NASD Notice to Members 98-042 - June 1998

NASD Regulation Requests Comment on Proposed Rules Regarding Cease-and-Desist Proceedings; Comment Period Expires July 31, 1998

Executive Summary

NASD Regulation, Inc. (NASD RegulationSM) requests comment on a series of National Association of Securities Dealers, Inc. (NASD®) rules that would authorize NASD Regulation Department of Enforcement staff, after obtaining approval of the President or Chief Operating Officer of NASD Regulation, to initiate temporary cease-and-desist proceedings with respect to the rule violations that pose the most serious and immediate investor protection concerns. The proceeding would allow the Department of Enforcement, after notice and opportunity for a hearing, to order a member or individual to stop engaging in activity that violates certain securities laws or rules. The order could remain in place until a regular disciplinary proceeding is completed. It is expected that temporary cease-and-desist proceedings would be used only in egregious cases. Further, the rules would permit an accelerated proceeding to impose sanctions for violations of temporary or permanent cease-and-desist orders.

 

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