In the Matter of National Association of Securities Dealers, Inc.
Securities and Exchange Commission
Release No. 34-3322 (1942)
- Written by Sharon Feldman, JD
Facts
The Maloney Act amended the Securities Exchange Act of 1934 to authorize the creation and registration of self-regulatory securities organizations. The National Association of Securities Dealers, Inc. (NASD) (defendant), an organization of brokers and dealers in the over-the-counter market, was registered with the Securities and Exchange Commission (SEC) (plaintiff) as a national securities association. The SEC’s opinion permitting the NASD’s registration noted the lack of provisions to ensure members’ solvency. The NASD proposed a bylaws amendment that would require, as a condition of membership, that members have a fixed minimum net capital of $5,000 if they dealt directly with customers and $2,500 if they did not. The proposal was distributed to members as an open ballot. Over one-fourth of the NASD’s members would be expelled if the amendment were adopted. A majority of voting NASD members approved the proposal, but the open ballot may have influenced small dealers to vote for the proposal or not to vote. The NASD sought SEC approval of the amendment.
Rule of Law
Issue
Holding and Reasoning ()
What to do next…
Here's why 815,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 46,300 briefs, keyed to 988 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.