A:

I. Fraudulent investment advice.
II. Distribution of unregulated advertising materials.
III. Misleading filings.
IV. Making misleading statements as to a security's reliability or profitability.

A. I
B. III
C. I, II and IV
D. I, II, III and IV

Correct answer: D

The USA defines prohibited conduct as:
Fraudulent investment advice:
"It is unlawful for a person to provide any type of investment advice (for compensation) either directly or indirectly or through publications or writings, as to the value of securities or the advisability of investing in, purchasing or selling securities that:
-Attempt to employ a device, scheme or artifice to defraud.
-Engage in any act, or course of business, that would operate as fraud."

Advertising materials
Distribution of any unregulated or fraudulent prospectuses, pamphlets, circulars, sales literature or advertising communications, including any/all hard copy and electronic materials is fraudulent.

Misleading Filings
Misleading filings are prohibited under the USA. Such items include any filings that make false or misleading statements, or omit material facts concerning investment advice or an offering.

Other activities considered fraudulent include:
-Informing a client that registration of a security means that the SEC or state Administrator has approved an offering, or security as a "good offering".
-Deliberately misquoting a security to effect a securities transaction.
-Untrue or inaccurate statements regarding commissions, including both markups and markdowns.
-Inaccurate statements regarding registration status. If you tell a client that a security will be approved for a NASDAQ listing, when in fact, your company has only submitted an application, you have committed fraud.
-Any deliberate, and/or misleading statements regarding financial statements, dividends, earnings or future expectations.
-Telling a client anything about their account that is untrue - including returns.
-Promising services that you, your firm or your associates cannot (or simply will not) fulfill - with the intention of promising such to gain securities related business. This includes anything from analyzing an investment to obtaining shares of an IPO.

RELATED FAQS
  1. According to the USA, it is unlawful for a person to offer to sell a security in ...

    a. the security is registered with Federal Reserve. b. it is a federal covered security, is exempted from registration, or ... Read Answer >>
  2. Which statement(s) is/are FALSE about market risk?

    I. It is mitigated by writing calls.II. It includes the risk the investor will lose invested principal.III. It is the same ... Read Answer >>
Related Articles
  1. Managing Wealth

    Eight Financial Safeguards If Disaster Strikes

    In an emergency like a fire, hurricane, flood, tornado or earthquake, you may not be able to protect your home. But you can take steps to avoid financial disaster.
  2. Insights

    Detecting Financial Statement Fraud

    Find out how to tell if a company is manipulating its financial data, so you don't invest in the next Enron.
  3. Small Business

    Need a Loan for Your Startup? Here's How to Prepare a Thorough Loan Package

    Learn how to craft the vital components of a loan package for your startup small business, and how to package it to be as appealing to the lender as possible.
  4. Retirement

    The Risk of Offering Social Security Advice

    Savvy financial advisers will either need to gain Social Security advice expertise or find a source or partner to provide this vital service to clients.
  5. Financial Advisor

    RIAs: Watch the SEC’s Advertising Reg Fine Print

    Advisors need to understand the SEC's advertising rules to avoid potential liability and enforcement actions.
  6. Managing Wealth

    The Pros & Cons Of Owning Rental Property

    Becoming a landlord can be a smart financial move, but be sure you go into it with your eyes open.
  7. Managing Wealth

    Business Vs. Consumer Credit Reports: What's the Difference?

    Find out the difference between a business credit report and a personal credit report, and why it should matter for business owners.
  8. Personal Finance

    CFA Vs. Series 7: Which is Easier

    Find out which is exam is easier: The Chartered Financial Analyst (CFA) exam, or the Series 7 securities exam for registered representatives.
  9. Investing

    Stay the Course With an Investment Policy Statement

    Keep your emotions out of your investment portfolio with an investment policy statement.
  10. Retirement

    Should You Let Your 401(k) Be Managed by Vanguard?

    Find out if Vanguard's reputation and track record as a 401(k) plan provider is as stellar as its reputation and track record as a fund provider.
RELATED TERMS
  1. Fraudulent Conveyance

    The illegal transfer of property to another party in order to ...
  2. Securities Act Of 1933

    A federal piece of legislation enacted as a result of the market ...
  3. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs ...
  4. Dollar-Cost Averaging (DCA)

    Dollar-Cost Averaging is the technique of buying a fixed dollar ...
  5. Clean Sheeting

    The fraudulent act of purchasing a life insurance policy without ...
  6. SEC Form S-6

    A filing with the Securities and Exchange Commission (SEC), which ...
Hot Definitions
  1. Forward Contract

    A customized contract between two parties to buy or sell an asset at a specified price on a future date. A forward contract ...
  2. Leveraged Buyout - LBO

    The acquisition of another company using a significant amount of borrowed money (bonds or loans) to meet the cost of acquisition. ...
  3. Current Assets

    A balance sheet account that represents the value of all assets that can reasonably expected to be converted into cash within ...
  4. Tax Liability

    The total amount of tax that an entity is legally obligated to pay to an authority as the result of the occurrence of a taxable ...
  5. Preferred Stock

    A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock. Preferred shares ...
  6. Net Profit Margin

    Net Margin is the ratio of net profits to revenues for a company or business segment - typically expressed as a percentage ...
Trading Center