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Aug 16

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New FINRA Rules Expand Liability to Customers

The Financial Industry Regulatory Authority (FINRA) proposed and the SEC approved FINRA Rule 2090 (Know Your Customer) and FINRA Rule 2111 (Suitability) as part of the process of developing the consolidated FINRA rulebook. These new rules became effective this month. As with their predecessor rules, failure to comply with these expanded requirements will serve as the starting point for investor claims against brokers and investment advisors.

We review the new rules and their implications in this article.

 

About the author

David Nolte

I am a founding principal of Fulcrum Inquiry, an accounting and economic consulting firm that performs damage analysis for commercial litigation, forensic accountings, financial investigations, and business valuations. I am a Certified Public Accountant (CPA) and an Accredited Senior Appraiser (ASA), as well as having other professional credentials. I regularly serve as an expert witness involving damages measurement. My litigation-oriented resume is on Fulcrum's website.

Permanent link to this article: http://betweenthenumbers.net/2012/08/new-finra-rules-expand-liability-to-customers/

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