Nebraska Fines B-D Rep $3,000 for Advertising Violations – IA Reps Should Make Sure Any Advertising Discloses Advisory Services Offered Through RIA

April 25, 2009

A recent consent order in a matter before the Nebraska Securities Bureau serves as a reminder to registered investment advisors of the necessity to clearly and accurately disclose that advisory services are offered by the registered investment advisor and not an outside business activity of the investment advisor representative.

According to the consent order, the individual, who was subject to this enforcement proceeding by the Nebraska Securities Bureau, advertised an upcoming savings and retirement protection seminar through a flyer that described the seminar as sponsored by the individual’s outside business activity and listed himself as a registered representative of his outside business activity, which was not a registered entity with the Nebraska Securities Bureau; however, the flyer also described the individual as a registered representative of a broker-dealer and noted the outside business activity and the broker-dealer were not affiliated, which were both accurate statements. The Nebraska Securities Bureau concluded in the consent order that the individual violated NASD Rule of Conduct 2210(d)(2)(C), in that the flyer did not identify the products and services of the broker-dealer. The Nebraska Securities Bureau fined the individual in question $3,000 for this and other violations.

Although this enforcement proceeding by the Nebraska Securities Bureau was against a registered representative of a broker-dealer, this type of problem can often be found with a registered investment advisor that lacks a clear disclosure about the services offered by the firm as compared to the outside business activities of its investment advisor representatives. If you would like compliance assistance with your registered investment advisor’s advertising, please contact RIA Compliance Consultants.

Posted by Bryan Hill
Labels: Advertising