Question of the Week

Under the Uniform Securities Act, all of the following are prohibited EXCEPT:

a) Omitting a material fact due to time constraints
b) Refusal to follow a client’s instructions
c) Soliciting trades for unregistered exempt securities
d) Making an untrue statement regarding a material fact

Answer:

The correct answer is c.

Refusing to follow a client’s instructions and making false statements (or omitting true ones!) about material facts are all prohibited. Furthermore, while soliciting trades for unregistered non-exempt securities is prohibited, there is no prohibition for soliciting orders for unregistered exempt securities (such as US Government bonds).