Exercise
Choose fraudulent or not fraudulent
- 1. _ An investment adviser fails to disclose facts about a financial condition that is not material to its effectiveness as a firm.
- 2. _ An investment adviser has a written agreement that allows it to pay cash to an independent solicitor for bringing clients to the firm.
- 3. _ An adviser purchases a security for his own account in advance of purchasing a large block of the same securities for a client. He makes this purchase because he expects the price of the security to get a boost from his client’s purchase.
- 4. _ An employee of a firm reports his securities holdings to the firm’s compliance office one week after first obtaining inside information.
Answers
- 1. Not fraudulent. Only financial conditions that are reasonably likely to imp