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Series 66 > 66-8 > Flashcards

66-8 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An agent whose registration has been revoked must be granted a hearing, if requested, within _____ days of the request.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If an agent has withdrawn registration, the Administrator may still take action for ___ year(s) after the withdrawal.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
May the Administrator set minimum net capital requirements for BDs?
Yes, but the requirement on BDs may not exceed the federal (SEC) requirement.
26
Is there a limit to the amount of net capital the Administrator may require of a BD?
Yes. The Administrator may not set a requirement that exceeds the federal (SEC) requirement.
27
May the Administrator set minimum net worth requirements for IAs?
Yes, but no state may impose a requirement that exceeds the requirement of the IA's home state.
28
May federal covered adviser's books and records be subject to inspection by an Administrator?
yes
29
True or False: An administrator may cancel a registration without the opportunity for a hearing.
True. Cancellation may be due to the death of an agent, or a firm no longer being in business.
30
If a cease-and-desist order is issued against an agent, the agent must file an appeal within _____ days.
60
31
If an appeal has been filed by an agent, does the appeal lift (suspend) the order?
no
32
True or False: A client who receives a letter of rescission after selling the security may still initiate civil action.
True
33
If an offer is made using television or radio, where is the offer considered to have been made?
In the state in which the broadcast or telecast originated
34
If an offer is made using the mail, where is the offer considered to have been made?
In the state from which it originated and the state to which it is directed
35
True or False: Offers made in a newspaper are deemed to have been made in any state in which the paper is circulated.
False. With newspapers, the offer is only considered to be made in the state in which it is published.
36
With newspaper offers, no offer is made if more than __________ of the circulation is outside of the publishing state.
two-thirds
37
True or False: A gift of assessable stock would not be considered a sale.
False
38
True or False: The tendering of a convertible bond is considered a sale according to the USA.
False
39
Is being charged with a felony or securities-related misdemeanor grounds for statutory disqualification?
No. Statutory disqualification includes conviction for any felony or securities-related misdemeanor in the past 10 yrs.
40
When may the Administrator cancel a registrant's registration?
If the registrant has died, ceased doing business, been declared mentally incompetent or cannot be located
41
True or False: A stock dividend is considered a sale
False
42
True or False: The exercise of convertible securities would constitute a sale under the USA.
False
43
True or False: A warrant attached to the sale of a bond would constitute a sale of the warrant.
True
44
May the Administrator levy fines on a registrant?
No
45
May the Administrator initiate criminal or civil liability action against a registrant?
yes
46
When will an offer fall under an Administrator's jurisdiction?
If the offer originated in, was directed in, or was accepted in the Administrator's state
47
If the Administrator believes a person has violated or is about to violate the USA, may a stop order be issued?
yes
48
Does the Administrator require proof of wrongdoing to initiate an investigation?
No, but she does need to be able to refer to a rule or order when starting the investigation.
49
When conducting an investigation of wrongdoing, is the Administrator limited to state boundaries?
No. The Administrator may subpoena books, records, and witnesses from inside and outside the state.
50
If found civilly liable for violating the USA, what is the penalty?
The original amount paid, plus the legal rate of interest, attorney fees, and court costs, minus any cash received
51
Who is the official that monitors and administers a state's securities laws?
The Administrator or Commissioner
52
May the Administrator set net capital requirements for BDs?
Yes
53
Is there a limit to the amount of net worth the Administrator may require of an IA?
Yes. The Administrator may not set a requirement that exceeds the IA's home state.
54
If the Administrator enjoins an agent's registration and a hearing is requested, when must the hearing be held?
15 days
55
True or False: A gift of non-assessable stock would constitute a sale.
False
56
For how long does the Administrator maintain jurisdiction over a registrant after a withdrawal of registration?
1 year
57
If the Administrator believes a person has violated or is about to violate the USA, may an injunction be issued?
No. The Administrator may not issue an injunction. Injunctions may only be issued by a court of competent jurisdiction.
58
A person may appeal a stop order issued by the Administrator within _____ days.
60
59
The appeal of an administrative order is made before a court of _________________________.
a court of competent jurisdiction (state court).
60
Does the appeal of an administrative order act as a stay of the order?
No
61
