Advertisement
YOU ARE HERE: LAT HomeCollections

In Brief : SEC Proposes Penny-Stock Curbs

February 08, 1989|From Times Wire Services

WASHINGTON — The Securities and Exchange Commission today proposed stiff new rules to protect small investors from high-pressure sales tactics often used in the sale of so-called penny stocks.

The commission voted 5 to 0 to propose requiring stockbrokers to obtain written customer agreement and make a documented "suitability" determination before completing the sale of such stocks in most cases.

Penny stocks are inexpensive securities sold over-the-counter. They are not listed on any major stock exchanges or quoted on the NASDAQ over-the-counter system.

SEC staff members said the rule was deliberately crafted in a narrow way to avoid hurting the ability of small companies to use the markets to raise capital.

Advertisement
Los Angeles Times Articles
|
|
|