October 2020 (AM) — Question 3
In which scenario would the XYZ Brokers Corporation be in violation of 19 CFR 111.24?
- AXYZ Brokers failed to have a licensed broker on staff for 30 days
- BXYZ Brokers failed to submit the name of a terminated employee
- CXYZ Brokers failed to attain a permit
- DXYZ Brokers disclosed a client’s personal records to another brokerage✓ CBP's answer
- EXYZ Brokers hired an employee who once worked for a US government agency
Why this answer
19 CFR 111.24 is the confidentiality-of-records provision: the records a broker holds relating to clients' business are confidential, and the broker must not disclose their contents to anyone other than the client except as authorized, such as in response to a proper government demand. Disclosing a client's records to another brokerage therefore violates the cited section directly. The other scenarios implicate different rules — staffing lapses, employee reporting, and permits are governed by other sections of part 111 — so they cannot violate 111.24, and hiring a former government employee is not by itself a violation of anything. Option A tempts candidates who forget the question targets 111.24 specifically. Watch for: Answering with any real violation instead of the one that breaches the confidentiality rule.
Original CBLE Simulator explanation — the question and key above are CBP's; this analysis is ours. Verify against the current edition before relying on it in practice.
CBP's cited authority
Answer and citations as published in CBP's official answer key for the October 2020 (AM) examination.
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