SEC Staff Issues Summary Report of Sweep Examination of Structured Products Sold to Retail Investors

by Sabrina I. Pacifici on July 27, 2011

News release: “The Securities and Exchange Commission staff today issued a report identifying common weaknesses seen in sales of structured securities products and describing measures by broker-dealers to better protect retail investors from fraud and abusive sales practices. The report summarizes the results of a sweep examination of the retail structured securities products business of 11 broker-dealers, covering a cross-section of the industry. Structured securities products generally do not represent ownership of a particular asset (such as stock in a manufacturing company); instead, the products promise returns to investors based on the performance of one or more underlying assets.”

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