Practice exams

As found in the Uniform Securities Act, which of the following would not be an issuer? A) A person who has proposed to issue a security but has not yet issued it B) A finance company offering promissory notes C) A metal refinery whose stock is traded in the OTC market D) A smelter producing gold bullion for sale to investors

A smelter producing gold bullion for sale to investors its a commodity

Which of the following transactions would not be exempt under the Uniform Securities Act? A) A registered dealer sells Canadian government securities to an individual client. B) Securities are sold that were collateral for a defaulted loan. C) The executor of an estate sells securities to liquidate the property. D) A customer calls his broker-dealer to order a specific security.

A) A registered dealer sells Canadian government securities to an individual client. security exempt not transaction

Under the Uniform Securities Act, which of the following are considered a sale or an offer to sell? I. The gift of assessable common stock II. The gift of nonassessable stock III. The sale of a warrant to purchase stock A) I and III B) III only C) I, II, and III D) I and II

A) I and III The gift of assessable stock (a rarity) is considered both an offer and a sale under the USA because the recipient could be assessed in the event of company bankruptcy. The sale of a warrant is legally no different from the sale of the stock.

Broker-dealers with no place of business in a state are not required to register in that state if their only clients in that state are A) life insurance companies. B) corporations whose shares are listed on the New York Stock Exchange. C) agents of broker-dealers registered in the state. D) investment advisers registered in the state.

A) life insurance companies. Insurance companies are included in that group of institutional investors, but investment advisers are not included

A registered broker-dealer is under common control with a registered investment adviser. An individual who is an agent of the broker-dealer and an investment adviser representative of the adviser has a client with $250,000 under an asset management program. This individual calls the client and suggests the purchase of 500 shares of RMBM common stock as an appropriate addition to the portfolio. The broker-dealer is a market maker in RMBM, and the sale will be made as a principal, a fact that is disclosed to the client on the trade confirmation. In this situation, the registered person has acted A) unethically in that investment advisers are required to make written disclosure and receive the advisory client's consent prior to completion of a trade where the firm or an affiliate will be acting in a principal capacity. B) unethically in that any stock the broker-dealer is a market maker in is probably not suitable for a managed money client. C) ethically in that the disclosure of capacity was made on the confirmation. D) ethically in that the disclosure of capacity is not necessary when executing trades in managed accounts.

A) unethically in that investment advisers are required to make written disclosure and receive the advisory client's consent prior to completion of a trade where the firm or an affiliate will be acting in a principal capacity.

An investment adviser with no place of business in the state has 10 clients in the state. For which one of the clients would registration be required? A) An insurance company B) A governmental agency C) An individual with net worth in excess of $1 million D) An investment adviser

An individual with net worth in excess of $1 million

Which of the following are federal covered securities? I. A security quoted on the Nasdaq Stock Market II. Shares of an investment company registered under the Investment Company Act of 1940 III. A security offered under the exemption provided by Regulation D of the Securities Act of 1933 IV. A security that has a federally imposed exemption from state securities registration A) I and III B) I, II, III, and IV C) I and II D) III and IV

B) I, II, III, and IV Any Nasdaq security, shares of a registered investment company, a security offered under the private placement exempt of Regulation D of the Securities Act of 1933, a security that has a federally imposed exemption from state securities registration, and a security traded on a regulated exchange are all federal covered securities.

Platinum Investment in Growth Group, Inc. (PIGGI) is registered as an investment adviser in State W, where it has its principal office. PIGGI has near-term plans to open offices in States A and B. In an effort to test the waters, PIGGI mails several hundred flyers to prospects in those two states. Under the Uniform Securities Act, A) as long as PIGGI did not maintain an office in either of these states, the flyers could be mailed. B) these flyers could not be mailed until PIGGI was registered in States A and B. C) these flyers could be mailed, but no accounts can be opened until PIGGI is registered in States A and B. D) as a federal covered investment adviser, the flyers would need filing with the SEC.

B) these flyers could not be mailed until PIGGI was registered in States A and B. Any attempt to hold oneself out as offering investment advice as part of a business would require the person to be registered in the state, unless that person qualifies for an exclusion or exemption. Nothing in this question implies that an exclusion or an exemption applies. We know that PIGGI is not a federal covered investment adviser (and therefore does not need to file its flyers with the SEC) because we are told it is registered in State W—federal covered advisers don't register in any state.

Which types of accounts are billed a single fee that includes a group of services such as, execution of transactions and advice? A) Discretionary account B) Option account C) Wrap fee account D) Margin account

C) Wrap fee account

The compliance officer of a broker-dealer notices that an agent has been purchasing shares of KAPCO common stock for customer accounts over the past two months. Further investigation reveals that over 73% of the agent's clients have this stock in their accounts. This might be an indication of A) commingling. B) churning. C) not following proper suitability rules. D) use of inside information.

C) not following proper suitability rules.

Which of the following statements regarding an agent's registration is correct? A) If the broker-dealer with which that agent is registered should have its registration revoked, the agent's license will be held by the Administrator and the agent will be required to register with an active broker-dealer within 30 days. B) If the broker-dealer with which that agent is registered should have its registration revoked, the agent may continue to do business only with existing clients and may not acquire any new ones until registered with an active broker-dealer. C) Registration of a broker-dealer in a specific state automatically registers all of the firm's agents in that state as well. D) Revocation of the registration of that agent's broker-dealer will result in cancellation of that agent's effective registration.

D)Revocation of the registration of that agent's broker-dealer will result in cancellation of that agent's effective registration.

An agent receives an order from a client to purchase $20,000 worth of stock in whatever company looks good. In what type of account could the agent accept this type of order? A) Discretionary B) Custodial account managed by an administrator for the client's deceased cousin C) Margin D) Cash

Discretionary

Typical broker-dealer fees that must be disclosed as part of a fee disclosure document would include I. a charge when a client requests that a stock certificate be issued in his name. II. a commission charge when a client buys a security on a listed exchange. III. the interest charged by the firm on money owed by customers in their margin accounts. IV. fees for providing advisory services to high-net-worth individuals. A) II and III B) III and IV C) I and III D) I and IV

I and III If we know what charges are not included in the fee disclosure, it is easy to recognize those that are. There are three primary expenses involved with brokerage accounts that are not included in the fee disclosure template. Those are commissions; markups and markdowns; and advisory fees for those firms that are also registered as investment advisers.

