SIE practice questionhardMunicipal Bonds/Manipulation
A dealer colludes with others to fix bids for a municipal bond underwriting. This activity is:
- AAllowed if the municipality is informed
- BPermissible if all parties agree
- COnly a violation for federal securities
- DBid rigging, a form of market manipulation forbidden by the MSRB and SEC✓ Correct answer
Explanation
Why D — Bid rigging, a form of market manipulation forbidden by the MSRB and SEC
Bid rigging is illegal under MSRB and SEC rules, regardless of consent or disclosure. It applies to all municipal and federal securities.
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