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Mr. Noah Scruples is a registered representative with CanDo Broker-Dealers. A client calls and wants Noah to purchase shares of a mutual fund the client has read about. CanDo is not authorized by this particular fund to effect purchases or sales of the fund shares.
Can Noah execute the order anyway?
Suggested Answer: B
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No. If CanDo is not authorized to effect purchases and sales of the fund, Noah would be engaged in the prohibited practice known as selling away if he were to execute the order. If his broker-dealer is not authorized to trade a security, Noah can't either.
32 comments · newest first
BI
Billye
11 months ago
I thought unsolicited trades were allowed sometimes?
MO
Moon
11 months ago
Totally agree, he can't do that!
WE
Wendell
11 months ago
Wait, is it really illegal?
FR
Francine
11 months ago
Definitely not money laundering, but still a no-go!
MI
Michael
11 months ago
No, that's selling away.
BO
Bong
12 months ago
I feel like this could be an unsolicited trade, but I’m not completely sure if that makes it okay. I need to think more about the rules around that.
TE
Terry
12 months ago
I practiced a similar question about unauthorized trades, and I think the answer is definitely no. Noah can't just execute the order like that.
GI
Gilbert
1 year ago
I'm a bit unsure, but I think this situation might relate to "selling away." It seems like Noah would be violating some rules if he went ahead with it.
TA
Tamala
1 year ago
I remember discussing the importance of being authorized to trade specific funds. I think Noah can't execute the order if CanDo isn't authorized.
CA
Cammy
1 year ago
Okay, let me walk through this step-by-step. Noah can't execute the trade because CanDo is not authorized to sell this particular mutual fund. That means option D is incorrect. The prohibited practice here is selling away, so B is the right answer.
MA
Mabel
1 year ago
I'm pretty confident that the correct answer is B. Selling away is not allowed, even if the client is requesting the trade. Noah has to follow the firm's policies.
AU
Augustine
1 year ago
Hmm, I'm a bit confused on this one. I need to think through the different options carefully to make sure I understand the prohibited practices involved.
LA
Lacey
1 year ago
This seems like a straightforward question. The key is understanding that selling away is prohibited, so Noah cannot execute the trade.
WI
Wilburn
1 year ago
Unsolicited trade, huh? Sounds like Noah's client is trying to pull a fast one. Better shut that down, Noah!
SH
Shawnee
1 year ago
B) No. This is a prohibited practice known as selling away.
LA
Lachelle
1 year ago
A) No. This would be considered money laundering, which is highly illegal.
LA
Lavonna
1 year ago
B) No. This is a prohibited practice known as selling away.
JE
Jesse
1 year ago
A) No. This would be considered money laundering, which is highly illegal.
AR
Ardella
1 year ago
Money laundering? Ha! I thought this was supposed to be a simple mutual fund purchase. Noah's got to keep it clean and legal.
ME
Melina
1 year ago
Front running? That sounds like some kind of stock market shenanigan. Noah better steer clear of that.
GL
Glen
1 year ago
Selling away? What is this, a spy movie? Noah's got to play by the book on this one.
BE
Beula
1 year ago
C) No. This is a prohibited practice known as front running.
AN
An
1 year ago
Selling away is when a broker sells securities not approved by their firm. It's a big no-no.
DI
Dierdre
1 year ago
B) No. This is a prohibited practice known as selling away.
RE
Reynalda
1 year ago
A) No. This would be considered money laundering, which is highly illegal.
KE
Kenia
1 year ago
I think it's risky to go against the regulations. It's better to be safe than sorry.
CO
Corazon
1 year ago
I agree with Hui. It's important to follow the rules and not engage in prohibited practices.
HU
Hui
1 year ago
B) No. This is a prohibited practice known as selling away.
DE
Deeanna
1 year ago
No way, that's definitely selling away! Noah can't do that, it's against the rules.
CO
Corazon
1 year ago
No way, that's definitely selling away! Noah can't do that, it's against the rules.
XO
Xochitl
1 year ago
B) No. This is a prohibited practice known as selling away.
BE
Benton
1 year ago
A) No. This would be considered money laundering, which is highly illegal.