SIE practice questionhardProhibited Activities
A registered representative places customer orders after executing their own trades at better prices. This is prohibited under:
- ARegulation D
- BFront-running rules✓ Correct answer
- CMargin maintenance rules
- DInvestment Company Act of 1940
Explanation
Why B — Front-running rules
Front-running places the rep's interests above the client and is illegal. Reg D (B) covers private placements. Margin (C) and the 1940 Act (D) are unrelated here.
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