Chapter 6 - Remedies and Administrative Provisions

Question 1

The state admin is charged with the following duties

Answer 1

• initiate investigations of potential securities violations involving residents of their state or transactions in their state
• collect evidence
• issue subpoenas requiring people to testify
• request courts and law enforcement to pursue appropriate action
• communicate and publish investigative and hearing results to the public
• make, amend, or rescind orders and rules
• administer oaths and affirmations
• require the production of documents and records
• issue and apply to enforce the subpoenas

Question 2

If a person fails to follow admin’s directions/orders, they may

Answer 2

• hold person in contumacy
• order person to appear before admin and testify
• request that an appropriate court issue an injunction
• issue a cease and desist order
• bring an action before court to enforce compliance
• issue an order revoking, denying, suspending or canceling a registration or license (need to give prior notice to all interested parties in this case)

Question 3

Orders that are sent by the admin are effective ______

Answer 3

immediately

Question 4

A request for a hearing must be granted within ______

Answer 4

15 days

Question 5

For criminal violations, must….

Answer 5

have been intentional and must be brought before a court within 5 years of the action

Question 6

Total civil penalties that a firm could be required to pay are equal to one or more of the following, minus any income earned on the investments in question:

Answer 6

• fees and commissions previously paid
• amount paid for the security
• amount paid for investment advise
• amount lost due to investment advise
• interest that would have been otherwise earned
• court and legal costs

Question 7

Statute of limitations for a civil case is either

Answer 7

• 2 years from the date the client discovers the violation or
• 3 years from the date of the violation itself, whichever occurs first

Question 8

Recission is when

Answer 8

a BD, adviser, issuer offers to give the client back their money with interest to avoid a civil suit. If not accepted in 30 days then considered denied.

Question 9

An admin must also issue the “final order” (basically the final verdict) on an issue. The final order may be one of the following

Answer 9

• vacated (charges or penalties are dropped)
• finalized (charges and penalties are confirmed)
• modified (charges and penalties changed)

Question 10

An “interpretive opinion” is when an admin

Answer 10

cuts off the investigation and does not pursue it further