Series_63 Free Dumps Study Materials
Question 10: Which of the following is an example of commingling?
A. Sly is an agent with a broker-dealer who recently executed a stock purchase for his client and had
the
client make the check for the purchase out to Sly for deposit in Sly's broker-dealer account.
B. In order to generate more commissions for herself Ms. Fox makes trades on some of her client's
accounts and has the trade confirmations sent to a P.O box she owns.
C. Mr. Hawk encourages his clients to leave their securities in "street name" with the broker-dealer
for
which Mr. Hawk works.
D. All of the above are examples of commingling.
Correct Answer: A
Explanation: When Sly has his client pay for a stock purchase by making the check out to Sly himself,
he
has engaged in the prohibited practice of commingling. Ms. Fox is also engaged in a prohibited
practice,
but she is engaged in making unauthorized transactions. Mr. Hawk is doing nothing wrong. It is
typical for
clients to leave securities on deposit with their broker-dealers in what is called "street name." This
makes
it easier for the client to sell the securities later on since he physically will not have to deliver the
securities
to the broker, for one thing.