Corporate & Securities Law

Fee-based accounts have existed for more than a decade as an alternative to paying commissions for buying and selling securities.  They have been popular and profitable, but soon will become subject to more stringent regulatory requirements as a result of a 2007 court decision that effectively makes such accounts investment advisory (fiduciary) accounts instead of (arguable more limited duty) brokerage accounts.  As we wait to see whether brokerage firms will choose to continue to offer fee-based programs in this fiduciary context, we must be mindful of how poorly several brokerage firms have complied with the longstanding regulatory requirements for fee-based accounts.  Let's review what brokerage firms have continued to do wrong, as reflected in several regulatory actions and pronouncements.

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