Under the NASAA Statement of Policy on Dishonest or Unethical Business Practices of Broker-Dealers and Agents, a broker-dealer may charge a reasonable fee for I. appraisals. II. transfers. III. collection of dividends. IV. safekeeping. A) III and IV B) I and II C) II and III D) I, II, III, and IV

I, II, III, and IV

Under the Uniform Securities Act, the Administrator has the power to deny or revoke exemptions for which of the following types of securities? I. Stock issued by a bank organized under the laws of another state II. Securities of nonprofit organizations III. Investment contracts issued by employee benefit plans A) I, II, and III B) II only C) I and II D) II and III

II and III

One of the major differences between identity theft and physical theft is that, in the case of identity theft, A) unless hospitalization is required, law enforcement is generally unconcerned about identity theft. B) the victim can usually correct the problem much quicker than with physical theft. C) the cost of the damages is generally much less. D) it might not be discovered for some time.

it might not be discovered for some time.

A client with a margin account notifies an agent of his vacation next week. The day after the client departs, there is a substantial market sell off, and the drop in value of the client's portfolio requires additional margin in the client's account immediately. Which of the following actions of the agent would not be prohibited? A) Doing her best to reach the client and, if unsuccessful, notifying her supervisor, who will direct that sufficient securities in the account be liquidated to meet the margin call B) Contacting the client's banker and arranging a loan on behalf of the client to meet the margin call C) Lending the client sufficient funds to meet the margin call D) Transferring funds from the client's spouse's account to meet the margin call

A) Doing her best to reach the client and, if unsuccessful, notifying her supervisor, who will direct that sufficient securities in the account be liquidated to meet the margin call a not question

Delivery of the brochure and related brochure supplements required by subsections of the NASAA Model Rule on investment adviser brochures need not be made to clients who receive only impersonal advice and who pay less than A) $200 per year in fees. B) $500 per year in fees. C) $1,000 per year in fees. D) $1,200 per year in fees.

B) $500 per year in fees.

The Uniform Securities Act defined many terms. Among them is the term sale. Which of the following would be included in the definition of sale? I. An offer of common stock in a new issue properly registered or exempt from registration in the state II. A gift of assessable stock III. An investor exercising preemptive rights previously received directly from the issuer IV. An investor electing to forgo a cash dividend and receive the equivalent in stock instead A) I and II B) II and III C) III and IV D) I and IV

B) II and III A gift of assessable stock is always considered a sale. Although the receipt of preemptive rights is not a sale, the exercise of them is. An offer does not become a sale until the exchange of consideration. Choosing to take a stock dividend rather than a cash dividend is not a sale.

Under the Uniform Securities Act, any person engaged in the business of effecting transactions in securities for the accounts of others or for his own account is the definition of A) an investment adviser. B) a broker-dealer. C) a stock trader. D) an agent.

B) a broker-dealer.

Disclosure to customers of a control relationship between a broker-dealer and the issuer of the security recommended is required in I. agency transactions. II. principal transactions. III. exempt transactions. A) II only B) I and II C) I and III D) I, II, and III

D) I, II, and III

An investment adviser hires two individuals to solicit new customers for the firm's wealth management service. Under the Uniform Securities Act, A) soliciting is generally prohibited. B) they may begin soliciting as soon as they have passed their licensing examinations. C) both of them would have to register as investment advisers. D) registration as investment adviser representatives is required.

D) registration as investment adviser representatives is required.

Which of the following would not be considered an agent under the Uniform Securities Act? A) A broker-dealer who transacts business with the general public B) An individual working for a broker-dealer who sells commercial paper to wealthy individuals C) An individual who sells foreign securities required to be registered with the state D) A natural person who sells variable life insurance policies as an employee of a life insurance company authorized to do business in this state

A) A broker-dealer who transacts business with the general public The definition of an agent specifically excludes broker-dealers. Agents are individuals who sell securities on behalf of BDs or issuers. The fact that commercial paper is exempt and that the sales are to wealthy individuals is not important. Variable life insurance is considered both an insurance and securities product, requiring licensing as an insurance agent and a securities agent. Anyone working for a BD selling securities is acting in the capacity of an agent.

Heritage Planning Services (HPS) is registered as an investment adviser in three states. The firm's business model is preparing custom financial plans for its clients. HPS charges an up-front fee for the initial plan and an ongoing annual management fee of ¾% of assets under management. After a detailed asset-gathering session, a new client is sent a 40-page comprehensive financial plan and told that this plan requires a fee of $2,500 at signing. One week later, after reviewing the plan, the client comes to the HPS office, signs the contract, delivers a $2,500 check and receives the most recent copy of HPS's brochure. Three days later, the client has second thoughts and contacts HPS with instructions to cancel the contract. According to the Uniform Securities Act, which of the following statements is correct? A) HPS must cancel the contract and must refund the $2,500 fee. B) HPS must cancel the contract but may keep the fee for the planning document. C) The contract is binding, and HPS has no obligation to return any fees collected. D) HPS must cancel the contract but may keep a reasonable amount to cover the cost of the customized plan.

A) HPS must cancel the contract and must refund the $2,500 fee. We know that HPS is a state-registered investment adviser rather than a federal covered IA because the firm is registered in three states. Although it appears that much work was done in advance, the IA's brochure was not delivered until the time of the signing of the contract. Unless the brochure is delivered at least 48 hours in advance of entering into an advisory contract, the USA specifies that the client may cancel without penalty within five business days. That means the up-front fee cannot be kept. The firm must return that $2,500 fee. This is commonly known as the 48-hour rule because any time the client does not receive the adviser's brochure at least 48 hours prior to entering into the contract, this refund right is in effect. There is no comparable rule under federal law; this applies only to state-registered investment advisers.

Examples of identity theft include I. taking over an individual's credit card account. II. applying for new credit cards in the compromised individual's name. III. lending money in the name of the compromised individual. IV. purchasing lottery tickets in the name of another individual. A) I and II B) I and IV C) II and III D) III and IV

A) I and II When an individual's identity is stolen, it is common to find that the thief takes over the current credit card accounts and also applies for new ones. Identity thieves borrow money in the name of the compromised individual; they don't lend it, and although buying a lottery ticket in the name of someone else could help evade taxation on a big prize, the publicity attached to the winning ticket would certainly not be something the thief would relish.

