Administrative Procedures

Question 1

contumacy

Answer 1

failure to obey the court ordered subpoena and may be punishable as a contempt of court

Question 2

sale defined

Answer 2

disposition of a security, or interest in a security, for value.

Question 3

Powers and Duties of the Administrator

Answer 3

make, amend, or appeal any administrative rules, regulations, or orders in connection with registration, reports; and other practices necessary to carry out the provisions of the Act and to preserve and protect the interest of the public.

Question 4

Administrator Jurisdiction

Answer 4

The administrator has authority over a person when an offer to buy or sell is made and/or accepted in the state. It also applies if either the agent or the client resides in that state, or the transaction occurred in the state.

Question 5

offer defined

Answer 5

any attempt to dispose of a security or solicitation of an offer to buy a security or an interest in a security, for value.

Question 6

criminal penalties

Answer 6

a person found guilty of willful violations of the USA will be subject to a fine up to $5,000, imprisonment for up to 3 years, or both. The statue of limitations is 5 years from the date of offense.

Question 7

assessable stock

Answer 7

a security in which the issuer may demand an additional payment of capital from the investor

Question 8

offer of recession (unlawful sale)

Answer 8

if the BD or agent discovers they’ve illegally offered a security this written offer must be made prior to a lawsuit being initiated by the buyer. The offer must be accepted by the customer within 30 days, or the customer can keep the securities

Question 9

Statute of Limitation (civil liability)

Answer 9

3 years from the date of sale or rendering of investment advice, or 2 years after the discovery of the unlawful transaction, whichever comes first.

Question 10

Rights of recovery

Answer 10

purchase price, plus interest from the date of purchase at the legal rate (published by the state), costs and reasonable attorney fees, less any income earned while the security was owned.

Question 11

Civil liability

Answer 11

occurs when a person violate the act unintentionally. The remedy is for the customer to recover the purchase price of the security or cost of advice plus interest.

Question 12

Administrator’s Rights

Answer 12

1. administer oaths and affirmations
2. subpoena witnesses and compel their attendance
3. take evidence
4. require parties to produce documents

Question 13

offers via media

Answer 13

an offer made in a bona fide newspaper or other publication of general, regular and paid registration, which is not published in the state, or is published in state, but 2/3 or more of circulation is outside of the state in the last 12 months

Question 14

Offer to sell ( jurisdiction)

Answer 14

The administrator has authority over a person who offers to.

• sell, or sells a security when an offer to sell is made in the state, or ‘
• an offer to buy is made in the state and is accepted in the state.

Question 15

offer to purchase (jurisdiction)

Answer 15

The administrator has authority over a person who offers to:

• buy, or buys a security when an offer to buy is made in the state, or
• an offer to sell is made in the state and accepted in the state