Penny Stock Supervision

What this video covers

• The five-part penny stock definition: why exchange listing alone removes a security from the regime regardless of price, and why issuer-size tests are alternatives not cumulative requirements
• The difference between national market system (NMS) price of $5 or more and the separate issuer-size thresholds for net tangible assets and average revenue
• Why an "established customer" requires specific criteria (1 year plus prior penny-stock activity, OR three buys on three days from three issuers), not just a long relationship
• The per-customer, per-firm nature of the established-customer exemption, and why prior penny-stock experience at another broker-dealer does not carry over
• Pre-trade delivery, signature, and retention requirements for Schedule 15G, and why post-trade or settlement delivery is a violation
• The separate firm compensation disclosure and associated person (AP) compensation disclosure, and why blanket authorizations are prohibited
• The eight-step workflow from written principal approval through monthly statements, and why each breakdown creates a distinct violation