Securities broker-dealers promulgate sales practice compliance manuals which require individual registered representatives to report customer complaints to their firms' compliance departments. This allows firms to monitor and police their brokers in order to ensure compliance with federal and state securities regulations. In addition, FINRA itself prosecutes registered representatives for entering into private settlements with customers that are not disclosed to their member firms. Yet, surprisingly, there is no rule in the FINRA Manual specifically prohibiting the practice of settling away.
- Securities Regulation Settling Away
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