PRIA, Government Policy, Made Personal

Summary

Investment advisers must not, by mail or any method that crosses state lines, cheat or trick clients or prospective clients. They cannot use dishonest business schemes or practices. If an adviser buys or sells for themselves or trades for a client, they must tell the client in writing before the trade finishes and get the client's consent. An exception covers brokers or dealers when they are not acting as advisers. The SEC will make rules to define and stop such fraud.

Title 15, §80b–6

Commerce and Trade, Source: USLM XML via OLRC

It shall be unlawful for any investment adviser by use of the mails or any means or instrumentality of interstate commerce, directly or indirectly—

(1)to employ any device, scheme, or artifice to defraud any client or prospective client;

(2)to engage in any transaction, practice, or course of business which operates as a fraud or deceit upon any client or prospective client;

(3)acting as principal for his own account, knowingly to sell any security to or purchase any security from a client, or acting as broker for a person other than such client, knowingly to effect any sale or purchase of any security for the account of such client, without disclosing to such client in writing before the completion of such transaction the capacity in which he is acting and obtaining the consent of the client to such transaction. The prohibitions of this paragraph shall not apply to any transaction with a customer of a broker or dealer if such broker or dealer is not acting as an investment adviser in relation to such transaction; or

(4)to engage in any act, practice, or course of business which is fraudulent, deceptive, or manipulative. The Commission shall, for the purposes of this paragraph (4) by rules and regulations define, and prescribe means reasonably designed to prevent, such acts, practices, and courses of business as are fraudulent, deceptive, or manipulative.

Notes & Related Subsidiaries

Editorial Notes

Amendments

2010—Par. (3). Pub. L. 111–203 inserted “or” at end. 1960—Pub. L. 86–750, § 8, struck out “registered under section 80b–3 of this title” from introductory text. Par. (4). Pub. L. 86–750, § 9, added par. (4).

Statutory Notes and Related Subsidiaries

Effective Date

of 2010 AmendmentAmendment by Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an

Effective Date

note under section 5301 of Title 12, Banks and Banking.

§80b–6 Prohibited Transactions by Investment Advisers

Summary

Title 15, §80b–6

Notes & Related Subsidiaries

Editorial Notes

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Citations & Metadata