02-032 C.M.R. ch. 515, § 6 - Advertising

1. It is unlawful to publish, circulate, or distribute any advertisement that:

A. Refers either directly or indirectly to any testimonial of any kind concerning the investment adviser or investment adviser representative, or concerning any advice, analysis, report or other service rendered by such investment adviser or investment adviser representative;

B. Refers either directly or indirectly to past specific recommendations of such investment adviser or investment adviser representative which were or would have been profitable to any person. However, this shall not prohibit an advertisement which sets out or offers to furnish a list of all recommendations made by an investment adviser or investment adviser representative within the immediately preceding period of not less than one year if such advertisement or list is furnished separately and:

(1) states

(a) the name of each such security recommended;

(b) the date and nature of each such recommendation, for example, whether to buy, sell or hold;

(c) the market price at that time;

(d) the price at which the recommendation was to be acted upon; and

(e) the market price of each such security as of the most recent practicable date; and

(2) contains the following cautionary legend on the first page thereof in print or type as large as the largest print or type used in the body or text thereof: "it should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list";

C. Either directly or indirectly represents that any graph, chart, formula or other device being offered can, in and of itself, be used to determine which securities to buy or sell, or when to buy or sell them;

D. Represents, either directly or indirectly, that any graph, chart, formula or other device being offered will assist any person in making his or her own decisions as to which securities to buy, sell, or when to buy or sell them, without prominently disclosing in such advertisement the limitations thereof and the difficulties with respect to its use;

E. Contains any statement to the effect that any report, analysis, or other service will be furnished free or without charge, unless such report, analysis or other service actually is or will be furnished entirely free and without any condition or obligation, directly or indirectly; or

F. Contains any untrue statement of a material fact, or is otherwise false or misleading.

2. For the purposes of this sub-section, the term, "advertisement" shall include any notice, circular, letter or other written communication addressed to more than one person, or any notice or other announcement in any publication or by radio, television or the internet which offers:

A. Analysis, reports, or publications concerning securities, or which is to be used in making any determination as to when to buy or sell any security, or which security to buy or sell;

B Any graph, chart, formula, or other device to be used in making any determination as to when to buy or sell any security, or which security to buy or sell; or

C. Any other investment advisory service with regard to securities.

Notes

02-032 C.M.R. ch. 515, § 6