Prohibited Activities
Prohibited-activity questions reward candidates who recognize customer harm, market deception, and document integrity problems quickly.
How to study the SIE
Learn the concept vocabulary first, then drill products, risks, rules, and prohibited-conduct patterns until they feel automatic.
Core concepts
Concept 1
Market manipulation includes rumors, pump and dump schemes, front running, marking the close or open, backing away, excessive trading, and freeriding.
Exam cue: If the conduct distorts price, demand, or execution, think manipulation.
Concept 2
Insider trading turns on material nonpublic information, involved parties, and severe penalties.
Exam cue: If material nonpublic information appears, stop and analyze insider trading.
Concept 3
Other prohibited activities include IPO restrictions, customer fund misuse, borrowing or sharing issues, senior exploitation, unregistered activity, false documents, and improper record maintenance.
Exam cue: If signatures, regulatory requests, or records are altered, document integrity is the issue.
Risk pitfalls and guardrails
Assuming customer permission cures all prohibited conduct.
Guardrail: Eliminate answers that sound financial but miss the exact SIE rule or product feature.
Missing front running when a representative trades ahead of a known customer order.
Guardrail: Eliminate answers that sound financial but miss the exact SIE rule or product feature.
Treating signatures of convenience as harmless paperwork.
Guardrail: Eliminate answers that sound financial but miss the exact SIE rule or product feature.
Memory anchors
Pump and Dump
Promote to inflate price, then sell into demand.
Front Running
Trading ahead of known customer or block activity.
Backing Away
Failing to honor a firm quote.
Freeriding
Buying and selling without paying as required.
Insider Trading
Trading on material nonpublic information.
MNPI
Material nonpublic information.
Senior Exploitation
Specified adult financial exploitation red flags require escalation.
Signature of Convenience
Improper signing or document shortcut.
Checkpoint rule
Do the check-up only after you can summarize each concept in one sentence and identify one dangerous pitfall from memory.
Knowledge Check (after reading)
Short check-up to confirm understanding of this module.
Check-up Questions
A promoter buys a thinly traded stock, spreads false claims online, then sells after the price rises. This scheme is
A trader knowingly circulates a false takeover rumor to move a stock's price. This conduct is
Answer all questions to submit.
Next step personalized recommendations
Continue learning
Move forward only after this module is stable.
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