Trading, Accounts & Prohibited ActsQuestion 280 of 398
A representative, worried about losing a client, promises in writing to personally reimburse any losses in the client's account. This is:
a.Allowed, because it protects the customer
b.Allowed if the branch manager verbally agrees
c.Prohibited, because a representative may not guarantee a customer against loss or share in losses improperly
d.Required whenever a customer complains
Explanation
Guaranteeing a customer against loss, or improperly sharing in a customer's account, is prohibited. Representatives may not promise to cover losses; doing so misrepresents the nature of investing and violates FINRA rules.
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