Legal Question in Securities Law in Illinois

Re: Investment Newsletter

Rule 3040 only applies to private securities transactions, and your newsletter may or may not fit that definition. However, Rule 3030 also applies, if you receive compensation for this activity or you are an "employee" of any other entity. Moreover, the conduct may fall within that of an investment advisor, and registration as such may or may not be required depending on the structure and content of the newsletter, and the number and location of the clients, among other things. And, you also have to ensure that you don't violate the various anti-fraud provisions of the Securities Exchange Act, including Section 10(b).

This is a complicated issue that is very fact dependent, and you should consult with a competent securities attorney and fully discuss your factual scenario and receive wise counsel and advice to ensure that you do not run afoul of the industry rules and regulations. Remember that the securities industry, in which you work, is one of the most heavily regulated industries in the US.

Re: Investment Newsletter

FINRA RULE 3040 requires that you receive your firm's prior written approval because this activity is "investment related." The more complicated question is whether you have to register as an investment adviser. Please contact me to discuss the foregoing in greater depth.

Andrew May /[email protected].

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