As a result of a broker-dealers’ special relationship with a customer, when a broker-dealer recommends a security, they are under a duty to conduct a reasonable investigation concerning that security and the issuer’s representations about it. As a result, when the broker-dealer makes a recommendation to a customer, the broker-dealer has engaged in a reasonable investigation and its recommendation is based upon the conclusions resulting from such investigation. The Financial Industry Regulatory Authority (FINRA) believes that a failure to comply with this duty is a violation of the antifraud provisions of the federal securities laws and, particularly, Section 17(a) of the Securities Act, Section 10(b) of the Securities Exchange Act and Rule 10b-5 there under by the SEC. In keeping with the utilization of all tools at their command, FINRA also made it clear that such activities could also constitute a violation of FINRA Rule 2010, which requires adherence to just and equitable principles of trade, and FINRA Rule 2020, prohibiting manipulative and fraudulent devices.