Which of the following statements is false?

• A. A 'broker' is a person who engaged in the buying and selling of securities for the accounts of others.
• B. A 'dealer' is a person who is casually engaged in the buying and selling of securities for his own account.
• C. An 'associated person of a broker or dealer' does not include the employees of the broker or dealer whose functions are solely clerical or ministerial.
• D. An 'associated person of a broker or dealer' does not include his salesman performing nondiscretionary functions.

Answer: (B)

The key idea here is how broker, dealer, and associated person are defined and who falls into each category. A broker is someone who effects transactions in securities for the accounts of others. A dealer is someone who buys and sells securities for his own account as part of his business. An associated person includes employees of the broker or dealer, with certain exclusions for those whose functions are purely clerical or ministerial.

The statement about a dealer being casually engaged in buying and selling for his own account is false because a dealer is defined by operating in the business of dealing for his own account, not by casual activity. That makes the “casually engaged” description incorrect.

The other statements align with the definitions: a broker handles transactions for clients; an associated person excludes employees whose duties are solely clerical or ministerial; and a salesman performing nondiscretionary functions is still considered an associated person unless those functions are purely clerical/ministerial.