Structured Thoughts -- Volume 4, Issue 8 -- May 15, 2013

In This Issue:

Due Diligence Procedures for Structured Note Distributors; Key Issues for Yankee CDs; The SEC and FINRA: Protect Your Elders; The FSOC’s 2013 Annual Report: Increasing Exchange-Traded Product Activity; and SEC Discusses Estimated Value at Structured Products Conference.

Excerpt from Due Diligence Procedures for Structured Note Distributors -

Sections 11 and 12 are the main liability provisions under the Securities Act of 1933, as amended (the “Securities Act”). Section 11 covers misstatements or omissions in registration statements, while Section 12 imposes liability with respect to misstatements or omissions in prospectuses. Other sources of liability under the federal securities laws include the antifraud provision of the Securities and Exchange Act of 1934, as amended, found in Section 10b and Rule 10b-5 adopted thereunder. Underwriters can be held liable for these misstatements or omissions, but have a potential defense from liability if they can demonstrate that after performing appropriate due diligence procedures, they were unaware of the misstatement or omission. In addition, prior to making a recommendation with respect to a debt security, FINRA expects brokers to assess the credit quality of an issuer, and to ensure that its registered representatives are duly advised of that assessment, and any changes to it.

Please see full issue below for more information.

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Topics:  Broker-Dealer, Due Diligence, Elder Issues, FINRA, FSOC, SEC, Structured Financial Products

Published In: General Business Updates, Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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