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Series 66 > 66-8 > Flashcards

66-8 Flashcards

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Series 66 flashcards
1
Q

What are the justifiable reasons for denying an individual’s registration?

A

Conviction for any felony or securities-related misdemeanor within the last 10 years

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2
Q

An agent whose registration has been revoked must be granted a hearing, if requested, within _____ days of the request.

A

15 days

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3
Q

If an agent has withdrawn registration, the Administrator may still take action for ___ year(s) after the withdrawal.

A

1 year

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4
Q

A prospectus mailed by an agent in one state to a client in another state is considered an offer in which state(s)?

A

both states

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5
Q

True or False: A gift of assessable stock is considered both an offer and sale.

A

True

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6
Q

True or False: A gift of non-assessable stock is considered both an offer and sale.

A

False

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7
Q

Is the payment of a stock dividend considered an offer or sale?

A

no

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8
Q

Is the conversion of a bond into stock considered an offer or sale?

A

no

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9
Q

If shares of stock are freely given with the purchase of a bond, is this considered an offer and sale?

A

yes

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10
Q

True or False: An Administrator may issue a cease-and-desist order before a violation has occurred.

A

true

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11
Q

True or False: An Administrator may issue an injunction.

A

False, only issued by a court

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12
Q

Under the Uniform Securities Act, the statute of limitations for fraud is ____ years.

A

5 years

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13
Q

The statute of limitations for criminal violations of the Uniform Securities Act is ____ years.

A

5 years

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14
Q

Statue of limitations for USA civil violations is ____ yrs. of occurrence or ____ yrs. of discovery, whichever is first.

A

3 yrs. of occurrence or 2 yrs. of discovery

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15
Q

Maximum criminal penalties under the USA are a $________ fine and/or ____ years in prison.

A

$5,000 fine and/or 3 years in prison

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16
Q

May an Administrator enter other states to investigate potential violations that occurred in his own state?

A

yes

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17
Q

True or False: The Uniform Securities Act is exactly the same law in every state.

A

False. The USA is a model law, not the actual law of any state.

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18
Q

_______________________________________________________ is an organization consisting of state Administrators.

A

The North American Securities Administrators Association (NASAA)

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19
Q

Administrative cease-and-desist orders may be appealed in a state court if application is made within _____ days.

A

60 days

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20
Q

The ________________ is responsible for administering and enforcing the securities laws of a state.

A

Administrator

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21
Q

An ________ is any attempt or solicitation to acquire or dispose of a security for value.

A

offer

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22
Q

A _______ is any agreement or contract to dispose of a security for value.

A

sale

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23
Q

True or False: Registration may be denied due to ANY misdemeanor convictions.

A

False. Registration may be denied for ANY felony conviction or securities-related misdemeanor conviction.

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24
Q

How may the failure to pay the proper filing fee be corrected?

A

By paying the appropriate amount

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25
Q

May the Administrator set minimum net capital requirements for BDs?

A

Yes, but the requirement on BDs may not exceed the federal (SEC) requirement.

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26
Q

Is there a limit to the amount of net capital the Administrator may require of a BD?

A

Yes. The Administrator may not set a requirement that exceeds the federal (SEC) requirement.

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27
Q

May the Administrator set minimum net worth requirements for IAs?

A

Yes, but no state may impose a requirement that exceeds the requirement of the IA’s home state.

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28
Q

May federal covered adviser’s books and records be subject to inspection by an Administrator?

A

yes

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29
Q

True or False: An administrator may cancel a registration without the opportunity for a hearing.

A

True. Cancellation may be due to the death of an agent, or a firm no longer being in business.

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30
Q

If a cease-and-desist order is issued against an agent, the agent must file an appeal within _____ days.

A

60

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31
Q

If an appeal has been filed by an agent, does the appeal lift (suspend) the order?

A

no

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32
Q

True or False: A client who receives a letter of rescission after selling the security may still initiate civil action.

A

True

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33
Q

If an offer is made using television or radio, where is the offer considered to have been made?

A

In the state in which the broadcast or telecast originated

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34
Q

If an offer is made using the mail, where is the offer considered to have been made?