The maximum criminal penalty for violations of the USA is ____ years in prison and/or up to a $______ fine.
3 years in prison and/or up to a $5,000 fine
62
The statute of limitations for criminal violations of the USA is ____ years.
5
63
Statute of limitations for USA civil violations is ___ yrs. of occurrence or ___ yrs. of discovery, whichever is first.
3 yrs. of occurrence or 2 yrs. of discovery
64
What is a letter of rescission?
An offer to buy back a security from a client when that security was sold in violation of the USA
65
A customer must respond to a letter of rescission within _____ days or lose the right to sue.
30
66
What is the maximum penalty for criminal violations of the Investment Company Act of 1940?
5 years in prison and/or a $10,000 fine
67
A person subject to an SEC order may appeal the order to the U.S. Court of Appeals within _____ days.
60
68
Criminal penalties for violating the IA Act of 1940 may not exceed $_______ and/or imprisonment not exceeding ___ years.
$10,000; 5 years
69
Who enforces the Uniform Securities Act?
The State Administrator
70
True or False: The Administrator may bring a case in a civil court.
True
71
Define jurisdiction.
The power to interpret and apply the law or the territorial range of authority or control.
72
An _______ is any attempt or solicitation to dispose of a security for value.
offer
73
Define assessable stock.
Stock in which the issuer is allowed to demand additional funds from existing stockholders.
74
A hearing will be held ____ days after a written request.
15
75
True or False: An individual may be denied registration due to lack of experience.
False. However, a lack of training, knowledge, and experience may be grounds for denial.
76
What are some reasons for the Administrator denying a securities' registration statement?
Filing false registration documents, issuer's business is illegal, spread is unfair, or failing to pay the filing fee.
77
True or False: The Administrator may issue an injunction.
False. Only a court may issue an injunction, however, the Administrator may issue a cease and desist order.
78
What may a purchaser recover from civil damages?
Full purchase price, plus interest, court costs, and attorney fees, minus any income received from the security
79
Statute of limitations on a civil suit is ___ years from occurrence or ___ years from discovery, whichever comes first.
3 years from occurrence or 2 years from discovery
80
The maximum criminal penalties under the USA are a fine of $_______ and ____ years in prison.
$5,000; 3 years
81
May the Administrator revoke the registration of a federally covered adviser?
No. However, she may require the IA to notice file.
82
An appeal of an SEC order must be filed within _____ days.
60
83
What action may an Administrator take on receipt of a complaint regarding an ad that originated from another state?
Investigate the complaint
84
True or False: The Administrator may enjoin (issue an injunction) a registered individual or firm.
False
85
Administrator has the power to issue a ________________ order, but not an __________.
cease and desist order, not an injunction
86
True or False: An Administrator is not required to provide written findings of fact when revoking a registration.
False
87
True or False: To revoke registration, Administrators must send registrants all documents created in the investigation.
False
88
True or False: An agent may be arrested by the Administrator for refusing to cooperate with an investigation.
False. The Administrator does not have the authority to arrest a person who violates state law.
89
True or False: An Administrator may require a mutual fund to file its advertising.
False. Mutual fund advertising is filed with FINRA, not the Administrator.
90
True or False: If FINRA issues an order against a firm, an Administrator may take action against a BD's registration.
True
91
True or False: An Administrator may not retroactively enforce orders and revocations.
True
92
True or False: Administrators are permitted to issue summary orders denying certain exemptions.
True
93
In order to qualify for an exemption, who bears the burden of proof?
The person claiming the exemption
94
True or False: Registration denial orders issued by an Administrator are final, binding, and may not be appealed.
False
95
May the Administrator audit the books and records of a registered firm?
yes
96
If a client has been defrauded by an BD or IA, the firm may be required to ________ commissions/fees.
disgorge
97
If an advisory firm ceases operations, how long must it maintain a surety bond?
3 years
98
True or False: Ease of ownership transfer is an advantage to stock ownership as opposed to ownership in a partnership.
True. Partnership interests are typically illiquid, whereas stock is easy to buy and sell.
99
Administrators may take action within ___ days if a judgment is disclosed prior to a registration's effective date.
90
100
When is an offer subject to state securities laws?
When it originates in, is directed to and received in, or is accepted in the state
101
If a client has been defrauded by her BD or IA, what costs may she sue to recover?
The cost of the security or the cost of the advice, commissions, legal fees, interest, less any income received
102
At the state level, who may appoint an officer to lead an investigation?
The Administrator

Series 66 (12 decks)

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