Disciplined Firms
Included in this section is the list of firms that have been Disciplined for Sale Practice Fraud.
For purposes of this requirement, a Disciplined Firm is defined very narrowly to include those firms that meet the following three criteria:
1. The firm has been formally charged by either the CFTC or NFA with deceptive
telemarketing practices or promotional material;
2. Those charges have been resolved; and
3. The firm has been permanently barred from the industry as a result of those charges.
Be aware that if you have worked with any disciplined firm you will be tainted for life! It does not matter if you were a guilty party or not.
Click here for a list of firms that have been Disciplined for Sales Practice Fraud by the NFA:
Disciplined Firms
Guilty by Association rule 2-9
According to the NFA:
If a Member firm is closed by NFA or the CFTC for fraud related to widespread telemarketing or promotional material problems or a firm is closed by NASD or the SEC for fraud related to its sales practices regarding security futures products as defined in Section 1a (32) of the Commodity Exchange Act ("Act"), it is reasonable to conclude that the training and supervision of its sales force was wholly inadequate or inappropriate. It is also reasonable to conclude that an AP who received inadequate or inappropriate training and supervision may have learned improper sales tactics, which he will carry with him to his next job. Therefore, the Board believes that a Member firm employing such a sales force must have stringent supervision procedures in place in order to ensure that the improper training its APs have previously received does not taint their sales efforts on behalf of the Member.
The Board has determined that a Member will be required to adopt the specific supervisory procedures over its sales practice activities if:
For firms with less than five APs, 2 or more of its APs have been employed by one or more Member firms which have been disciplined by NFA or the CFTC (or one or more firms disciplined by any securities industry self-regulatory organization or the SEC in matters involving security futures products) for sales practice fraud ("Disciplined Firms");
For firms with at least 5 but less than 10 APs, 40 percent or more of its APs have been employed by one or more Disciplined Firms;
For firms with at least 10 but less than 20 APs, four or more of its APs have been employed by one or more Disciplined Firms; or
For firms with at least 20 APs, 20 percent or more of its APs have been employed by one or more Disciplined Firms.