SIE practice questionhardProhibited Activities
A registered representative places unauthorized trades in a customer’s account that result in losses. What rule has been violated?
- AInsider trading
- BSelling away
- CTrading without written discretionary authority✓ Correct answer
- DMarking the open
Explanation
Why C — Trading without written discretionary authority
Trades must be authorized by the customer or carried out under written discretionary authority. Selling away is selling securities not offered by the employing firm; insider trading is misuse of nonpublic info, and marking the open is manipulating opening prices.
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