SIE Exam Question 331: Answer and Explanation

Question: 331

A representative's personal account has been identified for review because of account activity in which securities were bought and quickly sold, often on the following day. This may be evidence of the prohibited practice called

• A. front-running.
• B. selling away.
• C. commingling.
• D. freeriding.

Correct Answer: D

Explanation:

D - Freeriding is the prohibited practice of entering a trade to buy securities, then selling them the following day without having had sufficient funds in the account to pay for the trade.