One of your fellow investment adviser representatives (IAR) recently turned a large profit on the sale of a security. You overhear him discussing the sale with another employee. He says that he purchased the security from the firm's account and after the transaction was complete, he began recommending the security to all of his clients some of whom purchased large blocks of the specified security. After all of the clients willing to make the purchase had done so, he sold his shares for a large profit. Which of the following is the most serious violation that the IAR committed?
A. The IAR engaged in profit taking
B. The IAR engaged in front running
C. The IAR excessively traded the accounts
D. The IAR made unsuitable recommendations to his clients

Investment Adviser are simply individuals who offers advice/analyses on securities and they are involved offering such advice (even if it's not the primary service offered). They also receives compensation for these services that is rendered. Their services also include consultation as they give advise on pension plan, sports and investments.

The SEC do offer or restricts distribution participants (underwriters and issuers) from bidding for or making secondary market purchases of the stock that is being offered in a distribution.

Front Running

This is simply said to be the act of placing a broker's personal orders ahead of a customer's large order so as to make a profit from the market effects of the trade and also when a broker who buys himself shares in a stock just before his brokerage plans to buy a large block of share.