Chapter 8 Part 2

Question 1

The Administrator must always consider the

Answer 1

public’s best interest when rendering decisions or making amendments

Question 2

Administrators may either

Answer 2

grant registration, limit the activities of a registrant, or institute proceedings to deny a registration.

Question 3

If a registration is already granted and the Administrator finds it in the best interest of the public, he may also

Answer 3

Suspend a registration; revoke a registration; Bar a registrant from association with a registered broker-dealer or investment adviser

Question 4

The Administrator may postpone or suspend registration pending a final determination of the matter. The applicant and the employing broker-dealer or investment adviser must be notified of the action, the

Answer 4

reasons for the action, and the fact that a hearing will be scheduled within 15 days of a written request

Question 5

the Administrator may deny, suspend, revoke, cancel, or withdraw the registration of any registrant that has been the subject of a foreign

Answer 5

securities regulator’s disciplinary action within the past five years.

Question 6

the Administrator may deny or revoke the registration of a particular

Answer 6

paitner, officer, or director without disturbing the status of the firm.

Question 7

if a broker-dealer files for bankruptcy, the Administrator must first request a court hearing to obtain

Answer 7

an order appointing the Administrator to act as the receiver. The receiver will conduct an orderly liquidation of the firm’s assets and attempt lo satisfy creditor claims. Customer accounts will be insured under SIPC

Question 8

The disqualification of an agent of a broker-dealer or of any employee of an investment adviser may not be used against the firm unless the employee’s disqualification is based on

Answer 8

lack of supervision

Question 9

the disqualification of a director, officer, or partner, as distinct from an ordinary agent, can be the basis for

Answer 9

a proceeding against the firm’s registration, if the Administrator feels that it is in the public interest to do so

Question 10

Proceedings by the Administrator must be accomplished with

Answer 10

appropriate notice to the registrant, the opportunity for a hearing, written findings of fact, and conclusions of law

Question 11

When the Administrator makes a determination after a hearing, the decision must be

Answer 11

in writing, along with the legal basis of the decision and the facts that support the case. If a registrant disagrees with either the legal reasoning or the truth of the facts given, this can be used as the basis for an appeal

Question 12

Although the registrant may appeal these actions, activities within the state will be suspended until a

Answer 12

decision is rendered by a court of competent jurisdiction

Question 13

Any appeal must be filed with a state court within

Answer 13

60 days. However, the appeal does not stay (suspend) the Administrator’s order

Question 14

The power to alter stale blue-sky laws lies with

Answer 14

the slate legislature

Question 15

However, if Administrators believe it is in the public interest, they have the power to

Answer 15

amend or repeal any rule, form, or order related to registration, reports, definitions, terrns, rules interpreting the law, and other activities necessary to carry out the provisions of the USA

Question 16

The Administrator has the power to initiate

Answer 16

investigations to determine whether any provisions of the Act are about to be violated, or have been violated. In pursuing investigations, the Administrator may require written statements under oath detailing facts and circun1stances concerning the suspected violation. The investigations may take place in the Administrator’s home state or in another state, and may be either public or private. The USa refers to the Administrator’s overall power and ability to investigate as her inspectorial power

Question 17

the Administrator may also

Answer 17

“subpoena witnesses and require that they produce materials relevant to the inquiry. No one may be prosecuted, or retaliated against, for testifying or providing information
pursuant to a subpoena. Adtninistrators may issue subpoenas in their own state at the request of a securities agency or the Administrator of another state, as long as the allegations under investigation would constitute a potential violation in the Administrator’s home state”

Question 18

No one is excused from responding to a

Answer 18

subpoena. If the subpoena is ignored, the Administrator may request enforcement by the court. Failure to obey the court’s orders is punishable as contempt of court

Question 19

A cease and desist order is a

Answer 19

“demand to halt an activity immediately, or face legal action. Such orders
are effective on the date of issuance. The Achninislrator may issue a cease and desist order against any person who has engaged in, is engaging in, or is about to engage in any act or practice constituting a violation of the USA.”

Question 20

Cease and desist orders may be issued

Answer 20

without a hearing and must include a statement as to whether the Administrator will seek a civil penalty or the costs of the investigation. The statement must also include the reasons for the order and a notice that a hearing will be held within 15 days after a written request is made