SIE practice questioneasyFINRA Rules - Customer Accounts
A registered representative opens multiple accounts under different names to conceal large purchases of a penny stock. This is an example of:
- AProper diversification
- BProhibited activity known as 'structuring'✓ Correct answer
- CBest execution
- DDiscretionary trading
Explanation
Why B — Prohibited activity known as 'structuring'
Structuring to conceal trading activity is a prohibited activity. Diversification, best execution, and discretionary trading are legitimate when properly managed.
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