A broker recommends the stock of ABC Company to several customers, which creates excessive demand for the stock and raises its market price. The broker then sells his own shares of ABC Company and makes a large profit. This is a prohibited market manipulation tactic known as:

Which of the following scenarios illustrates the prohibited market manipulation practice known as front running?

I. A broker enlists several colleagues to place multiple trade orders for XYZ Company’s stock prior to market open, which leads to an increase in the demand for the shares and an increase in price. Once the price increases, they sell their shares for a profit.

II. A broker receives an order from her customer to purchase 250,000 shares of XYZ Company. Before executing the order, she purchases shares in her personal account, and then, after executing the order, sells her own shares for a large profit.

III. A broker recommends XYZ Company stock to several customers, which leads to an increase in the demand for the shares and an increase in price. The broker then sells her own shares of XYZ Company and makes a large profit

IV. A broker personally owns 500 shares of XYZ Company. She plants a rumor about the company to drive up its stock price, and then subsequently sells off her shares for a profit.

Brokers who trade excessively in their customers’ accounts to inflate their commissions are engaging in the prohibited activity known as:

Individuals who violate FINRA and SEC insider trading rules face the following civil and criminal penalties:

I. Fines up to $25 million

II. Up to 10 years imprisonment

III. Up to 20 years imprisonment

IV. Fines up to $5 million

XYZ Company is in the process of acquiring a competitor company, and, prior to the public announcement, their CFO discloses the impending acquisition to a friend of hers. If the friend trades their shares of XYZ Company based on this information, who has committed securities fraud?

Which of the following scenarios best illustrates the illegal practice of insider trading?

Registered representatives are prohibited from performing which of the following activities?

Unregistered persons are prohibited from performing all the following activities except:

Generally, broker-dealer records must be kept for a period of:

Commingling is a prohibited activity. Instead, firms are required to: