“There are no rules of professional conduct applicable to NAR firms’ activities,” Finra said in its notice. “Moreover, NAR firms are not subject to malpractice insurance requirements. Any recovery against a NAR firm for negligence is generally limited to the assets of the corporation. Therefore, investors have little recourse if a NAR firm negligently represents or defrauds them. In addition, NAR firms are not subject to licensing boards and there is no supervisory body with authority to police their activities. Therefore, Finra is considering whether it would be prudent to further restrict representation of parties by NAR firms,” the agency said in its notice.
 

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