Rules Of Fair Practice

FINRA’s “Rules of Fair Practice” are designed to tell brokers how to behave, and they basically consist of two main messages: (1) be fair, and (2) act in the best interests of the client. In other words, they tell our broker to do things we, uh...hope they don’t need to be told to do. But, more specifically, they discuss things like misleading investors, misrepresenting investment opportunities, selling a client’s information to third parties, focusing on commissions to the detriment of the client’s account, etc. Brokers who violate these rules can be fined, sanctioned, blacklisted, and flogged for their bad behavior. Plus, their names get published by FINRA for all to see.

Okay, no one gets flogged. But the rest of it can totally happen.