SIE practice questioneasyFINRA Rules
A broker receives a large client order and immediately buys shares for their own account before executing the client’s order. What prohibited activity is this?
- ABreakpoint sale
- BInsider trading
- CChurning
- DFront-running✓ Correct answer
Explanation
Why D — Front-running
Front-running is when a broker trades ahead of a client’s large order, hoping to profit from subsequent price movement. Insider trading involves material, nonpublic info. Churning is excessive trading, and breakpoint sales involve mutual funds.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Regulatory Framework questions
- A registered representative recommends frequent trades in a customer’s account solely to generate commissions. This is…
- A registered representative shares in profits from a client’s account without prior written approval from the firm and…
- Trading securities based on material, nonpublic information is prohibited by which agency?
- Failure to file required suspicious activity reports (SARs) regarding potential insider trading would be: