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CALIFORNIA CORPORATE & SECURITIES LAW

Suitability Of Broker-Dealer Recommendations And Litotes

The Financial Industry Regulatory Authority, better known as FINRA, imposes a suitability requirement on its members.  Rule 2111(a) requires, in part, that a broker-dealer or registered representative “have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer” based on the customer’s investment…

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