SEC Chairman Mary L. Schapiro today issued an open letter to remind broker-dealer chief executive officers of their supervisory responsibilities following reports that special recruitment programs at some firms are premised on enhanced compensation arrangements.
Document Excerpt
Dear Chief Executive Officer:
Recent press articles have reported that some broker-dealer firms may be engaging in a vigorous recruiting program for broker-dealer registered representatives. Reports suggest some firms are offering substantial inducements to potential registered representatives, including large up-front bonuses and enhanced commissions for sales of investment products, In light of these reports, I want to remind broker-dealer firms and their CEOs of the significant supervisory responsibilities you have under the federal securities laws to oversee broker-dealer activities, particularly with respect to sales practices.
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