The Administrator in State T has jurisdiction over an offer made I. on a radio program originating in State T. II. on a radio program originating in State O. III. in a newspaper circulated in State T but published in State O. A) I only B) I, II, and III C) III only D) I and II

A) I only only where it originates

Under the Uniform Securities Act, which of the following are not considered investment advisers or investment adviser representatives in this state? I. An individual who sells advisory services in several states, including this one, for AAA Advisers, Inc. II. United Trust Company of America III. An agent for a broker-dealer advising customers for a fixed separate fee stated as a percentage of the customer's assets under management IV. An investment adviser with no office in the state that does business exclusively with other investment advisers located in the state A) II and IV B) I, II, III, and IV C) I and II D) IV only

A) II and IV An agent for a broker-dealer advising customers for a fixed fee, stated as a percentage of the customer's assets under management, is acting as an investment adviser representative. An individual who sells advisory services for AAA Advisers, Inc., is an IAR. A trust company is not an investment adviser under the USA. An IA with no office in the state, that does business exclusively with other IAs located in that state, is also excluded as an IA under the USA.

One of your clients has called you to discuss an interesting investment opportunity discovered on one of the LinkedIn groups she participates in. Which of the following factors might increase the likelihood that this is a scam? I. A registration statement with the SEC is available on the website of the proposed investment. II. The purchase money must be wired to an offshore account. III. One of the members of the group is a principal in the company being offered. IV. Bonus shares are offered for recruiting friends into the deal. A) II, III, and IV B) I and III C) I, II, III, and IV D) II and IV

A) II, III, and IV

Which of the following statements regarding registration provisions is not true? A) The Administrator may not, as a condition of registration by qualification or coordination, require that the security be deposited in escrow and the proceeds be impounded until the issuer receives a specified amount. B) The Administrator may, as a condition of registration by qualification or coordination, rule that the securities may only be sold on a specified form of subscription and that a signed copy be filed with the Administrator. C) Every registration must specify the total amount of securities offered, the states in which offering is to be made, and any adverse order or judgment by a regulatory authority. D) The Administrator may, by order, permit omission of items of information or documents from a registration statement.

A) The Administrator may not, as a condition of registration by qualification or coordination, require that the security be deposited in escrow and the proceeds be impounded until the issuer receives a specified amount. bc it says not, but the admin can

Under the Uniform Securities Act, the definition of a broker-dealer includes A) a person in the business of making trades in his own account or for the accounts of others. B) an agent handling principal transactions with major institutional clients. C) an authorized representative of the issuer who receives a commission. D) a trust company when executing transactions in accounts in which it does not act in a fiduciary capacity.

A) a person in the business of making trades in his own account or for the accounts of others.

Under the Uniform Securities Act, the term broker-dealer would include A) a person with no office in the state who effects securities transactions with no more than five individual residents of the state in any 12-month period. B) a person with no office in the state who effects securities transactions with over 50 different banks domiciled in the state. C) agents registered under the act who from time to time sell stock from their personal brokerage accounts. D) an issuer distributing its own common stock offering.

A) a person with no office in the state who effects securities transactions with no more than five individual residents of the state in any 12-month period.

It would be considered an unethical business practice under NASAA's policies for an investment adviser to charge fees A) based on a percentage of the change in value of funds from quarter to quarter. B) based on an hourly rate. C) based on a percentage of the aggregate value of funds under management. D) as well as commissions.

A) based on a percentage of the change in value of funds from quarter to quarter. Unless a specific exception is referred to in the question, fees based on a share of appreciation in an account are prohibited. The other choices are acceptable fee structures. An investment adviser may charge commissions and fees, as long as the fact is clearly disclosed.

ABC Advisers is in the business of providing investment advice to retail customers. ABC's only office is in State A. Three of ABC's customers are residents of State B, but ABC is not required to register in that state. The most probable reason is because ABC Advisers A) is exempt from registration in State B. B) limits its business in State B to accredited investors. C) is excluded from the definition of an investment adviser. D) is registered with FINRA.

A) is exempt from registration in State B. deals with five or fewer retail residents of that state, the de minimis exemption applies.

An applicant for registration as an investment adviser discloses on its application to the Administrator that it plans to use palm readers to help determine which investments are most suitable for their clients. Under the Uniform Securities Act, the Administrator A) may only justify denial for reasons listed in the Uniform Securities Act. B) will probably turn to the SEC for guidance. C) will request that the applicant furnish past performance records to determine whether this method of investment analysis has merit. D) is empowered to deny this application for just cause.

A) may only justify denial for reasons listed in the Uniform Securities Act.

Under the Uniform Securities Act, the registration requirements for agents would never include A) minimum capital. B) an examination. C) a consent to service of process. D) surety bonding.

A) minimum capital. Minimum capital may be required of broker-dealers and investment advisers but not agents.

Clay Tompkins is registered as an agent with Integrity Asset Management (IAM), a FINRA-member broker-dealer. Tompkins is attempting to convince a prospect to transfer his account to IAM but is not having great success. When he returns to his office, he sends an email to the prospect listing the benefits of using IAM with him as the agent. Which of the following statements would be prohibited? A) "Because I passed the qualification exam one month ago, the regulatory bodies were able to grant effectiveness to my registration." B) "Because I passed the qualification exam one month ago, you can be sure that I am up to date on the stock market." C) "As a new agent, I have a small book of business and try to devote more of my time to my clients than might be the case with established agents." D) "Integrity Asset Management is registered with the SEC, a member of FINRA, and registered in more than a dozen states."

B) "Because I passed the qualification exam one month ago, you can be sure that I am up to date on the stock market."

With regard to an investment adviser's brochure, disclosure must be made to all current clients and to prospective clients regarding material disciplinary action. Which of the following would not have to be disclosed? A) State or regulatory proceedings in which the adviser or a management person was found to have violated rules or statutes that led to the denial, suspension, or revocation of the firm's or the individual management person's registration B) A court of competent jurisdiction levied a civil fine of $100,000 against the firm resulting from a lawsuit filed by a newsletter publisher claiming the adviser used the publisher's intellectual property without permission C) Self-regulatory organization proceedings in which the adviser or management person caused the business to lose its registration; the firm or individual was barred, suspended, or expelled; or a fine in excess of $2,500 or a limitation was placed on the adviser or management person's activities D) Court proceedings, such as a permanent or temporary injunction, against the firm or management person pertaining to an investment-related activity or any felony

B) A court of competent jurisdiction levied a civil fine of $100,000 against the firm resulting from a lawsuit filed by a newsletter publisher claiming the adviser used the publisher's intellectual property without permission

Under the terms of the Uniform Securities Act, which of the following is an investment adviser for purposes of state regulatory jurisdiction? A) An accountant located in the state who offers general securities advice as an incidental part of his business B) An investment subsidiary of a bank holding company located in the state that manages $70 million in assets C) A federal covered adviser with clients in the state D) A commercial bank with a place of business in the state that advises clients on investment matters

B) An investment subsidiary of a bank holding company located in the state that manages $70 million in assets

