Series 63 practice questionmediumMisstatements vs. Omissions
All of the following are considered fraudulent activities under the USA EXCEPT:
- AMaking a material misstatement of fact to a client
- BFailing to disclose a material conflict of interest
- CRecommending a security without reasonable basis
- DForgetting to mention a minor, non-material lawsuit✓ Correct answer
Explanation
Why D — Forgetting to mention a minor, non-material lawsuit
Omitting immaterial facts (D) is not fraud. Misstatements (A), failing to disclose material conflicts (B), and unsuitable recommendations (C) can all constitute fraud or unethical business practices (USA Sec. 101(2)).
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