April 11, 2021

Volume XI, Number 101

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April 09, 2021

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April 08, 2021

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FINRA Releases Regulatory Notice on Policies and Procedures Relating to Fraud Involving Low-Priced Securities

On February 10, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 21-03 (the Notice) urging member firms to review their policies and procedures with respect to red flags of potential securities fraud involving low-priced securities. Given that low-priced securities tend to be volatile and trade in low volumes, it may be difficult to find accurate information regarding such securities. As a result, low-priced securities are vulnerable to fraud and market manipulation, especially with respect to COVID-19-related products or services.

The Notice provides information that may help FINRA member firms that engage in low-priced securities business assess and, as appropriate, strengthen their controls to identify and mitigate their risk, and the risk to their customers, of becoming involved in activities related to fraud involving low-priced securities.

The Notice.

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©2021 Katten Muchin Rosenman LLPNational Law Review, Volume XI, Number 43
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About this Author

Susan Light, Katten Law Firm, Finance Law Attorney, New York
Partner

Susan Light focuses her practice on financial services regulatory matters. She counsels broker-dealers, hedge funds, investment banks and financial services clients on enforcement issues involving the Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), other self-regulatory organizations (SROs) and state and federal regulatory authorities. She has particular experience related to sales practice issues, financial and operational issues, anti-money laundering, crowdfunding, cybersecurity, and cryptocurrencies.

...
212-940-8599
Jack West Financial Attorney Katten
Associate

Jack West is an associate in the Financial Markets and Funds practice.

312-902-5463
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