A

In the state from which it originated and the state to which it is directed

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35
Q

True or False: Offers made in a newspaper are deemed to have been made in any state in which the paper is circulated.

A

False. With newspapers, the offer is only considered to be made in the state in which it is published.

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36
Q

With newspaper offers, no offer is made if more than __________ of the circulation is outside of the publishing state.

A

two-thirds

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37
Q

True or False: A gift of assessable stock would not be considered a sale.

A

False

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38
Q

True or False: The tendering of a convertible bond is considered a sale according to the USA.

A

False

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39
Q

Is being charged with a felony or securities-related misdemeanor grounds for statutory disqualification?

A

No. Statutory disqualification includes conviction for any felony or securities-related misdemeanor in the past 10 yrs.

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40
Q

When may the Administrator cancel a registrant’s registration?

A

If the registrant has died, ceased doing business, been declared mentally incompetent or cannot be located

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41
Q

True or False: A stock dividend is considered a sale

A

False

42
Q

True or False: The exercise of convertible securities would constitute a sale under the USA.

A

False

43
Q

True or False: A warrant attached to the sale of a bond would constitute a sale of the warrant.

A

True

44
Q

May the Administrator levy fines on a registrant?

A

No

45
Q

May the Administrator initiate criminal or civil liability action against a registrant?

A

yes

46
Q

When will an offer fall under an Administrator’s jurisdiction?

A

If the offer originated in, was directed in, or was accepted in the Administrator’s state

47
Q

If the Administrator believes a person has violated or is about to violate the USA, may a stop order be issued?

A

yes

48
Q

Does the Administrator require proof of wrongdoing to initiate an investigation?

A

No, but she does need to be able to refer to a rule or order when starting the investigation.

49
Q

When conducting an investigation of wrongdoing, is the Administrator limited to state boundaries?

A

No. The Administrator may subpoena books, records, and witnesses from inside and outside the state.

50
Q

If found civilly liable for violating the USA, what is the penalty?

A

The original amount paid, plus the legal rate of interest, attorney fees, and court costs, minus any cash received

51
Q

Who is the official that monitors and administers a state’s securities laws?

A

The Administrator or Commissioner

52
Q

May the Administrator set net capital requirements for BDs?

A

Yes

53
Q

Is there a limit to the amount of net worth the Administrator may require of an IA?

A

Yes. The Administrator may not set a requirement that exceeds the IA’s home state.

54
Q

If the Administrator enjoins an agent’s registration and a hearing is requested, when must the hearing be held?

A

15 days

55
Q

True or False: A gift of non-assessable stock would constitute a sale.

A

False

56
Q

For how long does the Administrator maintain jurisdiction over a registrant after a withdrawal of registration?

A

1 year

57
Q

If the Administrator believes a person has violated or is about to violate the USA, may an injunction be issued?

A

No. The Administrator may not issue an injunction. Injunctions may only be issued by a court of competent jurisdiction.

58
Q

A person may appeal a stop order issued by the Administrator within _____ days.

A

60

59
Q

The appeal of an administrative order is made before a court of _________________________.

A

a court of competent jurisdiction (state court).

60
Q

Does the appeal of an administrative order act as a stay of the order?

A

No

61
Q

The maximum criminal penalty for violations of the USA is ____ years in prison and/or up to a $______ fine.

A

3 years in prison and/or up to a $5,000 fine

62
Q

The statute of limitations for criminal violations of the USA is ____ years.

A

5

63
Q

Statute of limitations for USA civil violations is ___ yrs. of occurrence or ___ yrs. of discovery, whichever is first.

A

3 yrs. of occurrence or 2 yrs. of discovery

64
Q

What is a letter of rescission?

A

An offer to buy back a security from a client when that security was sold in violation of the USA

65
Q

A customer must respond to a letter of rescission within _____ days or lose the right to sue.

A

30

66
Q

What is the maximum penalty for criminal violations of the Investment Company Act of 1940?

A

5 years in prison and/or a $10,000 fine

67
Q

A person subject to an SEC order may appeal the order to the U.S. Court of Appeals within _____ days.