When does a customer have to receive the options disclosure document? A) With the confirmation of the first options transaction B) Before the first order C) Within 15 days of account approval by the firm's designated options supervisor D) Within 5 business days of the first options trade

B) Before the first order

An agent is registered in Illinois and Ohio. One of her substantial clients has just moved from Ohio to Arizona, and the agent would like to continue to do business with her. Under the Uniform Securities Act, which of the following statements are true? I. The agent's broker-dealer must already be registered in Arizona or complete the Arizona registration process within a time period specified by the act. II. The agent must complete the Arizona registration process within a time period specified by the act. III. The agent must ask the Ohio Administrator to request reciprocal registration from the Arizona Administrator. IV. The agent must suggest that the client maintain a mailing address, such as a post office box, in Ohio. A) II and III B) I and II C) I and IV D) III and IV

B) I and II

Which of the following are not included in the definition of an agent in the Uniform Securities Act? I. A licensed broker-dealer II. An officer of an issuer who only represents the issuer in selling shares to a broker-dealer underwriting the company's securities III. An officer who represents an issuer of non-exempt securities in the sale of those securities to the public without receiving any compensation IV. An employee of a broker-dealer whose only transactions are with institutional clients A) I and III B) I and II C) III and IV D) II and IV

B) I and II An officer—or any other employee—of a company who represents her company in transactions with an underwriter is not included in the term agent because the transaction is exempt.

An agent has been recommending that customers buy common stock in XYZ Company. If on a visit to XYZ he overhears unreleased news that XYZ has just lost its biggest account, the agent should I. discuss the situation with his supervisory principal. II. continue to recommend the security to customers and prospects. III. stop recommending the security to customers and prospects. IV. sell the stock short in his brother's account. A) III only B) I and III C) I, III, and IV D) I only

B) I and III

An agent's recommendation for the purchase of a municipal security to a customer who wants fixed income and is in a relatively low tax bracket would in most cases be I. unsuitable and unethical. II. a securities felony. III. grounds, in extreme cases, for suspension or revocation of the agent's license. IV. outside regulatory jurisdiction. A) IV only B) I and III C) II and III D) I only

B) I and III

NASAA has created a Model Rule dealing with the creation of and delivery requirements for an investment adviser brochure. Which of the following statements correctly identify those delivery requirements? I. The brochure must be delivered to prospective and new advisory clients at least 48 hours prior to entering into the advisory contract. II. The brochure must be delivered to prospective and new advisory clients no later than entering into the advisory contract. III. Annual delivery of the brochure to existing clients must be made within 90 days of the end of the adviser's fiscal year. IV. Annual delivery of the brochure to existing clients must be made within 120 days of the end of the adviser's fiscal year. A) I and III B) II and IV C) II and III D) I and IV

B) II and IV The brochure must be delivered to prospective and new advisory clients no later than entering into the advisory contract. Annual delivery of the brochure to existing clients must be made within 120 days of the end of the adviser's fiscal year.

Securities issued by which of the following are exempt from registration? I. Any savings and loan association organized under the laws of any state II. Any bank organized and supervised under the laws of any state III. Any bank organized under the laws of the United States IV. Any federal credit union A) I, II, and IV B) II, III, and IV C) I, III, and IV D) I and II

B) II, III, and IV The securities issued by national banks, state-chartered banks, and federal credit unions are exempt from registration under the USA. Federal savings and loan associations are as well. But those savings and loan associations organized under state laws are only exempt if the S&L is authorized to do business in this state.

Which of the following is an example of a nonissuer transaction? A) Preemptive rights offering B) Secondary offering by an institutional seller C) Primary issue of corporate stock D) Private placement by an issuer

B) Secondary offering by an institutional seller

Pelf Securities and Investments, Inc., (PSII) has been in business as a registered broker-dealer in State Z since 1932. During that time, control of the company was in the hands of the descendants of the founder. With no one in the current generation interested in continuing the firm's legacy, the board of directors votes to withdraw PSII's registration. Which of the following statements is true? A) The Administrator may bring an action against PSII for a period of 2 years after the effective date of the withdrawal. B) The withdrawal from registration will normally take place on the 30th day after filing. C) Once the application for withdrawal is filed, any pending actions against the firm are canceled. D) The withdrawal from registration will normally take place on the 60th day after filing.

B) The withdrawal from registration will normally take place on the 30th day after filing.

Under the Uniform Securities Act, all of the following are exempt transactions except A) unsolicited customer orders. B) a sale of a primary offering registered with the SEC. C) a transaction executed by a trustee in bankruptcy. D) isolated nonissuer transactions

B) a sale of a primary offering registered with the SEC. In almost every instance, an issuer transaction—that is, one for the benefit of the issuer—will not be considered an exempt transaction. Exempt transactions include isolated nonissuer transactions; transactions between an issuer and an underwriter; transactions by an executor, administrator, sheriff, marshal, trustee in bankruptcy, guardian, or conservator; any sale or offer to a bank, savings institution, investment company, or other financial institution; and private placements.

There is an exclusion from the Uniform Securities Act's definition of agent for those individuals representing certain issuers in the sale of their securities. That exclusion would apply to individuals representing A) a savings and loan association organized under the laws of any state and authorized to do business in this state. B) a savings institution organized and supervised under the laws of any state. C) an insurance company organized under the laws of any state and authorized to do business in this state. D) a credit union organized and supervised under the laws of this state.

B) a savings institution organized and supervised under the laws of any state. The securities issued by all of these entities are exempt from registration under the provisions of the Uniform Securities Act. However, the only one included in the list of those where individuals representing the issuer are not agents is the savings institution. Please check your LEM for the complete list.

Rule 501 of the federal Securities Act of 1933 defines certain investors who are capable of making investments involving higher risk than normal. The term used to describe them is A) institutional investors. B) accredited investors. C) sophisticated investors. D) qualified purchasers.

B) accredited investors. The question is referring specifically to Rule 501. That is where the definition of accredited investor is found. Accredited investors are those persons who, by dint of wealth, income, or investment sophistication, are able to invest in ventures that are generally unsuitable for the average person. Most commonly, those ventures are private placements. Although qualified purchasers meet the requirements, that is under a different federal law. Institutional investors are accredited, but, once again, that is not the term defined in Rule 501. This exam can get that fussy. It is, after all, a test on the laws.

Peter Smith, a prominent securities lawyer living in Connecticut, conducts his securities law practice full time in New York state. He must register as an investment adviser in New York state if A) the clients of his law firm are all residents of Connecticut but conduct their business with him in New York. B) his clients, none of whom are residents of New York, receive investment advice as an integral part of his legal services. C) he advises his spouse, who also has an office in New York, that her investment in 15 technology stocks is too high. D) the clients of his law firm are New York residents and seek advice on the construction of trust documents that may be helpful in reducing taxes on the securities in their estates.

