effecting any transaction in a security which involves no change in the
			 beneficial ownership thereof;
(b)
			 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;
(c)
			 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;