Fraudulent activity whereby a broker fails to disclose information to a party to whom the broker has such a duty, and that is material to their decision. (broker must disclose any fact, report, or rumor to the principal, and must do the same for customer if he knows customer is ignorant of a fact)

• A. Concealment
• B. Mitigating circumstances
• C. Breach of Trust
• D. Aggravating circumstances

Answer: (A)

The key idea is concealment: withholding information that a broker has a duty to disclose when that information is material to the other party’s decision. When a broker knows facts, reports, or rumors that could influence a principal or a customer, and fails to disclose them, that omission can be fraudulent because it misleads the party about a important factor in the decision process. If the broker knows the customer is ignorant of a fact and still withholds disclosure, the duty to inform is even clearer, reinforcing the concealment.

Mitigating and aggravating circumstances describe factors that affect blame or severity in a legal sense, not the act of withholding material information. Breach of trust is a broad term, but the specific fraudulent act described here is best captured by concealment, which focuses on the omission of information the broker has a duty to share.