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1965 Duke L.J. 445 (1965)
Professional Responsiblities of Broker-Dealers: The Suitability Doctrine

handle is hein.journals/duklr1965 and id is 459 raw text is: %uke lat Journal VOLUME 1965 SUMMER NUMBER 3 PROFESSIONAL RESPONSIBLITIES OF BROKER-DEALERS: THE SUITA- BILITY DOCTRINEt ROBERT H. MUNDHEIM* ONE OF the important contributions of the Special Study of Se- curities Markets' (Special Study) was the change of emphasis which it effected in the thinking concerning problems related to the sale of securities to the public. Such thinking had been directed primarily to devising ways in which more complete and usable information could be made available to the public investor so that he would have a basis for making informed and reasoned decisions about the investment merits of securities. Although it did not mini- mize the importance of disclosure, the Special Study turned its atten- tion to the people selling securities because it recognized that often the salesman is the key to the sale of securities. In its study of the qualifications of the persons in the securities industry, the Special Study found 'large gaps and important deficiencies which created major problems for the protection of the public interest in securities and the securities markets. Accordingly, it recommended than stan- dards encompassing competence, character and integrity, and financial capacity and responsibility be erected for the broker-dealer commu- nity.2 Congress endorsed the Special Study's conclusions in the Se- curities Acts Amendments of 19648 (Amendments Act) by including in that legislation a mandate to the Securities and Exchange Com- mission (Commission) and the National Association of Securities t This article bears a date of May 20, 1965. * A.B. 1954, LL.B. 1957, Harvard University. Associate Professor of Law, Univer- sity of Pennsylvania. 1 SEC, Report of Special Study of Securities Markets, H.R. Doc. No. 95, 88th Cong., Ist Sess. (1963) [hereinafter cited as Special Study]. 2 Special Study, pt. 1, at 160. 8 78 Stat. 565 (1964).

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