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.
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.
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