B) his clients, none of whom are residents of New York, receive investment advice as an integral part of his legal services. Smith must register as an investment adviser in New York when or if he is offering investment advice as an integral part of his practice. Because his place of business is in New York, he must register in New York as an IA, even though his clients are not themselves residents of the state. If Smith advises his spouse, who also has an office in New York, that her investment in 15 technology stocks is too high, he need not register in New York because he is not charging his spouse a fee for investment advice. Smith, as a securities lawyer, need not register in New York as an IA when he advises clients on the construction of trust documents.

A broker-dealer with no place of business in a state is not defined as a broker-dealer in that state when its only clients in that state are A) non-profit organizations. B) registered investment companies. C) an individual who meets the definition of accredited investor. D) an employee benefit plan with assets of $800,000.

B) registered investment companies. Employee benefit plans are as well, but the minimum size is assets of at least $1 million. No individual is an institution

An agent is currently registered with Broker-dealer X and would like to register with Broker-dealer Z. Under the Uniform Securities Act, A) the agent would have to sell different types of securities for each broker-dealer. B) registration would be required with each broker-dealer. C) permission would have to be granted by FINRA. D) an agent can never be registered with more than one broker-dealer at the same time.

B) registration would be required with each broker-dealer.

LinkedIn is a popular social media tool for business people. The nature of the information posted poses risks for investment advisers because of the specific requirements for testimonials. A step that advisers should consider taking to minimize the risk of an improper endorsement appearing on their page is to A) only allow unsolicited recommendations from clients to be shown on the page. B) select "No" for the "I want to be endorsed" feature under the "Skills and Expertise" section on their LinkedIn profile. C) only allow clients to endorse an adviser for a skill that is already listed on his profile. D) only allow clients to endorse an adviser for a new skill that does not already appear on the adviser's profile.

B) select "No" for the "I want to be endorsed" feature under the "Skills and Expertise" section on their LinkedIn profile. If you do a good job, it is only natural that your clients want to say good things about you. Unfortunately, that can lead to a testimonials for IAs and IARs that do not comply with the SEC's Marketing Rule for Investment Advisers. The LinkedIn service allows people to either endorse a listed individual's skills (or add new ones) or post recommendations. Either of these would not be acceptable. The safest thing to do is turn off the ability to endorse skills.The marketing rule does address the topic of screening posts and attempting to eliminate those that are unfavorable, which you shouldn't do.

Magnum Manufacturing Company (MMC) wishes to raise capital through a public offering of its common stock. When filing the required paperwork with the Administrator, MMC is legally referred to as A) the filer. B) the registrant. C) the petitioner. D) the applicant.

B) the registrant. When an issuer files the registration papers with the Administrator, the USA refers to that person as the registrant. Any person wishing to register in any capacity, whether a broker-dealer, investment adviser, agent, or investment adviser representative, is legally referred to as the registrant.

Blue-sky laws pertain to all of the following except A) the registration of securities salespeople in a state. B) the regulation of securities trading in foreign countries. C) the registration of securities within a state. D) the regulation of securities transactions in a state.

B) the regulation of securities trading in foreign countries

Joan, who has a PhD in economics, has been employed as an agent by Gibraltar Securities for the past 15 years. Missing academic life, she resigns from the broker-dealer and accepts a position as an economics professor at a state university. Which party, if any, is required to notify the state securities Administrator of this change? A) Only the securities firm B) Only Joan C) Both Joan and the firm D) No party, because Joan's termination is voluntary and not for cause

C) Both Joan and the firm Both the agent and the broker-dealer are required to notify the Administrator promptly.

Under the Uniform Securities Act, the Administrator may deny or revoke a registration if an agent I. submits an incomplete application. II. willfully violates a provision of the Uniform Securities Act. III. has no prior sales experience. IV. was convicted of a non-securities-related misdemeanor four years ago in another state. That crime, however, is a felony in this state. A) I, II, III, and IV B) II and IV C) I and II D) I and IV

C) I and II Can only count as misdemeanor bc thats what it was in the state it happened in

Under the Uniform Securities Act, an agent registered in one state may transact business in another state in which he is not registered with which of the following? I. An existing client visiting the other state for a 2-week period II. An existing client who moved to the other state 6 months ago III. An existing client who moved to the other state less than 30 days prior IV. An acquaintance from another state who requests that the agent execute transactions on his behalf A) II and IV B) II and III C) I and III D) I and IV

C) I and III

A properly licensed agent in Illinois, Missouri, and Iowa has a client who moves from Illinois to Michigan on July 1, 2020. On September 1 of that year, the agent sells him 100 shares of a nonexempt security in a nonexempt transaction. On October 1, 2021, the client discovers that the agent's firm never licensed him in Michigan and that the agent is subject to civil liability to the purchaser. The statute of limitations for this sale runs out on A) October 1, 2023. B) September 1, 2021. C) September 1, 2023. D) October 1, 2024.

C) September 1, 2023. The statute of limitations for civil liability is the earlier of three years after the date of the sale or two years after discovery of the violation. In this case, the earliest date is three years after the sale on September 1, 2020, which is September 1, 2023.

To transact business in a state as an investment adviser representative, a person must A) have passed the Series 63 agent exam and the appropriate NASAA exam for IARs. B) be registered as a representative of an investment adviser and have passed the appropriate FINRA exam for IARs. C) be registered as a representative of an investment adviser and have passed the appropriate NASAA exam for IARs. D) be an associated person of an investment adviser who maintains a place of business in the state.

C) be registered as a representative of an investment adviser and have passed the appropriate NASAA exam for IARs.

Sally is registered as an agent with Regnant Securities Co. (RSC), a major brokerage house with offices in most states. RSC recently introduced a fee-based asset management program and asked Sally to devote one hour per day soliciting her existing clients for this program. Under the Uniform Securities Act, Sally would A) not be required to obtain any additional licensing beyond her agent registration because this occupies less than 15% of her working hours. B) only be permitted to solicit those clients who currently have discretionary accounts with RSC. C) be required to obtain registration as a registered investment adviser representative. D) be required to obtain registration as a registered investment adviser.

C) be required to obtain registration as a registered investment adviser representative.

Defalcator Dependable Brokers (DDB) has changed its business structure from a general partnership to a corporation. Notification of this change A) need not be made because it has no relevance to the way the firm does its securities business. B) must be submitted to the Administrator by noon of the 30th day after the change. C) must be submitted to the Administrator promptly. D) is made by amending its Form BD when the annual renewal fee is paid.

