Chapter 7

Question 1

What does the administrator have jurisdiction over in their state?

Answer 1

Any offer or sale including:
-Warrants
-Assessable stock (stock which gives the issuer the right to demand additional capital from the older)

Question 2

Which state has jurisdiction for the following mediums:
1) US Mail or Telephone
2) Television or Radio
3) Newspaper or Magazine

Answer 2

1) US Mail or Telephone-The state from which an offer originates and the sate to which it was directed and received (for mail, not the state to which it may be forwarded)
2) TV or Radio- One state only; the state in which the camera or microphone is located
3) Newspaper/Magazine- One state or no state; the state in which it is published, unless more than 2/3rds of the circulation is outside of the state

Question 3

Powers of the Administrator

Answer 3

1) Deny, suspend or revoke registration of a firm or employee.
2) Bar an employee from association with any registered firm.
3) Limit the activities of a registrant.
*May not impose levy fines or impose prison sentences directly

Question 4

Justifications for statutory disqualification (7):

Answer 4

1) Providing false or misleading information on apps
2) Conviction of any felony or misdemeanor involving securities
3) Prohibition by any court in securities
4) Willfully violating securities laws of any foreign jurisdiction within the past 5 years
5) Insolvency
6) Failure to pay the proper filing fee
7) Lack of qualification on the basis of training, experience, and knowledge of the securities business

Question 5

How can administrators enforce the USA (3)?

Answer 5

1) Inspectorial power
2) Cease & Desist
3) Confidentiality

Question 6

Civil Liabilities; the client may sue to recover

Answer 6

1) The original consideration
2) Interest
3) Court costs and reasonable attorney fees
4) Any income received from the security/advice

Question 7

Statute of Limitations

Answer 7

1) 3 Years from occurrence
2) OR 2 years from the discovery

Question 8

Letter of recission

Answer 8

Agent offers to:
-Buy back the security
-Plus interest
-Minus any income received

Recission: the unwinding of a transaction to bring the parties (as much as possible) to the position at which they were before entering into the contract.

Customer has 30 days to respond.

Question 9

Any person who WILLFULLY violates any provision of the USA may be subject to:

Answer 9

1) 3 years in prison
*if agent had no knowledge of the rule violated, they may avoid prison.
2) $5000 fine or both
3) Five years statute of limitations