SIE practice questionmediumInvestment Company Act of 1940
A closed-end fund manager manipulates the share price through coordinated trading with other parties. This is a violation of:
- AThe Securities Act of 1933 only
- BThe Investment Company Act of 1940 prohibition on fraud and manipulation✓ Correct answer
- CFutures trading rules
- DFederal Reserve margin regulations
Explanation
Why B — The Investment Company Act of 1940 prohibition on fraud and manipulation
The Investment Company Act of 1940 specifically prohibits fraud and manipulation by registered investment companies. The other rules do not apply directly to mutual fund manipulation.
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