SIE Understanding Trading, Customer Accounts and Prohibited Activities Question 21: Answer and Explanation

Question: 21

Which of the following is addressed by 1934 Act Section 15c1-2 – Fraud and Misrepresentation?

• A. Short selling
• B. Virtually any deceptive act
• C. Stop order
• D. Asking to deposit or withdraw more than $10,000

Correct Answer: B

Explanation:

B: Choice B expresses the broad range of 1934 Act Section 15c1-2. Choice A refers to borrowing a security in order to sell it. This does not necessarily involve deceit. Choice C refers to an order which is to be executed promptly after the stop price is available on the market. This does not necessarily involve deceit. Choice D reflects the need to file a Currency Transaction Report (CTR). This does not necessarily involve deceit.