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Selling Dividends Meaning & Definition

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Definition of Selling Dividends

Selling Dividends is the act of using a pending dividend to create urgency for the customer to purchase a security. This is a violation and could result in action being taken against the representative.

Applying "Selling Dividends" to Securities Exams:

A representative who is seeking to increase their commissions for the month may try to entice an investor to purchase a security sooner rather than later so that they receive a dividend that has been declared for payment to shareholders. The is any example of a violation and is considered to be an unethical practice.

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