Question

In processing orders, an operations professional sees that a customer purchased $24,999 in mutual fund shares today. The operations professional discovers that a reduced sales charge would have been available to the customer had the customer purchased just one additional share of the fund. In a scenario such as this, the RR handling the account may have committed which of the following violations?

Fraud
Breakpoint sale
Wash Sale
Trading ahead

Answer 1

The answer is: Breakpoint Sale

Step-by-step explanation:

A breakpoint sale violation occurs when a RR sells mutual fund shares to a client and doesn't disclose reduced sales charges that the client would qualify for if they had bought just a few more shares. In this case the client could have qualified for a discount if he had just bought one more share, and could have saved money instead of paying higher charges.