STUDY FOR THE SERIES 66 EXAM

We all know that insider trading is against the law, but it's worthwhile reviewing an actual case of insider trading to see how the SEC treats it, and also how it likely involves criminal charges brought by the Department of Justice (DOJ). Oh, and by the way, the Series 66 Exam includes questions on Insider Trading. How do I know this? I know it because NASAA's  Test Specifications for the Series 66  include Section IV (H) (4) (4.4) on Insider Trading. Here is a recent SEC Press Release dated February 22, 2024, on an Insider Trading case : " Spouse purchased stock using non-public information about planned merger " FOR IMMEDIATE RELEASE 2024-24 "Washington D.C., Feb. 22, 2024 — The Securities and Exchange Commission today charged Tyler Loudon of Houston, Texas, with insider trading ahead of a February 2023 announcement that London-based oil and gas company BP p.l.c. agreed to acquire TravelCenters of America Inc., a full-service truck stop and travel center compa

From time to time, we use this blog to talk about the Record-Keeping Rule that requires both investment advisers and broker/dealers to create and maintain written records of all communications received from and directed to retail customers and clients. Record-Keeping is certainly reflected in NASAA's Test Specifications for the Series 66 Exam. See Section IV (G), especially Subsection 5 (5.1 through 5.3) which covers communications with customers through social media, e-mail, digital messaging, and all other website and internet platforms. (These communications are known as "off channel.") That this is an important topic on the Series 66 Exam is underscored by an SEC Press Release dated February 9, 2024 announcing that the SEC has discovered serious violations of the Record-Keeping Rule by 16 firms, and the names of the firms which the SEC has fined more than $81 million in total. Here's what the SEC stated about these 16 firms: "The SEC’s investigations uncovere

NASAA, the North American Securities Administrators Association, publishes Test Specifications for the Series 66 Exam, and in Section IV (H) (6) (6.2) includes Succession Planning. By Succession Planning we mean planning for the changing of the guard when senior or key executives of an advisory firm resign, retire or pass away.  What will happen to the advisory firm in the event of such happenings? Will the firm simply wither up and disappear? That would  be disastrous for the clients of such firm. They would be abandoned by their advisers, and forced to fend for themselves for management of their savings or the investment of their retirement nest egg. To prevent such damage to clients, each investment adviser or advisory firm should create in writing a detailed succession plan. Here's is  what Bob Eder, author of  Study for the Series 66 Exam , says about Succession Planning: Succession Planning                                                                          IV (H) (6) (6