Conflicts of Interest, Criminal Activities, and Fiduciary Considerations

What this video covers

• Why an agent may never borrow from or lend to a client, while an investment adviser (IA) has narrow exceptions limited to broker-dealers, affiliates, and financial institutions
• The difference between sharing in a customer's account profits or losses (requires written authorization from both the customer and the employing broker-dealer) and splitting commissions (no authorization path exists; registration status and common control govern)
• Why disclosure does not cure a prohibited commission split, and why common control between broker-dealers is the exception students most often forget
• The three criminal activities of wash trading, matched orders, and marking the close, and what each requires
• Why mere possession of material nonpublic information (MNPI) is not insider trading; liability requires trading on the basis of MNPI in breach of a duty of trust or confidence
• Why churning requires adviser control, not just a high trade count, and how the turnover rate and cost-to-equity ratio measure it
• The mandatory duties and permissive options under vulnerable-adult protections, including the 15-business-day disbursement hold extendable to 25 business days