Are Low-Priced Securities a Backdoor to Fraud? FINRA Says Watch Out
On February 15, 2021, FINRA issued an alert warning firms to pay attention to risks associated with low-priced securities activities. The Notice highlights the basic compliance tools that should be reviewed to address current concerns, including a review of red flag indicators of suspicious activity, adequacy of monitoring systems, and systems for consistent and accurate reporting. In light of their concern that bad actors, looking to take advantage of market urgencies like the COVID pandemic, will continue to perpetrate “pump and dump” and other schemes that exploit those attributes, FINRA underscores the risks of low-priced security transactions as a compliance priority.
Read the article to learn about FINRA's concerns and recommendations for your practice.Detail