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#621998 - 10/05/06 07:52 PM Stock Prices
Higgy1 Offline
Junior Member
Joined: Aug 2005
Posts: 43
I need to know if a banker can tell a caller their stock price? If prohibited, what regulation governs this?

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General Discussion
#621999 - 10/05/06 08:28 PM Re: Stock Prices
GenerousLife Offline
Diamond Poster
Joined: Feb 2002
Posts: 1,466
USA
It is the SEC that governs here and they would require a properly licensed and registered representative be the one to communicate that information.

Our institution has a relationship with a broker/dealer and in our annual training we are told not to have these kinds of conversations with investment customers. The licensed investment representative should handle it.

An example would be that a customer calls a CSR and asks for a stock price, the CSR gives a price out (what price are they giving and where are they getting the information?) and the customer says, "Sell my shares right now!" The CSR is absolutely the wrong person to handle this information.
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#622000 - 10/06/06 01:03 PM Re: Stock Prices
Retired DQ Offline
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Turnpike Exit 10
I would generally refer them to our website and tell them to look at the Investor pages.
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#622001 - 10/08/06 08:18 PM Re: Stock Prices
FraudBuster Offline
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Joined: Nov 2005
Posts: 198
Indiana
The same regulations that permit banks to have brokerage departments that offer nondeposit investments require strict measures to avoid confusing customers about what is FDIC-insured and what is not. I would suggest that these restrictions also apply to inquiries about the bank's own stock. Stock in a bank is not FDIC-insured, so the same employee who services deposit accounts cannot service this non-insured investment.

However, all employees who deal with the public should be trained to connect a caller with such questions to the appropriate department, often called Investor Relations or Shareholder Relations. If the caller mentions that they are considering a variety of possible investments, including bank stock, a referral to the bank's brokerage area may be appropriate.

As Devil Queen points out, the information may also be available on the bank's website, but someone who has chosen to call on the telephone may prefer a personal contact.
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#622002 - 10/16/06 09:27 PM Re: Stock Prices
new2banking Offline
Junior Member
Joined: Jan 2006
Posts: 26
Northern California
Although I'm new to banking, as my name states, I previously spent 25+ years in the securities industry, including several years as a regulator.

Only a properly registered (Series 7) representative of a broker-dealer may quote a stock's bid or ask price to a member of the public. Furthermore, the Interagency Agreement prohibits bank employees (as well as broker-dealer employees) from saying or doing anything that would lead a member of the public to believe that the bank's stock is a product that's risk free or insured by the FDIC.

That being said, if it's absolutely clear that the stock price is not a quote, that the stock price fluctuates and that the banker cannot purchase or sell the stock, then the regulations would not prohibit the banker from responding that "Yahoo has it at 50 as of twenty minutes ago".

On the other hand, bank policy should and probably does prohibit tellers from engaging in this type of conversation as it's just too darned easy for the customer to forget the part about "Yahoo" and "twenty minutes ago".

The approaches suggested by Generous Life, FraudBuster and Devil Queen, above, are solid. You can't go wrong by heeding their advice. Better safe than sorry!

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#622003 - 10/18/06 08:48 PM Re: Stock Prices
ACBbank Offline
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ACBbank
Joined: Jul 2006
Posts: 4,344
New York City
Quote:

Although I'm new to banking, as my name states, I previously spent 25+ years in the securities industry, including several years as a regulator.

Only a properly registered (Series 7) representative of a broker-dealer may quote a stock's bid or ask price to a member of the public. Furthermore, the Interagency Agreement prohibits bank employees (as well as broker-dealer employees) from saying or doing anything that would lead a member of the public to believe that the bank's stock is a product that's risk free or insured by the FDIC.

That being said, if it's absolutely clear that the stock price is not a quote, that the stock price fluctuates and that the banker cannot purchase or sell the stock, then the regulations would not prohibit the banker from responding that "Yahoo has it at 50 as of twenty minutes ago".

On the other hand, bank policy should and probably does prohibit tellers from engaging in this type of conversation as it's just too darned easy for the customer to forget the part about "Yahoo" and "twenty minutes ago".

The approaches suggested by Generous Life, FraudBuster and Devil Queen, above, are solid. You can't go wrong by heeding their advice. Better safe than sorry!




As someone who has a series 7 and 66, the previous post is 100% correct. Compliance is much stricter for the securities industry than banking. Lawsuits are far more common too. Tellers or any non licensed staff should never discuss a securities value with the public.
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#622004 - 10/25/06 03:38 PM Re: Stock Prices
Enterprise Offline
New Poster
Joined: Oct 2006
Posts: 17
New Jersey & Pennsylvania
We are all in agreement that it is a violation for a bank employee to quote a stock price, but what is the institution going to do. I believe that a memo should be sent out to all employees informing them of the proper procedures to follow when they get a request.

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#622005 - 10/25/06 07:51 PM Re: Stock Prices
Andy_Z Offline
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On the Net
That should be a standard part of their training. So it should happen before they are first exposed to the situation and then on occasion as a reminder. This is akin to discussing FDIC coverage without knowledge of the rules, only worse.
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#622006 - 10/25/06 07:58 PM Re: Stock Prices
GenerousLife Offline
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Joined: Feb 2002
Posts: 1,466
USA
Martha Stewart-worse
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"No problem can withstand the assault of sustained thinking." ~ Voltaire
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