GISI Foundation Practice Questions - GISI Securities Course Foundation Level Exam

Which of the following scenarios describes the ethical violation known as 'churning'?

An advisor executes excessive trades in a client's discretionary account primarily to generate commission income for the firm. An advisor delays the execution of a client's sell order to allow their own account to sell first. A broker-dealer spreads negative rumors about a competitor firm to win over their clients. An issuer fails to disclose a significant drop in quarterly profits before launching an IPO.

Correct Answer:

An advisor executes excessive trades in a client's discretionary account primarily to generate commission income for the firm.

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