Business PracticesCâu 58 / 100
An agent learns that his firm is about to execute a very large buy order for a thinly traded stock and immediately buys shares for his own account before entering the customer's order. This is:
a.Permissible, because the agent's order was small
b.Permissible if the agent later discloses it
c.Front-running, a prohibited practice that misuses knowledge of a pending customer order
d.Merely a suitability issue
Giải thích
Front-running is the use of advance knowledge of a pending block order to trade ahead of it for the agent's own benefit, and it is prohibited regardless of the size of the personal order. Later disclosure does not cure a violation that was complete when the order was entered. The problem is misuse of customer order information and market integrity, not the suitability of the security.
Trích dẫn luật: NASAA Model RuleLuyện miễn phí toàn bộ 100 câu hỏi — không cần đăng ký.
Câu hỏi liên quan cùng chủ đề
- An agent handles a conservative retiree's account and generates 60 round-trip trades in six months, producing commissions that consume a large share of the account's value. This practice is best described as:
- A customer tells his agent, 'Buy 500 shares of a good technology company sometime this week.' The agent selects the issuer and buys the shares two days later. The agent has:
- An investment adviser deposits a client's advance advisory fee into the firm's general operating account and uses it to pay office rent. This conduct is:
- A hesitant client says she will invest only if she cannot lose money. Her agent replies, 'Don't worry, if the stock drops below your purchase price I'll personally cover the difference.' The agent has:
- An agent proposes to share in the profits and losses of a customer's account. Under NASAA rules, this arrangement:
- An agent is short of cash and asks a wealthy retail client for a $20,000 personal loan, promising repayment with interest. Under NASAA rules this is:
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