The Financial Industry Regulatory Authority (FINRA) issued a Regulatory Notice to remind member firms of their responsibilities when participating in resales of restricted securities. A member firm is generally required to have written procedures in place to ensure that it does not become a participant in an illegal unregistered distribution. FINRA issued the Notice because it had recently detected a number of instances during examinations where firms failed to recognize certain “red flags” indicative of illegal, unregistered distributions. The Regulatory Notice describes different procedures implemented by member firms to address compliance in this area that FINRA found effective. Although the procedures varied, FINRA found that the best ones tended to include “a mandatory, standardized process that requires formal approval of the proposed resale transaction” along with thorough documentation practices.  

http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p117716.pdf