A

60

68
Q

Criminal penalties for violating the IA Act of 1940 may not exceed $_______ and/or imprisonment not exceeding ___ years.

A

$10,000; 5 years

69
Q

Who enforces the Uniform Securities Act?

A

The State Administrator

70
Q

True or False: The Administrator may bring a case in a civil court.

A

True

71
Q

Define jurisdiction.

A

The power to interpret and apply the law or the territorial range of authority or control.

72
Q

An _______ is any attempt or solicitation to dispose of a security for value.

A

offer

73
Q

Define assessable stock.

A

Stock in which the issuer is allowed to demand additional funds from existing stockholders.

74
Q

A hearing will be held ____ days after a written request.

A

15

75
Q

True or False: An individual may be denied registration due to lack of experience.

A

False. However, a lack of training, knowledge, and experience may be grounds for denial.

76
Q

What are some reasons for the Administrator denying a securities’ registration statement?

A

Filing false registration documents, issuer’s business is illegal, spread is unfair, or failing to pay the filing fee.

77
Q

True or False: The Administrator may issue an injunction.

A

False. Only a court may issue an injunction, however, the Administrator may issue a cease and desist order.

78
Q

What may a purchaser recover from civil damages?

A

Full purchase price, plus interest, court costs, and attorney fees, minus any income received from the security

79
Q

Statute of limitations on a civil suit is ___ years from occurrence or ___ years from discovery, whichever comes first.

A

3 years from occurrence or 2 years from discovery

80
Q

The maximum criminal penalties under the USA are a fine of $_______ and ____ years in prison.

A

$5,000; 3 years

81
Q

May the Administrator revoke the registration of a federally covered adviser?

A

No. However, she may require the IA to notice file.

82
Q

An appeal of an SEC order must be filed within _____ days.

A

60

83
Q

What action may an Administrator take on receipt of a complaint regarding an ad that originated from another state?

A

Investigate the complaint

84
Q

True or False: The Administrator may enjoin (issue an injunction) a registered individual or firm.

A

False

85
Q

Administrator has the power to issue a ________________ order, but not an __________.

A

cease and desist order, not an injunction

86
Q

True or False: An Administrator is not required to provide written findings of fact when revoking a registration.

A

False

87
Q

True or False: To revoke registration, Administrators must send registrants all documents created in the investigation.

A

False

88
Q

True or False: An agent may be arrested by the Administrator for refusing to cooperate with an investigation.

A

False. The Administrator does not have the authority to arrest a person who violates state law.

89
Q

True or False: An Administrator may require a mutual fund to file its advertising.

A

False. Mutual fund advertising is filed with FINRA, not the Administrator.

90
Q

True or False: If FINRA issues an order against a firm, an Administrator may take action against a BD’s registration.

A

True

91
Q

True or False: An Administrator may not retroactively enforce orders and revocations.

A

True

92
Q

True or False: Administrators are permitted to issue summary orders denying certain exemptions.

A

True

93
Q

In order to qualify for an exemption, who bears the burden of proof?

A

The person claiming the exemption

94
Q

True or False: Registration denial orders issued by an Administrator are final, binding, and may not be appealed.

A

False

95
Q

May the Administrator audit the books and records of a registered firm?

A

yes

96
Q

If a client has been defrauded by an BD or IA, the firm may be required to ________ commissions/fees.

A

disgorge

97
Q

If an advisory firm ceases operations, how long must it maintain a surety bond?

A

3 years

98
Q

True or False: Ease of ownership transfer is an advantage to stock ownership as opposed to ownership in a partnership.

A

True. Partnership interests are typically illiquid, whereas stock is easy to buy and sell.

99
Q

Administrators may take action within ___ days if a judgment is disclosed prior to a registration’s effective date.

A

90

100
Q

When is an offer subject to state securities laws?

A

When it originates in, is directed to and received in, or is accepted in the state

101
Q

If a client has been defrauded by her BD or IA, what costs may she sue to recover?

A

The cost of the security or the cost of the advice, commissions, legal fees, interest, less any income received

102
Q

At the state level, who may appoint an officer to lead an investigation?

A

The Administrator

Series 66 (12 decks)

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