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Prohibited Activities & Ethics: 83 free SIE practice questions

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A broker learns that a client is about to place a large order that will likely affect a stock’s price. If the broker trades ahead of the…medium
An employee gives nonpublic, material information about a company to a friend who trades on it. What are the roles of the employee and the…medium
A broker found guilty of front-running may be subject to which consequences?hard
If an individual is convicted of insider trading, which penalty may the SEC impose?hard
A CEO buys stock of her company after learning undisclosed, positive financial results. What rule does this violate?easy
Which of the following would be considered illegal insider trading?medium
A broker-dealer receives a large customer order and trades for the firm’s account ahead of executing the customer’s trade. This is…medium
A group of investors manipulates the price of a thinly traded stock by rapidly buying and selling among themselves to give a false…hard
Which activity is an example of illegal insider trading?easy
A broker-dealer enters orders to create the appearance of active trading in a security. What is this practice called?easy
A registered representative buys shares of a stock for their own account just before executing a large client order. What is this called?medium
An individual spreads false positive rumors to inflate a stock’s price and then sells their shares. What is this scheme known as?hard
A broker learns material, non-public information about an issuer through a client and executes trades for both the firm and the client…medium
Spreading false rumors to artificially affect a stock’s price is an example of:medium
A registered representative executes personal trades ahead of a large client order to profit from the expected price movement. This is…hard
A company executive learns nonpublic, material information about a pending merger and trades shares. This is a violation of:medium
Front-running is best described as:medium
Which of the following is considered market manipulation?medium
A non-employee receives material, nonpublic information from an insider and trades on it. Under the law:hard
An employee at a public company buys shares based on confidential earnings information not yet released to the public. This is an example…easy
A registered representative learns a large institutional client will place a substantial buy order. The representative buys shares for…medium
An investor sells 100 shares of XYZ at a loss and purchases 100 shares of XYZ 20 days later. Under the wash sale rule, what is the tax…hard
Trading securities based on material, non-public information is known as:easy
Under the Insider Trading Sanctions Act, the SEC can seek civil penalties of up to how many times the profit gained or loss avoided through…medium
A registered representative excessively trades in a customer's account primarily to generate commissions. This practice is known as:medium
A broker-dealer receives a large institutional order to buy 500,000 shares of a stock. Before executing the customer's order, a trader at…medium
Two traders agree to buy and sell the same stock between themselves to create the appearance of active trading and attract other investors.…hard
An individual purchases shares of a penny stock, then spreads false positive information about the company on social media to drive up the…medium
A registered representative executes trades in a customer's non-discretionary account without obtaining the customer's prior approval. This…easy
Placing a large order to buy or sell with the intent to cancel it before execution to mislead other market participants about supply and…hard
A registered representative tells a customer, 'I guarantee you won't lose money on this investment.' This statement is:easy
Under FINRA rules, a registered representative may share in the profits and losses of a customer's account only if:medium
Placing trades near the close of the market specifically to influence the closing price of a security is known as:hard
A broker-dealer acting as principal charges a customer a 12% markup on a stock trade. Under FINRA's markup policy, this is most likely:medium
A broker uses material, nonpublic information to trade a security. This is known as:medium
Which best describes 'churning' in a brokerage account?medium
A registered representative trades a stock based on nonpublic information about a company's upcoming merger. This action constitutes:medium
Which scenario best describes market manipulation?hard
What is the primary regulatory concern with 'painting the tape'?medium
A registered representative trades a stock after learning material, non-public information from a client. Which law is violated?medium
A broker-dealer learns material nonpublic information about a company in a client account. Which action is REQUIRED under securities laws?hard
An agent executes trades between two controlled accounts to create artificial trading volume. What is this practice called?hard
A registered rep enters personal trades in advance of customer block orders in the same security. This is known as:hard
Painting the tape refers to which prohibited market activity?easy
Under the law, which of the following is required for a person to be guilty of insider trading?easy
A broker learns that a customer is placing a large buy order, and buys shares for their own account just before entering the customer's…easy
Which of the following is an example of market manipulation prohibited by the SEC?easy
Which of the following is an example of a matched order?medium
A broker excessively buys and sells securities in a discretionary account mainly to earn commissions. This activity is known as:medium
A broker-dealer coordinates with another firm to submit identical orders at the same time in order to create the appearance of market…hard
The penalties for willful insider trading violations may include which of the following?hard
A registered representative learns confidential information about a company’s upcoming merger through a client who works at the company.…easy
Which of the following best describes 'painting the tape' in securities trading?easy
Matched orders are best described as:easy
Which of the following best illustrates an 'insider' engaging in illegal insider trading?medium
A wash sale for the purpose of market manipulation involves:medium
If a corporate insider gives confidential information to a friend who then trades on it, the friend is known as:medium
A rep executes a trade in a margin account without proper authorization and later claims the client verbally approved. According to FINRA,…medium
A broker-dealer continually enters buy orders to artificially keep a stock’s price above a certain level. This practice is known as:medium
An options trader receives material, non-public information about an upcoming FDA drug approval and purchases call options. Later, the…hard
A group acquires shares of a thinly traded stock, promotes false positive news to attract buyers, and then sells at inflated prices. This…hard
A high-frequency trading firm floods the market with numerous orders it intends to cancel immediately, aiming to slow down other traders’…hard
Just before market close, a trader enters a series of buy orders solely to boost the closing price of a stock and benefit from reporting…hard
A corporate 'tipper' reveals material inside information to a relative, who profits by trading before the news is public. Which party is…hard
A trader places large orders with no intent to execute, hoping to move the price and then cancels them. This prohibited activity is called:hard
An investment bank’s research department obtains non-public information about a merger from its advisory department. If the information is…hard
A registered representative overhears material, nonpublic information about a company from a client and subsequently buys shares for their…easy
Which of the following is an example of market manipulation?easy
Which of the following is NOT considered inside information?easy
A group of traders coordinate to buy large volumes of a thinly traded stock to artificially raise the price and attract buyers, then sell…easy
An RR who buys a stock for themselves after learning of, but before executing, a customer’s large block order is engaging in what…easy
Placing a series of buy and sell orders with no intent to change ownership, to give the appearance of trading activity, is known as:easy
A firm encourages clients to purchase a bond it holds in inventory and simultaneously posts misleadingly positive reviews online about the…medium
A corporate officer’s friend trades based on a tip about pending earnings that is not yet public. This is an example of:medium
Which of the following practices is LEAST likely to be viewed as market manipulation?medium
A registered representative executes frequent trades in a client’s account that are inconsistent with the client’s investment objectives.…medium
A broker-dealer receives a large institutional order that is likely to move the market, and trades ahead of it for personal gain. What are…hard
A group of traders coordinate a series of matched orders to artificially inflate the trading volume and price of a small-cap stock before…hard
A tippee uses material, nonpublic information obtained indirectly from a company insider to profit from trading. According to securities…hard
A firm pays social media influencers to covertly promote stocks it owns without disclosure. This is:hard
Anna, an employee at a public company, shares confidential financial results with her friend before they are announced. Her friend then…easy
A registered representative learns that a large institutional client is about to place a big purchase order and buys the same security for…easy
Section 16(a) of the Securities Exchange Act requires insiders to report changes in beneficial ownership within what time frame?medium