Though there are some portions of the Business Practices section of the test that can get a little confusing, a bit of common sense here can take you a long way. When thinking about fraudulent activity, simply ask yourself, "is this ethical?" If you come up with a common sense answer of no, you have most likely answered the question! 

Exam Tips and Tricks

The USA specifically defines "fraud" as:
An attempt by any person, individual or entity "in connection with the offer, sale or purchase of a security, directly or indirectly:
to employ a device, scheme or artifice to defraud; to make an untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or to engage in an act, practice, or course of business that operates or would operate as a fraud or deceit upon another person." Let\'s just say, for simplicity\'s sake, that fraud is comprised of lying, cheating and stealing!

The USA also states that the above definition "applies to any securities offer, sale or purchase, including offers, sales or purchases involving registered, exempt or federal covered securities."

Communications with Clients and Prospects

Related Articles
  1. Financial Advisor

    Succeeding At The Series 63 Exam

    Your career as a securities agent begins with this test. We'll show you how to score high.
  2. Insights

    Mortgage Fraud: Understanding and Avoiding It

    Mortgage fraud is dangerous, learn how to detect it.
  3. 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.
  4. Retirement

    What Social Security Fraud Costs You

    Taxpayers lose billions of dollars every year, according to Social Security fraud statistics. What to look for.
  5. Insurance

    What is Insurance Fraud?

    Fraud exists in every type of insurance, although the stakes tend to be highest with life insurance.
  6. Personal Finance

    The Series 79 Exam: What It Is And When You Need It

    If you're getting into the field of investment banking, you'll need to know all about the Series 79.
  7. Small Business

    How To Protect Your Small Business From Fraud

    Small business owners are at risk of being scammed. Here's what you need to know to avoid that.
  8. Investing

    CPA Exam Tips

    Tips for the CPA exam - how to approach it, what to expect, and the time it takes to complete.
  9. Financial Advisor

    Tips on Passing the CFA Level I on Your First Attempt

    Obtain valuable tips and helpful study instructions that can help you pass the Level 1 Chartered Financial Analyst exam on your first attempt.
  10. Financial Advisor

    Tips For Passing The Series 6 Exam

    Find out what you can do during the test to make sure you get a passing score.
Frequently Asked Questions
  1. What does a Chief Financial Officer (CFO) do?

    A CFO is responsible for accurate reporting of a company's financial information, investing the company's money and identifying ...
  2. What Is the Difference between Tier 1 Capital and Tier 2 Capital?

    Tier 1 capital is a bank's core capital, whereas tier 2 capital is a bank's supplementary capital.
  3. How is the stock market affected by Thanksgiving and Black Friday?

    Thanksgiving and Black Friday sales numbers are considered to be important indicators for stock market activity throughout ...
  4. What is the difference between overdraft and cash credit?

    The primary differences between overdraft and cash credit lie in how they are secured and whether the money is lent out of ...
Trading Center