(1) It shall
constitute an act, practice, or course of business which operates or would
operate as a fraud or deceit upon another person within the meaning of T.C.A.
§
48-1-121(b)(2)
for any investment adviser, directly or indirectly, to publish, circulate, or
distribute any advertisement:
(a) Which
refers, directly or indirectly, to any testimonial of any kind concerning the
investment adviser or concerning any advice, analysis, report, or other service
rendered by such investment adviser;
(b) Which refers, directly or indirectly, to
past specific recommendations of such investment adviser, which were or would
have been profitable to any person; provided, however, that this shall not
prohibit an advertisement which sets out or offers to furnish a list of all
recommendations made by such investment adviser within the immediately
preceding period of not less than one (1) year, if such advertisement and such
list, if it is furnished separately:
1.
States the name of each such security recommended, the date and nature of each
such recommendation (e.g., whether to buy, sell, or hold), the market price at
that time, the price at which the recommendation was to be acted upon, and 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) Which represents, directly or indirectly,
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; or which represents, directly or indirectly, that any graph, chart,
formula, or other device being offered will assist any person in making his own
decisions as to which securities to buy and sell, or when to buy and sell them,
without prominently disclosing in such advertisement the limitations thereof
and the difficulties with respect to its use;
(d) Which 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
(e)
Which contains any untrue statement of a material fact, or which is otherwise
false or misleading.
(2)
For the purposes of this Rule, the term "advertisement" shall include any
notice, circular, letter, or other written communication addressed to more than
one (1) person, or any notice or other announcement in any publication or by
radio or television, which offers (a) any analysis, report, or publication
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, or (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.
