A new NASD ruling may leave capital introduction services
Is there a 'smoking gun email' trail proving that prime
brokers have been selling hedge funds through their 'capital
introduction' services? Some people fear that there may be and
that prime brokers could find themselves under serious
What is catching the attention of attorneys at many of the
investment banks is not so much the comments of SEC chairman,
William Donaldson, in which he said that he would take a long
hard look at capital introduction. Rather it is a little
noticed ruling by the NASD.
The hand grenade that the NASD rolled into the boardrooms of
the banks came in the form of a seemingly innocuous notice to
members, which gently reminded them of sales practice when
selling hedge funds and registered hedge fund products.
The notice referred to the sale of hedge fund products to