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Perhaps the most disastrous decision of the past decade was the Securities and Exchange Commission's 2004 rule change allowing investment banks to increase the amount of debt they could take on their books—a move made at the request of the Gang of Five's CEOs." He was referring to the net capital rule change. [14]
One notable component of the expense ratio of U.S. funds is the "12b-1 fee", which represents expenses used for advertising and promotion of the fund. 12b-1 fees are paid by the fund out of mutual fund assets and are generally limited to a maximum of 1.00% per year (.75% distribution and .25% shareholder servicing) under FINRA Rules.
The Madoff investment scandal was a major case of stock and securities fraud discovered in late 2008. [1] In December of that year, Bernie Madoff, the former Nasdaq chairman and founder of the Wall Street firm Bernard L. Madoff Investment Securities LLC, admitted that the wealth management arm of his business was an elaborate multi-billion-dollar Ponzi scheme.
The commission that the agent receives is usually a percentage of this figure, although some firms like Merrill Lynch use figures called Production Credits, usually smaller than GDC, to determine payouts and retain more revenue. For example, a mutual fund with a 5.75% sales charge is sold to someone who invests $10,000.
On October 26, 2016, the Commission repealed Rule 505. [4] It previously provided an exemption for offers and sales of securities totaling up to $5 million in any 12-month period. Under this exemption, securities could be sold to an unlimited number of "accredited investors" and up to 35 "unaccredited investors". [4]
The rule is "designed to exclude securities that appear to present little opportunity for the type of improper trading that the access person reports are designed to uncover". [5] However, transactions in exchange-traded funds are reportable securities according to an SEC response to National Compliance Services, Inc.'s 2005 request for no ...
In mergers and acquisitions, a mandatory offer, also called a mandatory bid in some jurisdictions, is an offer made by one company (the "acquiring company" or "bidder") to purchase some or all outstanding shares of another company (the "target"), as required by securities laws and regulations or stock exchange rules governing corporate takeovers.
FINRA Rule 4210 is substantially similar to New York Stock Exchange Rule 431. [4] If, however, the number of day trades is less than or equal to 6% of the total number of trades that trader has made for that five business day period, the trader will not be considered a pattern day trader and will not be required to meet the criteria for a ...