SERIES 66 EXAM ASKS QUESTIONS ON FIDUCIARY VIOLATIONS AND UNETHICAL PRACTICES, INCLUDING CRIMINAL ACTIVITIES

NASAA publishes a Series 66 Test Specifications and Content Outline that indicates areas that a Series 66 candidate can expect to see on the test. Section IV (H) (4) of the Content Outline lists six lines of conflicts of interest, and prohibited, unethical or criminal acts or behavior.

Here is a real-life example of Unethical and/or Prohibited Activity from the Securities and Exchange Commission, SEC Release 2023-33:

FOR IMMEDIATE RELEASE
2023-33

Washington D.C., Feb. 16, 2023 —

The Securities and Exchange Commission today charged Milan Vinod Patel, of Cumming, Georgia, for spreading more than 100 false rumors about public companies to generate more than $1 million in illicit trading profits. The SEC previously charged Barton Ross, Mark Melnick, Anthony Salandra, and Charles Parrino for their roles in this scheme.

According to the SEC’s complaint, Patel received rumors that he knew to be false from Ross, Salandra, or Parrino about purported market-moving events, such as corporate mergers or acquisitions, involving publicly-traded companies, and disseminated the rumors to his contacts at financial news services, chat rooms, and message boards. Patel also disseminated the rumors to Melnick, a host of a stock trading webcast, who shared them with his webcast subscribers. The circulation of more than 100 rumors between December 2017 and January 2020 caused the prices of the subject companies’ securities to rise temporarily, which allowed Patel to sell his holdings in such securities and generate more than $1 million in illicit trading profits.

"Out of the five individuals involved in this scheme, we allege that Patel played the central role of using his contacts to repeatedly spread the false rumors via the internet, generating more than $1 million in illicit profits for himself," said Joseph G. Sansone, Chief of the Enforcement Division’s Market Abuse Unit. "Today’s action seeks to hold Patel accountable for his alleged misconduct and serves as a warning to others who might engage in similar schemes."

Bob Eder devotes an entire chapter to Unethical Practices and Fiduciary Violations in his Study for the Series 66 Exam. 

Here is the link to NASAA's Content Outline and Test Specifications for the Series 66 exam. See Section IV (H) (4) on Unethical and/or Prohibited Activities.

Study for the Series 66 Exam is available from Amazon in both paperback and Kindle e-book versions. Here is the link to Bob Eder's book on Amazon.

For questions about Bob Eder's Series 66 study manual, Study for the Series 66 Exam, or questions in general about the Series 66 exam, or on Unethical and/or Prohibited Activities, feel free to email Bob Eder at bobeder@bobeder.net.

Bob Eder received his Juris Doctor (J.D.) degree from the University of Utah, Quinney College of Law, in 2001. See Bob Eder's Author Page on Amazon.com.