Safekeeping and Commingling Prohibitions

What this video covers

• What commingling is and why mixing client assets with firm assets in the same account is prohibited for both broker-dealers and investment advisers
• The three safekeeping duties: segregated accounts for street-name securities, proper identification and recording of customer holdings, and free credit balances available for withdrawal on demand
• What conversion means and why taking client assets for personal use is theft, not merely a prohibited practice
• Why temporary borrowing from a customer account without authorization is always misuse, even if repaid the next day
• Why the Uniform Securities Act (USA) antifraud provisions apply to misuse of customer funds with absolutely no exemptions available
• How to distinguish commingling (mixing) from conversion (stealing) when the exam presents side-by-side scenario questions
• Why ignorance of the law does not shield a securities professional from civil or criminal liability under the USA