FINRA Investor News

September 2, 2004

Investor Alert

"Phishing" and Other Online Identity Theft Scams: Don't Take the Bait

The Internet has revolutionized the way that many individuals manage their finances, and interact with financial service providers. With the click of a mouse, you can view account information, pay bills, research investments, and buy and sell securities. Unfortunately, "identity thieves" also can exploit the Internet. Through a variety of scams, wrongdoers have managed to steal usernames and passwords, obtain sensitive personal and financial information, and sell risky securities to unsuspecting customers.

While identity theft is a growing problem online, with some vigilance and caution, individuals can better protect themselves. This Alert tells you how to spot some of the latest online identify theft scams targeting financial sector customers and what you can do to better protect yourself from falling victim to these scams.

401(k) Learning Center Updated!

NASD's Smart 401(k) Investing learning center has been updated and a new section on Individual 401(k) Plans has been added.

Whether you're just starting out or you're already retired,
Smart 401(k) Investing has the information you need to understand your 401(k). Smart 401(k) Investing takes you through the process of enrolling and managing your 401(k) account and answers your questions about everything from 401(k) investment options to asset allocation and diversification, from moving your 401(k) when you change jobs to handling withdrawals when you retire.

Smart 401(k) Investing is the second in NASD's Smart Investing series. The Smart Investing series offers comprehensive information plainly, simply, and without bias to help investors reach their goals. The first in the series—Smart Saving for College—helps families better understand 529 plans and other college savings options.

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News Dispatch

NASD Given New Authority To Discipline Former Brokers Who Fail To Pay Arbitration Awards

The Securities and Exchange Commission has approved amendments to NASD By-Laws that strengthen NASD's ability to prevent former brokers from re-entering the securities industry if they have failed to pay arbitration awards or settlements. NASD will implement its new authority beginning September 9, 2004.

NASD will now be able—for up to two years from the date of an arbitration award or settlement—to institute suspension proceedings against a former broker who fails to pay that award or settlement. In most cases, NASD retains jurisdiction over a broker for two years after termination of registration or association with a regulated firm, for conduct that occurred while he or she was still employed by or associated with a regulated firm. This rule change explicitly allows NASD to retain jurisdiction over former brokers for two years from the date of an award or settlement, regardless of how long that award or settlement is entered after the broker left the industry. A suspension of a former broker for non-payment of an award or settlement would not only prevent that individual from
re-registering as a broker, but would prevent that individual from associating with a regulated firm in any capacity until the award or settlement is paid.

Details on NASD's new authority are available in Notice to Members 04-57.

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Past Issues of Investor News Available

In response to numerous requests, previous issues of Investor News are now available on our Web site.

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