Securities Law Commons^™

Banks And Brokers And Bricks And Clicks: An Evaluation Of Finra's Proposal To Modify The "Bank Broker-Dealer Rule", Jill I. Gross

Elisabeth Haub School of Law Faculty Publications

As discussed in this article, the proposed rule change protects bank customers who may be solicited for the purchase of investment products and services, but only to a limited extent. It does not rectify sales practices of broker-dealers--affiliated with financial institutions--which tend to confuse, and even mislead, financially unsophisticated investors of modest means who can least afford to be exposed to excessive risk. Additionally, the proposed rule change adds no meaningful surveillance, inspection, enforcement, or punitive mechanisms to prevent and/or redress insidious practices that are akin to “bait and switch” tactics and are particularly effective against financially unsophisticated investors. In …