Series 63: Administrative Procedures (Ch. 4)
Making an intentional omission of material fact when recommending a security to a customer would be considered fraudulent if: A. a reasonable man would attach decision making importance to the omitted information B. the information was not available to the general public at the time that the recommendation was made C. the maker of the recommendation did not perform due diligence to determine the relevancy of the omitted information D. under the circumstances, the maker of the recommendation did not, and could not, have known of the importance of the omitted information to the buyer of the securities
A
Unintentional violations of the Uniform Securities Act are considered to be a: A. misdemeanor subjecting that person to civil liability only B. misdemeanor subjecting that person to civil liability and civil penalties C. felony subjecting that person to criminal liability only D. felony subjecting that person to criminal liability and criminal penalties
A
Which of the following falls under the jurisdiction of the Administrator of the State of New Jersey? A. The purchase of call options by a customer living in New Jersey via a Nebraska-based broker-dealer's Internet web site B. The sale of certificates of deposit by an Internet bank located in South Dakota to customers residing in the State of New Jersey C. The delivery of securities by DTCC located in New York to customers located in the State of New Jersey D. The redemption of mutual fund shares with the paying agent located in Massachusetts by customers located in the State of New Jersey
A
A broker-dealer that is not registered in a State sells non-exempt securities in non-exempt transactions to customers located in that State. That State's Administrator will: A. require that the securities be registered in the State and that the broker-dealer register in that State B. require the broker-dealer to make an offer of rescission to each purchaser in that State C. require that a notice filing be made in the State along with the payment of a filing fee D. institute an action in a court of law alleging criminal activities on the part of the broker-dealer
B
Suits alleging criminal violations of the Uniform Securities Act must be brought within: A. 3 years B. 5 years C. 10 years D. 15 years
B
The Administrator may not impose a penalty upon an agent who has violated the Act unless: A. the agent has been given the opportunity to withdraw his or her registration in that State B. the agent has been given the opportunity for a hearing in a court of law C. the Administrator gives at least 30 days' advance notice of such action D. scienter has been proven beyond a reasonable doubt
B
Which statement about penalties under the Uniform Securities Act is TRUE? A. Criminal liability may be offset by rescission; the statute of limitations is 3 years B. Civil liability may be offset by rescission; the statute of limitations is 3 years C. Criminal liability may be offset by rescission; the statute of limitations is 5 years D. Civil liability may be offset by rescission; the statute of limitations is 5 years
B
An Investment Adviser Representative has filed a registration application with the State, which the Administrator has denied. This could happen because the IAR was convicted of a: A. breach of the peace misdemeanor 5 years ago B. driving under the influence misdemeanor 8 years ago C. investment related misdemeanor 5 years ago D. shoplifting misdemeanor 8 years ago
C
An Investment Adviser is registered in both State A and State B, and has its principal office in State B. State A would be allowed to: I. review the Investment Adviser's books and records in State A II. review the Investment Adviser's books and records in State B III. require advertising and sales literature to be filed in State A IV. require advertising and sales literature to be filed in State B A. I and III only B. II and IV only C. I, II and III only D. I, II, III, IV
C
An agent sells unregistered non-exempt securities to a customer, and has the customer sign a waiver that states that the "customer is aware that the securities are being sold without registration in the state and the customer absolves both the broker-dealer and agent of any legal obligation for failing to comply with State law." Such a statement signed by the client: A. is permitted without restriction B. is permitted only after filing with the Administrator C. is null and void D. will subject the agent and broker-dealer to civil liability and possible criminal penalties
C
The Administrator will revoke the registration of an investment adviser if: A. a representative of the adviser becomes insolvent, meaning that he cannot pay his bills as they come due B. an officer of the adviser becomes insolvent, meaning that he cannot pay his bills as they come due C. the adviser becomes insolvent, meaning that the firm cannot pay its bills as they come due D. any of the above
C
The maximum fine that can be imposed for criminal violations of the Uniform Securities Act is: A. $2,000 B. $3,000 C. $5,000 D. $10,000
C
Which of the following statements about penalties under the Uniform Securities Act are TRUE? I. Criminal liability may be offset by rescission II. Civil liability may be offset by rescission III. The statute of limitations on criminal actions is 5 years IV. The statute of limitations on civil actions is 3 years A. I and III only B. II and IV only C. II, III, IV D. I, II, III, IV
C
Which of the following statements are TRUE about an offer of rescission? I. The offer can only be made prior to the institution of a lawsuit alleging a securities violation II. An offer must be made to buy back the security at the original purchase price III. The customer must be paid interest at the legal rate in the State, less any dividend or interest income received from that security IV. The customer must sign a waiver of non-compliance to accept the offer A. I and II only B. III and IV only C. I, II, III D. I, II, III, IV
C
Which statements are TRUE about the Administrator's investigation powers? I. The Administrator can conduct public investigations II. The Administrator can conduct private investigations III. The Administrator can conduct in-State investigations IV. The Administrator can conduct out-of-State investigations A. I and II only B. I and IV only C. I, II, III, IV D. II and IV
C
A person who offers or sells securities that result in a violation of Uniform State Law has civil liability to: I. buy back the security at the original purchase price II. pay any reasonable court and attorney's costs III. pay interest at the legal rate in the State for the period the security was held; reduced by any income derived from that security A. I only B. I and II only C. II and III only D. I, II, III
D
Actions that are violations of the Uniform Securities Act could cause that individual to be subject to: I. State government anti-fraud provisions II. Federal Government anti-fraud provisions III. Common law deceit provisions A. I only B. III only C. I and III D. I, II, III
D
If a broker-dealer's net capital falls below the minimum requirement for registration in a State, the Administrator has the power to: A. liquidate the assets of the firm and distribute the proceeds to the firm's customers B. petition a court of law to appoint SIPC as the trustee managing the distribution of the firm's assets C. freeze the assets of the firm D. make a proper showing to a court of law to appoint a receiver over the firm's assets
D
If an investment adviser is found to be insolvent, the Administrator has the power to: I. issue a cease and desist order, with or without a prior hearing, directing the investment adviser stop dealing with clients II. petition the court to issue a permanent injunction against a person from engaging in the investment advisory business III. make the showing required to appoint a receiver to protect the assets of customers held in custody of the investment adviser A. I only B. II only C. I and II D. I, II, III
D
Intentional or willful violations of the Uniform Securities Act that are considered to be a felony subject that person to: A. civil liability only B. civil liability and civil penalties C. criminal liability only D. criminal liability and criminal penalties
D
The Administrator has authority over transactions in all of the following EXCEPT the State where the: A. client resides B. agent resides C. transaction occurs D. broker-dealer maintains a bank account
D
The State Administrator is empowered to do all of the following EXCEPT: A. administer oaths B. subpoena witnesses C. conduct investigations D. incarcerate violators
D
Which statements are TRUE about civil suits brought under the provisions of the Uniform Securities Act? I. A civil suit may be brought by any person who has been damaged by the actions of a broker-dealer, investment adviser or their agents II. If the plaintiff wins the suit, the seller is liable to the buyer for the cost of the securities, any interest earned, legal fees, and court costs III. The seller will not be held liable by the court if, in the exercise of reasonable care, he or she could not have known about the untrue statement or misleading omission of fact IV. Third parties that have a financial interest in the seller's actions can also be held liable under the Act A. I and II B. III and IV C. I, II, III D. I, II, III, IV
D
Who administers the Uniform Securities Act? A. SEC B. MSRB C. FINRA D. NASAA
D
