As a general rule, most brokerage firms don’t bother to tape record conversations with their customers. Many brokers do, however, maintain a log of any customer contact. Under the little known “Taping Rule,” securities brokerage firms that have employed a large number of brokers who came from firms with a history of regulatory violations must tape record all conversations between the broker and customers for a period of two years. The purpose of the rule is to prevent the reoccurrence of sales and telemarking abuses.
If a brokerage firm is subject to the “Taping Rule,” this should raise a giant red flag for investors. Below is the current list of firms subject to the “Taping Rule.” The Rule must be having a positive affect, because none of the firms listed below are still in business.
- AIS Financial, Inc.
- APS Financial Corporation
- Aura Financial Services, Inc.
- Brewer Financial Services, LLC
- Cambridge Legacy Securities, LLC
- Dolphin & Bradbury Incorporated
- Genesis Securities
- iTRADEdirect.com Corp.
- Maxxtrade, Inc.
- Meeting Street Brokerage, LLC
- Melhado, Flynn & Associates, Inc.
- MICG Investment Management LLC
- Mission Securities Corp
- MMR, Inc.
- Mortgages LTD Securities, LLC
- Pinnacle Partners Financial Corporation
- Prestige Financial Center, Inc.
- Provident Asset Management, LLC
One of the best precautions against becoming a victim of securities fraud is to conduct a background check of your your investment advisor or stock broker using BokerCheck.