A number of courts have implied private causes of action against securities broker-dealers for their breach of the supervision and suitability duties imposed by the self-regulatory rules of the New York Stock Exchange and the National Association of Securities Dealers. The prevailing view denies recovery in the absence of conduct "tantamount to fraud." In examining the development of the fraud requirement, the author distinguishes Rule 10b-5 actions and contends that such a strict curtailment of actions brought under self-regulatory rules is not compelled by clear judicial precedent or by legislative purpose.
Private Actions under the Suitability and Supervision Duties of Exchange and Dealer Association Rules: The Fraud Requirement,
San Diego L. Rev.
Available at: https://digital.sandiego.edu/sdlr/vol16/iss4/4