Series 63: Exercise

Exercise

Choose fraudulent or not fraudulent

1. 1. _ An investment adviser fails to disclose facts about a financial condition that is not material to its effectiveness as a firm.
2. 2. _ An investment adviser has a written agreement that allows it to pay cash to an independent solicitor for bringing clients to the firm.
3. 3. _ An adviser purchases a security for his own account in advance of purchasing a large block of the same securities for a client. He makes this purchase because he expects the price of the security to get a boost from his client’s purchase.
4. 4. _ An employee of a firm reports his securities holdings to the firm’s compliance office one week after first obtaining inside information.

Answers

1. 1. Not fraudulent. Only financial conditions that are reasonably likely to imp