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502.404 Prohibited transactions of broker-dealers and agents.

A broker-dealer or agent shall not effect a transaction in, or induce or attempt to induce the purchase or sale of, any security in this state by means of any manipulative, deceptive or other fraudulent scheme, device, or contrivance, fictitious quotation, or in violation of this Act* or any rule or order hereunder. A broker-dealer or agent shall not recommend to a customer the purchase, sale or exchange of a security without reasonable grounds to believe that the transaction or recommendation is suitable for the customer based upon reasonable inquiry concerning the customer's investment objectives, financial situation and needs, and other relevant information known by the broker-dealer.

Section History: Early form

[C77, 79, 81, § 502.404]

Section History: Recent form

83 Acts, ch 169, § 14

Internal References

Referred to in § 502.502


*See 75 Acts, ch 234

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Last update: Mon Jan 27 16:05:08 CST 1997
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