SHINGLE THEORY
shingle theory. Securities. The notion that a broker-dealer must be held to a high standard of conduct because by engaging in the securities business (¡°hanging out a shingle¡±), the broker-dealer implicitly represents to the world that the conduct of all its employees will be fair and meet professional norms. [Cases: Securities Regulation 27.21, 60.32(1). C.J.S. Securities Regulation ¡ì¡ì 76, 164, 195, 217.]¡°[I]n judging the appropriate standard of care that attaches to a broker-dealer in recommending securities to his or her customers and in dealing with the customers’ accounts, the Commission has relied upon the ¡®shingle theory.¡¯ The shingle theory is but an extension of the common law doctrine of ¡®holding out.¡¯ When brokers hold themselves out as experts either in investments in general or in the securities of a particular issuer, they will be held to a higher standard of care in making recommendations.¡± Thomas Lee Hazen, The Law of Securities Regulation ¡ì 10.6, at 423 (2d ed. 1994).
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