§ 7-11-503 - Prohibited transactions by investment advisers, federal covered advisers. - Rhode Island Statutes

SECTION 7-11-503

   § 7-11-503  Prohibited transactions byinvestment advisers, federal covered advisers. – An investment adviser, a federal covered adviser, or a person who represents aninvestment adviser or a federal covered adviser may not, directly or indirectly:

   (1) Employ a device, scheme, or artifice to defraud a client;

   (2) Engage in an act, practice, or course of business thatoperates or would operate as a fraud or deceit upon a client; or

   (3) Act as principal for his or her own account, knowinglysell any security to or purchase any security from a client, or acting asbroker for a person other than the client, knowingly effect any sale orpurchase of any security for the account of the client,, without disclosing tothe client, in writing, before the completion of the transaction the capacityin which he or she is acting and obtaining the consent of the client to thetransaction. The prohibitions of this paragraph do not apply to a federalcovered adviser or to any transaction with a customer of a broker dealer if thebroker dealer is not acting as an investment adviser in relation to thetransaction.