Exam CFE-Law Topic 4 Question 188 Discussion

Actual exam question for ACFE's CFE-Law exam
Question #: 188
Topic #: 4
Which of the following is the MOST ACCURATE statement about rules prohibiting securities broker-dealers from making unsuitable recommendations on investments or investment strategies?

Suggested Answer: D Vote an answer

This question tests your knowledge of Domain 4.
In the context of Securities Fraud, specifically relating to securities, unsuitable recommendations, the question asks about MOST ACCURATE, rules prohibiting securities broker-dealers from making unsuitable recommendations on investments or investment strategies.
The correct answer is D: A suitability violation occurs when a broker enters into transactions and manages a client's account for the purpose of generating excessive commissions.
This question tests knowledge of securities fraud and regulation. The correct answer accurately describes the role of regulatory bodies, securities laws, or fraud schemes in this context. Securities fraud is a specialized area requiring knowledge of specific regulations and oversight mechanisms.
References:
- CFE Exam Content Outline: Domain 4: Securities Fraud
- securities
- unsuitable recommendations
- Fraud Examiners Manual, Law Section

by pocekic378 at Mar 29, 2026, 07:09 AM

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pocekic378
2026-03-29 07:09:19
Selected Answer: B
D – This refers to churning (excessive trading to generate commissions), not suitability. Correct answer is B
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