NASAA Opposes Account Transfer Interference

   

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NASAA Opposes Account Transfer Interference

Joins NASDR in supporting customer right to transfer account, regardless of broker/firm disputes

By John M. Baker, Esq.


When registered representatives change their brokerage firms and try to take their customers with them, employer brokerages in the past frequently have opposed the move as violative of the brokers’ non-solicitation agreements. Customers in some cases have been caught in the middle, with their ability to trade restricted during the litigation of an employment dispute to which they are not a party.

The National Association of Securities Dealers earlier this year proposed to restrict NASD members from interfering with customer account transfers. Now the North American Securities Administrators Association has announced that state securities regulators oppose any actions by firms that interfere with customers’ requests to transfer their accounts to brokers or firms of their choice.

The NASAA announcement invites investors experiencing problems transferring accounts to contact their state securities regulator to file a complaint. NASAA’s November 19 announcement is available online at http://www.nasaa.org/nasaa/abtnasaa/display_top_story.asp?stid=219

According to a report in the Los Angeles Times, several large brokerage firms have agreed in response to stop trying to block customers from transferring accounts to their brokers after the brokers have switched firms.

The L.A. Times report is available online at http://www.latimes.com/business/la-000092837nov21.story

For my prior post on the NASD proposal, see http://groups.yahoo.com/group/fundlaw/message/467


Copyright 2001, John M. Baker, Esq., Stradley, Ronon, Stevens & Young, LLP, 1220 19th Street, N.W., Suite 700, Washington, DC 20036 – (202) 822-9611- Fax (202) 822-0140 This article was originally posted to the FundLaw List, http://www.egroups.com/group/fundlaw. To subscribe to FundLaw, send a blank e-mail to fundlaw-subscribe@egroups.com


Nothing herein is intended as legal or financial advice. The law is different in different jurisdictions, and the facts of a particular matter can change the application of the law. Please consult an attorney or your financial advisor before acting upon the information contained in this article.  

 


 

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