All of the following statements regarding penny stocks are true except:

The correct answer, regarding penny stock transactions, highlights that penny stock rules indeed apply to both solicited and unsolicited transactions. This means that whether a broker is actively recommending a penny stock to a customer (solicited) or a customer is requesting a transaction on their own (unsolicited), the same regulations and protections are in place to safeguard against the high risks associated with penny stocks.

Penny stocks are characterized by their low trading price, which usually means that they are more volatile and less regulated compared to stocks of established companies. Given this context, regulatory bodies, including the SEC and FINRA, enforce strict guidelines to ensure that investors are fully informed about the risks involved, regardless of the nature of the transaction.

In contrast, the other statements related to penny stocks are correct and reflect the regulatory measures designed to protect investors. Monthly statements must be provided for transparency, suitability statements are essential for new customers, and risk disclosure documents are required prior to any initial transactions. Understanding these requirements is crucial for anyone involved in trading penny stocks, emphasizing the need for due diligence and awareness of the inherent risks.