Administrative Procedures

Question 1

The State Administrator is empowered, upon discovering a violation of the Uniform Securities Act, to:

Answer 1

• issue a cease and desist order, with or without a prior hearing
• seek a permanent injunction against a person
• make a court showing so that a receiver is appointed to protect the assets of customers held by the IA

Question 2

The State Administrator is empowered to:

Answer 2

I. issue subpoenas to persons inside or outside that State
II. issue a cease and desist order
III. issue an order suspending or revoking a registration

Question 3

Can a state administrator enjoin persons from operating in the securities business?

Answer 3

No. Only a court of law can enjoin a person from being in the securities business - the Administrator cannot do so.

Question 4

If a person disagrees with a final order of the Administrator, he or she must petition the appropriate court within what time period?

Answer 4

60 days

Question 5

Can customer securities on margin be commingled with other customers’ securities?

Answer 5

Yes. The prohibition is on commingling customer securities with proprietary (the firm’s) positions

Question 6

Civil liability under the Uniform Securities Act requires the violator to:

Answer 6

• buy back the security at the original purchase price
• pay any reasonable court and attorney’s costs
• pay interest at the legal rate (6%); reduced by any income derived from that security

Question 7

Civil suits alleging violation of the Uniform Securities Act must be brought within:

Answer 7

• 2 years of discovery

- no later than 3 years after violation actually occurred

Question 8

If a customer exercises the right of rescission allowed under the Uniform Securities Act, the offer must be accepted within:

Answer 8

30 days of written notice from the seller

Question 9

NASAA states that INVESTMENT ADVISER order tickets must contain:

Answer 9

Name of the person at the IA who recommended the transaction;

Name of the person who placed the order;

Date of order entry;

Name of account for which order was entered;

Name of broker-dealer or bank to which the order was sent for execution;

Whether the order was discretionary

Question 10

Are commissions on sales required to be disclosed prior to the sale?

Answer 10

No - but they must be disclosed on the confirmation

Question 11

The Investment Advisers Act of 1940 prohibits the use of _______________ in advertising

Answer 11

Customer Testimonials. Federal supremacy takes precedence here