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SEC Chief Sees Stronger Bans on Broker Recruiting Bonuses and Sales Contests
At a conference of compliance officers at brokerage firms, SEC chief Arthur Levitt stated that he supported banning broker practices that create conflicts of interest with the customer.
These are: 1) Banning single product sales contests; 2) Requiring disclosure to customers if the broker is being paid more to sell a proprietary product (e.g., a mutual fund run by the firm, such as Dean Witter Funds); and 3) Requiring disclosure when a broker is being paid (up-frong money, or greater commission payout) to switch from one firm to another.
Source: On Wall Street, June 1, 1999
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