C) must be submitted to the Administrator promptly. If any material information in the documents relating to the application for registration becomes inaccurate or incomplete, the registrant must promptly file a corrected copy (amend their application) with the Administrator. Because the type of business structure—partnership, corporation, LLC, or sole proprietorship—is disclosed on Form BD, a change requires a prompt update. The USA never defines prompt and the exam never specifies a time—just answer promptly to a question like this.

Royal Securities is a broker-dealer registered in Province A. Some of Royal's retail customers have made a permanent move to State M. If Royal wishes to maintain the customer relationship, it A) need not register in State M if there is no place of business there and the customers are visiting the state. B) may continue the relationship as it would with any Canadian citizen as long as it keeps its registration active in Province A. C) must register under the limited registration program available to Canadian broker-dealers. D) must register as any U.S.-based broker-dealer would when there are retail investors in the state.

C) must register under the limited registration program available to Canadian broker-dealers. The rules for Canadian broker-dealers are spelled out in the Uniform Securities Act. If the Canadian client is in the U.S. on a temporary basis, the BD must use the limited registration process. If the Canadian client makes a permanent change of residence to the U.S., once again, the limited registration process must be followed. Although it does not affect the answer, as a point of information, because these customers have made a permanent move,, the Canadian BD's relationship with the customer is limited to activity in the customer's RRSP (retirement plan similar to our IRA). When the move is temporary, such as a visit to the southern U.S. for the winter, as long as the BD has the limited registration, the BD can conduct business as normal (any kind of account).

The federal act that essentially eliminated the dual system of state and federal registration of certain securities is A) the Securities and Exchange Act of 1934. B) the Uniform Securities Act of 1956. C) the National Securities Markets Improvement Act of 1996. D) the Dual Registration Elimination Act of 2001.

C) the National Securities Markets Improvement Act of 1996. The USA is not federal law and the Securities and Exchange Act established regulation of exchanges.

All of the following statements regarding the disclosure investment adviser brochure rule of the Uniform Securities Act are true except A) the brochure rule permits advisers to deliver the disclosure brochure when the client enters the contract, provided the client is allowed to cancel the contract without penalty within five business days. B) the disclosure brochure must contain essentially the same information as is contained in Form ADV Part 2A and, if applicable, Part 2B. C) the disclosure brochure must be signed by an officer or partner of the firm. D) the disclosure brochure must be delivered no later than 48 hours before entering into an advisory contract for there to be no requirement to offer a five-day refund right.

C) the disclosure brochure must be signed by an officer or partner of the firm.

According to the NASAA investor advisory regarding fees charged by broker-dealer firms for services and maintenance of investment accounts, A) as long as the schedule is available in electronic form, it is not necessary to provide a paper version to retail customers. B) fee schedules should only be delivered by hand or postal mail to reduce cyber security threats. C) the schedule should be made available on the broker-dealer's public website without requiring any login or password. D) the schedule should be made available on the broker-dealer's public website and should be password protected.

C) the schedule should be made available on the broker-dealer's public website without requiring any login or password.

A customer of a broker-dealer has been trading securities for several years. She recently purchased $10,000 of newly issued U.S. Treasury bonds and asks why she never received a prospectus. The agent would reply, A) "I will get one for you as soon as possible." B) "U.S. Treasury securities are excluded from the definition of a security." C) "U.S. Treasury securities are excluded from the registration requirements of the federal and state regulators, so there is no prospectus." D) "U.S. Treasury securities are exempt from registration on the federal and state level, so there is no prospectus."

D) "U.S. Treasury securities are exempt from registration on the federal and state level, so there is no prospectus."

Which of the following would be least likely to meet the cyber security definition of a covered account? A) A customer with an automobile loan at a bank B) A customer with a margin account at a broker-dealer C) An account with a registered investment company that permits the owner to wire funds to a third party D) A business account held by a company listed on the NYSE

D) A business account held by a company listed on the NYSE In general, business accounts are not included in the term covered account. There could be an exception for a sole proprietorship or other small business where there is a reasonably foreseeable risk to customers due to the inability of the customer to provide adequate internal safeguards. That is unlikely to be the case with a listed company.

As defined in the Uniform Securities Act, which of the following items is not a security? A) An American depositary receipt (ADR) B) An interest in a cattle feeding program organized as a limited partnership C) A voting trust certificate D) A whole life insurance contract issued by an incorporated life insurance company having its shares trade on the New York Stock Exchange (NYSE)

D) A whole life insurance contract issued by an incorporated life insurance company having its shares trade on the New York Stock Exchange (NYSE)

A customer living in one state receives a phone call from an agent in another state. A transaction between the two occurs in a third state. According to the Uniform Securities Act, under whose jurisdiction does the transaction fall? A) Administrator of the state in which the customer lives B) Administrator of the state in which the agent is registered C) Administrator of the state in which the transaction took place D) Administrators of all three states involved

D) Administrators of all three states involved

As defined in the Uniform Securities Act, which of the following is not a security? A) Common stock of ABC National Bank, which is a member of the Federal Reserve System B) A commodity options contract C) Interest in a merchandising marketing program D) An annuity that provides for a fixed monthly income

D) An annuity that provides for a fixed monthly income

A state-registered investment adviser offers wrap fee programs to certain clients. Which of the following statements about wrap fee arrangements is not true? A) Nonmaterial changes to wrap fee programs must be disclosed to the Administrator within 90 days of fiscal year-end. B) Information on Appendix 1 of Form ADV Part 2A must also be contained in client disclosure documents. C) Material changes to wrap fee programs must be filed promptly with the Administrator. D) Because this investment adviser offers wrap fee programs, it must make certain annual disclosures to the SEC.

D) Because this investment adviser offers wrap fee programs, it must make certain annual disclosures to the SEC. As a state-registered investment adviser (IA), all filings are with the Administrator, not the SEC. In the case of wrap fees, the form used is Appendix 1 of Form ADV Part 2A. Every IA, state-registered or federal covered, must update the information on file within 90 days of the end of the adviser's fiscal year. One of the most important parts of this is the annual updating amendment regarding eligibility to register with the SEC or remain state-registered. Even nonmaterial information is included. However, an amended Form ADV needs to be filed promptly with the Administrator only if there are material changes.

