Prohibited Transactions of Investment Advisers

What this video covers

• Why an email can satisfy the interstate-commerce jurisdictional hook, and why registration status is not the test for the investment adviser antifraud provision
• The two limbs of the broker-dealer exclusion: advice must be solely incidental, and the firm must receive no special compensation
• Why compensation is an element of the investment adviser definition itself
• The four antifraud prohibitions, including defrauding, fraud or deceit in practice, undisclosed principal and agency cross-trades, and fraudulent, deceptive, or manipulative conduct
• The exam distinction between using a device, scheme, or artifice to defraud and conduct that operates as a fraud or deceit
• Why prospective clients are covered by the first two prohibitions, even before a formal advisory relationship exists
• How principal trades differ from agency cross-trades, and why written disclosure and consent must cover the specific transaction before completion