E-Trade’s Ads Under Scrutiny of SEC and NASD
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Internet bank and brokerage E-Trade Group Inc. is being investigated by the Securities and Exchange Commission and the National Assn. of Securities Dealers for inappropriate advertising.
The second-largest online broker has agreed to submit its ads to the NASD’s regulation division 10 days before first being used, the company said in a filing earlier this month.
The NASD can force E-Trade to suspend all advertising if the Menlo Park, Calif.-based company is found to be in violation of the regulator’s advertising rules. Other penalties could include ordering E-Trade to stop using certain advertisements or the suspension of the firm’s broker-dealer license or the expelling of any of its officers or employees.
CNBC earlier reported the story.
In the filing, E-Trade cited two lawsuits in which the firm is accused of deceptive and fraudulent advertising.
In March, E-Trade paid a fine of $20,000 for failing to respond promptly to NASD regulatory request for information related to customer complaints on 12 instances, the filing said.
In Friday’s trading, E-Trade eased 13 cents to close at $16.81 on Nasdaq.
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