Ethical Practices and Professional Conduct

Ethics questions often look simple until the fact pattern adds a conflict, unsuitable recommendation, or misuse of information. The Series 7 expects you to recognize when conduct crosses the line from poor practice into a regulatory violation or breach of duty.

This chapter moves from FINRA standards and conflicts of interest into prohibited conduct, insider-trading rules, and the broader professional duties representatives owe to customers and the market.

In this section

• FINRA Code of Conduct
  Review standards of commercial honor, fair dealing, and the basic ethical expectations that govern registered representatives.
• Conflicts of Interest
  Understand disclosure duties, conflict management, and how competing incentives can distort recommendations.
• Prohibited Activities
  Review churning, unauthorized transactions, misrepresentations, selling away, and other prohibited conduct.
• Insider Trading and Material Nonpublic Information
  Understand MNPI, insider-trading prohibitions, and the civil and criminal consequences of misuse.
• Professional Duties and Responsibilities
  Review duties of care, loyalty, and fiduciary-style obligations that shape representative conduct.