Chapter 4-6 incorrect

When an Administrator issues a final order, an agent subject to the order may 1 - obtain a review of the order in an appropriate court of law 2 - request that additional evidence be presented to the court 3- request a hearing 90 days after the final order 4- not appeal a court's decision

1 &2 An agent subject to a final order of an Administrator has the right to have the order reviewed by an appropriate court in the state. If the court finds that the circumstances warrant such action, additional evidence may be submitted by any party to the case. An agent subject to an order must file for a judicial review of the Administrator's final order within 60 days.

The statute of limitations for criminal offenses under the USA is

Remember the sequence 5-5-3: 5-year statute of limitations, $5,000 maximum fine, and imprisonment for up to 3 years.

Under the USA, the term "guaranteed" refers

to a guarantee of interest, principal, or dividends by a party other than the issuer

There are 3 primary expenses involved with brokerage accounts that are not included in the fee disclosure template.

1- commissions; 2- markups and markdowns; and 3- advisory fees for those firms that are also registered as investment advisers.

Among the many exempt transactions under the Uniform Securities Act are the private placement and the preorganization certificate or subscription. While these two exemptions have several requirements in common, they have which of the following differences? 1. The private placement exemption places a limit on the number of sales to retail investors, while the preorganization certificate places a limit on the number of offers to all investors.​ 2. Payment for the purchase may be made in the case of a private placement, while no money changes hands in a preorganization subscription. 3. It is expected that noninstitutional buyers of the private placement are purchasing for investment only, while no such requirement exists for the investors in a preorganization certificate. 4. Commissions may be paid on the sale of a private placement to noninstitutional clients, while no remuneration is payable on the sale of a preorganization subscription.

2&3 The term sale means that there has been an exchange of value. No money changes hands in the case of a preorganization certificate or subscription. It is simply a commitment to invest when the corporation's charter has been granted. On the other hand, a private placement is a sale because the seller receives payment, value is exchanged. The state will consider a private placement an exempt transaction if it is anticipated that individual (noninstitutional) investors are purchasing for investment only, not immediate resale. No holding period restrictions are placed on preorganization certificates. Only in the case of a sale of a private placement to an institutional client is it permissible to pay commissions. Finally, Choice I has it backwards. When referring to retail (noninstitutional) investors, there is a limit to the number of offerees (10), while in the preorganization certificate, the number of subscribers is limited to 10 regardless of whether they are retail or institutional.

Ways in which offerings under Rule 506(c) of Regulation D of the Securities Act of 1933 differ from those under Rule 506(b) include each of these except A)all purchasers of the Rule 506(c) securities must be accredited investors as defined in Rule 501, whereas Rule 506(b) permits a limited number of sophisticated but not accredited investors B)securities issued under Rule 506(c) are federal covered, while those under Rule 506(b) are not C)general solicitation is permitted under Rule 506(c) offerings; no advertising is permitted under Rule 506(b) D)the issuer must take "reasonable steps" to verify that all purchasers are accredited investors in a 506(c) offering, while no such obligation falls upon issuers in a 506(b) offering

B. - Under the NSMIA, any security issued under the federal transaction exemption offered under Rule 506, either (b) or (c), is considered a federal covered security. Rule 506(c) permits advertising (general solicitation) but requires that the issuer take reasonable steps to assure all purchasers meet the accredited investor standard. In a Rule 506(b) offering, up to 35 non-accredited investors are permitted with no limit placed on the number of accredited investors. As long as the offering is limited exclusively to accredited investors, Rule 506(c) offerings may be publicly advertised; Rule 506(b) offerings can never be advertised. The limit of 35 nonaccredited investors applies to Rule 506(b); there is no limit on the number of accredited investors for either rule. Both rules are subject to the bad actor provisions.

Under the Uniform Securities Act, the Administrator has the power to deny or revoke exemptions for which of the following types of securities?

Securities of nonprofit organizations. Investment contracts issued by employee benefit plan Any transaction exemption, except one relating to a federal covered security, may be revoked as well. However, there are certain security exemptions that the USA does not grant the Administrator the power to deny. Included in that list is any security issued or guaranteed by any bank organized under the laws of any state.

The oil and gas partnerships are issued

The oil and gas partnerships are issued by separate legal entities; they do not have the blue-sky exemptions. They must be registered in the states in which they are sold, unless they have some other exemption. Any security equal or senior in claim to an exempted common stock is exempted as well. The company's preferred stock, senior bonds, and debentures all have blue-sky exemptions from state registration because the company's common stock is traded on the Nasdaq Stock Market.

If an agent chooses to appeal an Administrator's order, when must the agent file for review of the order with the appropriate court?

Under the USA, a registered person has up to 60 days to appeal any disciplinary finding by the state Administrator.

Perpetual Pecuniary Rewards (PPR) is an investment adviser registered in several states. PPR is affiliated with Perpetual Rewarding Investments (PRI), a broker-dealer registered with the SEC and the same states as PPR. Through that affiliation, clients of PPR can enter into a wrap program with an annual fee between 1% and 1.75%, depending on the account's assets. When opening a new wrap account, PPR must provide the client with a written disclosure statement containing at least the information

required by Appendix 1 of Form ADV, Part 2A. The required disclosure statement for wrap fee programs must contain at least the information in Appendix 1 of Form ADV, Part 2A. It is important to remember that wrap fee clients receive the Appendix 1, not the Form ADV Part 2A that non-wrap advisory clients are given. Even though participation in the wrap program involves the affiliated BD, that has nothing to do with PPR's requirements.