Under the Uniform Securities Act, an offer and sale does not exist if it is I. the result of a class vote by stockholders regarding a merger or consolidation. II. a bona fide pledge or loan. III. an act incident to a judicially approved reorganization in which a security is issued in exchange for one or more outstanding shares. IV. a gift of nonassessable securities. A) I, II, and III B) II and IV C) I and II D) I, II, III, and IV

D) I, II, III, and IV This exceptionally legal question describes four of the Uniform Securities Act's specific exclusions from the definition of offer and/or sale. Another exclusion would be a stock dividend distributed to current shareholders at no cost to them. Remember, a purported gift of assessable stock is considered to involve an offer and sale. It is a gift of nonassessable stock that is neither an offer nor a sale.

Which of the following statements relating to notice filing are correct? I. It is available only to federal covered securities. II. A notice filing is effective for one year, beginning from the later of filing with the Administrator or the effective date determined by the SEC. III. Renewal is accomplished by filing with the state a copy of records filed with the SEC, along with a signed consent to service of process. IV. Failure to pay required fees could lead to the issuance of a stop order. A) II, III, and IV B) I, II, III, and IV C) I and III D) I, II, and IV

D) I, II, and IV

Under the Howey test, a Supreme Court case that established the standards for defining an investment contract, which of the following is a characteristic of a security? I. Entails an investment of money II. Carries expectation of profits III. Carries expectation, but no guarantee, of quarterly distribution of dividends or interest IV. Entails investor reliance on the efforts of others A) II, III, and IV B) I and II C) I, II, and III D) I, II, and IV

D) I, II, and IV The Supreme Court in the Howey case established standards for identifying a security. The four criteria associated with the Howey test are (1) an investment of money (2) in a common enterprise with (3) expectation of profits (4) solely from the efforts of others. The Howey test contains no standard referring to income distributions, guaranteed or otherwise.

Long-Range Investment Planning, LRIP, is a broker-dealer registered in States A and B. The firm is now applying for registration as a broker-dealer in State C. Which of the following registered agents would not be automatically registered as an agent in State C when LRIP's registration as a broker-dealer becomes effective? A) Jake, a member of LRIP's board of directors B) Mildred, the chief operating officer (CFO) C) Mary, the chief compliance officer (CCO) D) John, a salesman with a large retail client base, who is registered in States A and B

D) John, a salesman with a large retail client base, who is registered in States A and B

Which of the following is included in the definition of a broker-dealer under the Uniform Securities Act? A) Agent B) Out-of-state broker-dealer with no office in this state that services only other broker-dealers located in this state C) Issuer of securities D) One who effects securities transactions for his own account or on behalf of others

D) One who effects securities transactions for his own account or on behalf of others

Under the Uniform Securities Act, which of the following types of transactions can be entered into legally with unregistered nonexempt securities? A) Solicited transactions with individual clients located within the state B) Public offering of stock in a new corporation C) Rights offering to existing shareholders with underwriting compensation of $0.05 per share to the soliciting broker-dealers D) Private placement offered to more than 50 institutional purchasers in the state

D) Private placement offered to more than 50 institutional purchasers in the state Private placements involve the sale of nonexempt securities to investors without the need for registration. There is no numerical limit to the number of offers that may be made to institutional buyers.

The First Home Savings and Loan Association of State C has a securities offering being made in the state. Deborah is an employee of the S&L and is selling this security to residents of State C. Deborah A) can sell these securities only to individuals who are accredited investors without being registered as an agent. B) is not required to register as an agent because she is representing the S&L, an issuer of exempt securities. C) is not required to register as an agent because the S&L is domiciled in State C. D) cannot sell these securities without being registered as an agent of the S&L.

D) cannot sell these securities without being registered as an agent of the S&L.

A consent to service of process allows the Administrator to A) ensure that the legal appeal process is expedited as a result of the Administrator's access to information. B) terminate a registrant's application. C) verify the accuracy and completeness of registration without obtaining the registrant's prior approval. D) exercise the power of attorney on behalf of the registrant.

D) exercise the power of attorney on behalf of the registrant. The consent to service of process provides the Administrator with power of attorney for registrants. This power of attorney does not grant the Administrator the authority to terminate the registration at will, nor does it empower the Administrator to verify information or expedite the registration process.

If Perfect Pasta, Inc., a privately held company in State I that owns four restaurants wants to issue shares to public investors who are residents of State I, the company A) is exempt from registration because there are fewer than 10 restaurants in the state. B) must register by coordination. C) may issue shares under the notice filing procedure available for federal covered securities. D) must register by qualification.

D) must register by qualification.

When an investment adviser representative terminates employment with a federal covered investment adviser and then registers with a different federal covered investment adviser in the state where the individual has an office, A) the investment adviser representative and the employing adviser must notify the Administrator promptly. B) only the terminating investment adviser must notify the Administrator. C) the investment adviser representative and the federal covered advisers must notify the Administrator promptly. D) only the investment adviser representative must notify the Administrator promptly.

D) only the investment adviser representative must notify the Administrator promptly. If you are working for a registered investment adviser within a specific state, that state securities Administrator wants to know who you are. The problem becomes a question of who is responsible for notifying the state securities Administrator of your employment. A federal registered IA is exempt from registration at the state level and therefore has very little contact with the state. If you go to work for a federal registered IA, it becomes your duty to notify the state securities Administrator that you are working there, as well as when you terminate.

The Administrator may, by rule, A) require an agent to waive provisions of the Uniform Securities Act when it is in the best interest of the customer. B) suspend the registration of a federal covered adviser because the firm does not require that its advisory contracts be in writing. C) suspend federal law if the Administrator believes it to be in the public interest. D) require investment advisers registered in that state to provide notice of plans to take custody of client funds.

D) require investment advisers registered in that state to provide notice of plans to take custody of client funds. The Administrator has considerable discretion to make rules or issue orders. Specifically, the USA allows the Administrator to require IAs registered in her state to provide notification of intent to maintain custody. However, the USA does not allow the Administrator to waive provisions of the USA, nor can the Administrator suspend federal law. Although the advisory contracts of state-registered IAs must be in writing, the NSMIA took away the power of the states to regulate federal covered advisers except in the case of a violation of the antifraud statutes.

All of the following securities are exempt from state registration except A) securities issued by a registered investment company. B) bonds issued by the Republic of Argentina. C) municipal bonds. D) unsolicited orders.

D) unsolicited orders. Be careful. Unsolicited orders are exempt transactions; the others are exempt securities. Furthermore, the choice unsolicited orders is the only one that is not a security, exempt or not ???? another one said it had to be issued by U.S. or Canada to be exempt???

