A firm settled FINRA charges for suitability and supervisory violations related to the sale of non-traditional and volatility-linked exchange traded products.
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FINRA stated that marketing materials should reflect the fact that many private placements are either illiquid or speculative in nature, and should "balance claims of these investments' benefits by disclosing these risks."
FINRA RN 13-18 provides new guidance on communications with the public concerning non-traded REITs and DPPs. The notice was drafted by the FINRA advertising department and likely brings to a conclusion an extended series of recent FINRA reviews of industry marketing materials. A summary is below. The Regulatory Notice is effectively an interpretation of FINRA Rule 2210, which requires that FINRA member communications with the public be "fair, balanced and not misleading." (For a general discussion of the requirements applicable to broker-dealer communications, see Lofchie's Guide to Broker