Finra
Which of the following practices is prohibited under securities regulations?
Prohibited: guarantees against loss, sharing in losses, repurchase guarantees.
Complete Analysis & Legal Rationale
Guaranteeing to repurchase shares at the purchase price (or any guaranteed price) is prohibited because it shields the investor from normal market risk. Such guarantees against loss are considered fraudulent practices under securities laws.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Recommending suitable investments is required and proper practice.
Matches the verified teaching point in the explanation.
Providing educational materials is encouraged.
Disclosing material facts is required, not prohibited.
Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA materials.