An institutional hedge fund customer has invested $100 million with your brokerage firm in the Madison Family of Funds. Madison allows its shareholders to exchange shares of any fund within the family at no charge. NAV of each fund in the family is computed as of 4:00 PM ET. The fund processes orders received until 4:30 PM ET each day. A representative with an institutional hedge fund client notices that this customer has been placing daily orders at 4:15 PM to exchange fund shares within the family. Which statement is TRUE regarding this situation? a. The registered representative should make the customer aware of the tax consequences of exchanging mutual fund shares
b. It appears that the hedge fund customer is engaging in the prohibited practice of late trading of mutual fund shares
c. Because the customer is a large institutional investor, it qualifies for a "sophisticated customer" exemption from regulatory oversight
d. This institutional customer has violated its fiduciary responsibility to the other shareholders of the fund by engaging in the prohibited practice of market timing of mutual fund shares