SIE practice questionhardAccount Types: Insider Trading Prevention
A broker-dealer learns material nonpublic information about a company in a client account. Which action is REQUIRED under securities laws?
- AShare the information with the investment banking department.
- BInform other clients to help them profit.
- CClose the client account immediately.
- DRefrain from trading on the information until it is public.✓ Correct answer
Explanation
Why D — Refrain from trading on the information until it is public.
Trading or tipping on material nonpublic info is illegal (insider trading). B and D violate the law. C is not required absent other misconduct.
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