SEC Finds Shady Practices in BDs’ Structured Product Sales
August 25, 2015 By Melanie Waddell, ThinkAdvisor Violations included heavy sales to customers who were elderly, didn't speak English or had a conservative investment objective A recent exam by the Securities and Exchange Commission of 10 broker-dealers’ branch offices revealed “significant deficiencies” in the BDs’ suitability and supervision of sales of structured securities products to investors. Violations included an over-concentration of sales to customers who were non-English speaking, elderly or had a conservative investment objective. One firm had even retroactively changed customers' stated investment objectives in order to sell them more structured products. The SEC’s Office of Compliance Inspections and Examinations released Tuesday a risk alert detailing the findings of exams conducted on 10 branch offices of registered broker-dealers that distribute SSPs issued by their parents or affiliates or by unaffiliated third parties. While significant deficiencies were found...