Section 90.328 - Fraudulent practices1. A broker-dealer, sales representative, investment adviser, representative of an investment adviser or transfer agent who engages in any of the following acts or practices shall be deemed to have engaged in an act, practice or course of business which operates or would operate as a fraud within the meaning of NRS 90.570:(a) Entering into a transaction with a customer in any security at an unreasonable price or at a price not reasonably related to the current market price of the security.(b) Receiving an unreasonable commission or profit in a transaction with a customer in any security.(c) Contradicting or negating the importance of any information contained in a prospectus or other offering materials with the intent to deceive or mislead another person.(d) Using any advertising or sales presentation in a deceptive or misleading manner.(e) In connection with the offer, sale or purchase of a security, falsely leading a customer to believe that the broker-dealer, sales representative, investment adviser, representative of an investment adviser or transfer agent is in possession of material information, not available to the public, which would affect the value of the security.(f) In connection with the solicitation of a sale or purchase of a security, engaging in a pattern or practice of making contradictory recommendations concerning the sale or purchase to different investors with similar investment objectives, if the recommendations:(1) Are made at or about the same time; and(2) Are not justified by the particular circumstances of each investor.(g) Failing to make a bona fide public offering of all the securities allotted to a broker-dealer for distribution by, among other acts:(1) Transferring securities to a customer, another broker-dealer or a fictitious account with the understanding that the securities will be returned to the broker-dealer or his or her nominee; or(2) Parking or withholding securities.(h) In connection with the solicitation of the purchase or sale of any equity security traded over the counter, other than a security included in the Nasdaq Global Market:(1) Recommending any speculative low-priced security to a customer without attempting to obtain information about:(I) The other securities held by the customer;(II) The financial situation of the customer; and(III) Other data necessary to determine the suitability of the investment for the customer;(2) Failing to disclose the firm's bid and ask price of a particular security:(I) At the time of solicitation; and(II) At the time of execution on the confirmation;(3) If the firm is a market maker at the time of the solicitation, failing to disclose, both at the time of solicitation and on the confirmation in connection with a principal transaction, a short inventory position in the firm's account of more than 5 percent of the issued and outstanding shares of that class of securities of the issuer;(4) Conducting any sale contests in a security;(5) Failing or refusing, in connection with a principal transaction, to promptly execute a sell order after a solicited purchase by a customer;(6) Soliciting a secondary market transaction if the broker-dealer, sales representative, investment adviser, representative of an investment adviser or transfer agent knows or should know that there has not been a bona fide distribution in the primary market;(7) Effecting any transaction in or inducing the purchase or sale of any security by means of any manipulative, deceptive or other fraudulent device or contrivance, including, without limitation, the use of boiler room tactics or a fictitious or nominee account; or(8) Failing to comply with any requirement for delivery of a prospectus promulgated under state or federal law.Ê Nothing in this paragraph shall be deemed to preclude application of the general antifraud provisions of chapter 90 of NRS against any person for any practice similar in nature to the practices described in this paragraph.
2. The provisions of this section are not all-inclusive. Any act or practice not enumerated in subsection 1 may also be deemed an act, practice or course of business which operates or would operate as a fraud within the meaning of NRS 90.570.Nev. Admin. Code § 90.328
Added to NAC by Sec'y of State, eff. 10-16-89; A 11-19-92; R016-02, 8-6-2002; R033-08, 6-17-2008