An investment adviser with no place of business in the state is exempt from registration with the state when making recommendations to all of the following except A) Amalgamated Bank. B) St. Amelia's college endowment fund. C) AAA Manufacturing Co., with respect to the quality of investment bankers available for an underwriting of AAA securities. D) when the recommendations are made exclusively to individual residents of the state who are accredited investors regarding new issues of exempt securities not registered in that state.

D) when the recommendations are made exclusively to individual residents of the state who are accredited investors regarding new issues of exempt securities not registered in that state.

The Administrator of a state securities department conducted a hearing regarding misconduct by an investment adviser registered at the state level. The Administrator required the adviser, as well as several clients who had lodged complaints against the adviser, to take a sworn oath that their testimony was true. Does the Administrator have the power to require sworn oaths? A) Yes, the Administrator has the power to require witness oaths because an Administrative hearing is functionally a legal proceeding. B) Yes, the Administrator may require witness oaths because the Administrator is appointed as a judge. C) Yes, the Administrator is empowered to administer oaths as provided in the Uniform Securities Act, as enacted in the Administrator's state of jurisdiction. D) No, the Administrator was merely attempting to emphasize the seriousness of the hearing, but he holds no such power.

Yes, the Administrator is empowered to administer oaths as provided in the Uniform Securities Act, as enacted in the Administrator's state of jurisdiction.

Which of the following is the least suitable recommendation for an elderly widow who needs current income? A) U.S. Treasury bonds B) Zero-coupon bonds C) High-quality municipal bonds D) High-quality preferred stock

Zero-coupon bonds Zero-coupon bonds provide no income

Western Securities, Inc. (WSI) is a broker-dealer that also offers portfolio management. One of WSI's portfolio managers notices an article on asset allocation that harmonizes with WSI's investment philosophy. If WSI should post a link to this article on its website, it would probably be considered A) estrangement. B) entanglement. C) fulfillment. D) adoption.

adoption. A firm will be responsible for the content of a linked third-party site if the firm adopts its content on any of the firm's sites. Adoption is defined as a firm's endorsement of the content of a third-party site. In this question, by posting a link, WSI is endorsing the content. This is not illegal, but the firm is responsible for the content of the linked information and must be sure that it complies with the firm's policies. Entanglement is adoption taken one step further. This is when the firm (or one of its representatives) contributes to the third-party information and then posts it.

Under the Uniform Securities Act, an investment adviser's current clients must be delivered a brochure A) annually, whether or not the adviser has custody or discretion. B) within 48 hours of renewal. C) quarterly if the adviser has both discretion and custody. D) annually​, but only​ if the adviser has neither custody nor discretion

annually, whether or not the adviser has custody or discretion.

Burgeoning Capital Associates (BCA) is a broker-dealer specializing in assisting corporations and municipalities with raising funds through the issuance of equity or debt securities. BCA has places of business in States A, B, and C. Great Organic Products (GOP), a corporation domiciled in State D, wishes to borrow $25 million to purchase new equipment. GOP approaches BCA, who suggests a 20-year debenture. GOP agrees and BCA purchases the entire issue with a view to reselling the securities to its retail customers. Based on the Uniform Securities Act, BCA A) must employ agents registered in State D in order to be able to make the purchase. B) is not a broker-dealer in State D. C) is a broker-dealer in State D. D) is a broker-dealer in State D unless sales are confined to residents of State D.

is not a broker-dealer in State D. One of the exclusions from the definition of a broker-dealer in the state is when the BD has no place of business in the state and its only clients in the state are issuers of the securities the BD is buying. When BCA resells the GOP debentures, it will be selling them to its customers in States A, B, and C, where the BD is registered.

Under the Uniform Securities Act, all of the following statements regarding private placements are true except A) offers can be made to no more than 10 noninstitutional clients during any 12-month period. B) no payment is received from noninstitutional clients. C) offers can be made to an unlimited number of institutional buyers. D) commissions cannot be paid for soliciting noninstitutional buyers.

no payment is received from noninstitutional clients.

A president of a bank sells shares of the bank to public investors. Under the Uniform Securities Act, she is A) not defined as an agent. B) an investment adviser. C) underwriting the issue in the role of a broker-dealer. D) an agent.

not defined as an agent. Any individual selling securities on behalf of an issuer of certain exempt securities (bank securities are in that list) is not an agent under the USA.

An individual employed by a federal covered adviser would be required to become registered as an IAR in the state if A) the only clients receiving the individual's advice are large pension plans organized for employees of municipalities located in the state where that individual maintains an office. B) the only function performed by the individual is preparing the layout of a research report prepared by the firm. C) the only clients receiving the individual's advice are insurance companies located in states where the individual does not maintain a place of business. D) the only clients receiving the individual's advice are banks located in states where the individual does not maintain a place of business.

the only clients receiving the individual's advice are large pension plans organized for employees of municipalities located in the state where that individual maintains an office. they got an office

One way that a financial institution participates in the fight against money laundering is through the filing of A) FinCEN Form 104 for large deposits. B) FinCEN Form 112 for large cash transactions. C) IRS Form 1040ML when money laundering is suspected. D) FBI Form FD-772.

B) FinCEN Form 112 for large cash transactions. The form filed with the Financial Crimes Enforcement Network (FinCEN) is Form 112. It replaced Form 104 years ago, and there is no IRS Form 1040ML. FBI Form FD-772 is a foreign-travel request form for FBI agents.

An Administrator may initiate a suspension or revocation proceeding against a broker-dealer registered in his state A) up to two years after the broker-dealer voluntarily withdrew its registration. B) upon discovery that the broker-dealer's registration had been suspended in another state. C) upon discovery that an agent of the broker-dealer was convicted of a felony violation involving securities fraud. D) based upon facts known to the Administrator at the time of the broker-dealer's initial registration.

B) upon discovery that the broker-dealer's registration had been suspended in another state.

Under the Uniform Securities Act, which of the following statements regarding investigations conducted by the Administrator are true? Information regarding violations must be kept confidential. Investigations may be conducted across state lines. The Administrator may obtain a court order to have a receiver appointed over a violator's assets. A) I, II, and III B) I and III C) II and III D) I and II

C) II and III

An individual eligible under federal law to purchase securities sold in a private placement is called A) a sophisticated investor. B) an institutional investor. C) a wealthy investor. D) an accredited investor.

an accredited investor.

Discretionary orders

leave the decision as to what security, how much, and buy or sell up to the designated agent.

When a sale violates provisions of the Uniform Securities Act, all of the following statements regarding civil liabilities are true except A) the rescission offer must be at the current market price. B) the rescission offer must include interest. C) the decision to accept or reject the offer must be made within 30 days. D) a buyer may not sue for compensation more than 3 years after the sale.

the rescission offer must be at the current market price.