SIE practice questioneasyFront-Running
A registered representative learns that a large institutional client is about to place a big purchase order and buys the same security for their personal account first. This is best described as:
- AFront-running✓ Correct answer
- BInsider trading
- CBreakpoint selling
- DFreeriding
Explanation
Why A — Front-running
Front-running is when someone executes trades based on advance knowledge of pending orders. Insider trading involves non-public, material information about a company itself. Breakpoint selling and freeriding relate to mutual funds and margin violations, respectively, and are not applicable.
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 Prohibited Activities & Ethics questions
- Section 16(a) of the Securities Exchange Act requires insiders to report changes in beneficial ownership within what…
- Anna, an employee at a public company, shares confidential financial results with her friend before they are announced.…
- A firm pays social media influencers to covertly promote stocks it owns without disclosure. This is:
- A tippee uses material, nonpublic information obtained indirectly from a company insider to profit from trading.…