Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Sunday, September 19, 2010

Hazen on Stock Broker Standards

Are Existing Stock Broker Standards Sufficient? Principles, Rules and Fiduciary Duties, by Thomas Lee Hazen, University of North Carolina (UNC) at Chapel Hill - School of Law, was recently posted on SSRN.  Here is the abstract:

In recent years there has been concern as to the adequacy of broker-dealer regulation. SEC and self regulatory organization rulemaking addresses specific types of broker-dealer conduct but by and large the regulation has been based on principles and standards rather than voluminous detailed rules specifying prohibited conduct. In particular, a good deal of broker-dealer conduct is addressed under the umbrella of regulating according to fair and just principles of trade. Also, much of the SEC’s rulemaking authority is based on the ability to prohibit fraudulent, manipulative, and deceptive devices. It also has been suggested that broker-dealers should be subject to fiduciary duties but to a large extent, they already are. This article examines the extent to which principles-based regulation or the setting of general standards should be further supplemented by rulemaking addressing specific types of conduct.

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