SEC Chairman Mary Schapiro sent a letter to broker/dealer CEOs on August 31 reminding them of their supervisory obligations under federal securities laws after recent reports arose that some broker/dealer firms may be engaging in special recruiting programs that offer enhanced compensation arrangements.
"Reports suggest some firms are offering substantial inducements to potential registered representatives, including large up-front bonuses and enhanced commissions for sales of investment products," Schapiro wrote. "In light of these reports, I want to remind broker/dealer firms and their CEOs of the significant supervisory responsibilities you have under the federal securities laws to oversee broker/dealer activities, particularly with respect to sales practices."