Series 63 practice questionmediumMisrepresentation of Material Information
Under the USA, an agent tells a client the firm is 'the largest in the state,' although it is not. This is:
- AAcceptable if the firm is large
- BConsidered a material misrepresentation✓ Correct answer
- CPermissible if the agent was told this by a supervisor
- DNot a violation if the client does not rely on it
Explanation
Why B — Considered a material misrepresentation
Falsely stating the firm’s size is a material misrepresentation under Section 501, regardless of intent. Supervisor instruction (C) does not excuse the violation, and client reliance (D) is not required for a violation.
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