The State Securities Administrator And The Uniforms Securities Act Flashcards
True or false. The USA requires the administrator to publish all rules and orders
True
Has the power to deny, revoke or suspend the registration of a security, an agent, or a firm
The administrator
True or false. An administrator may, without prior notice, revoke the exempt status of a Securities transaction
True
True or false. If the state Securities administrator issues an order, that order will be enforced against a specific registrant or activity. Also, if this specific registrant files a petition within 60 days the order can be suspended until the petition is answered
False. Any affected party May challenge an administrators order within 60 days of issuance by filing a written petition but during the time that the challenges pending the order will remain in effect
True or false. An administrator may enter an order against a registered firm agent or security without holding a hearing
True this is known as a summary order
If the administrator enters an order on a summary basis the administrator must send notice to all parties against whom the order was entered. The notice must provide the details of the order as well as the reasons for entering the order
True or false. Parties affected by an administrator’s order must also be notified that a hearing will be granted within 25 days of receipt of a written request
False. The parties must also be notified that a hearing will be granted within 15 days of receipt of a written request
The administrator’s order may be appealed to the court system within how many days?
60
If the administrator suspends the registration of a firm all of the individuals who are registered with the firm will have their registrations placed in suspense status. After the term of suspension has been completed all registrations will be reactivated. If their firms registration has been revoked all individuals whose registrations were not revoked would be required to find a new firm to become associated with.
Take note
Is an administrative order taken against an issuer of a security that stops the security from being sold in the administrator state
Stop order
Is an order against a person or a firm who is engaging in or about to engage in an activity that the administrator deems unacceptable
Cease and desist
Anyone who displays contempt for the administrators order is guilty of?
Contumacy
And maybe found in contempt of court if the administrator asked the court to enforce his orders
An administrator May investigate a broker dealer, a state investment advisor, or an agent in any state if the administrator believes that a violation has taken or may take place
While the administrator May investigate and take action in all of the above situations, the administrator does not have jurisdiction over activities that take place exclusively outside of the administrator state
Take note
True or false. The state administrator has the power to arrest anyone within their state for violation of Securities laws
False. The administrator has no power to arrest anyone and must refer the case to the attorney general or other office and power to make arrests
Anyone who has found to have knowingly and willingly criminally violated the laws of the USA is subject to a $5,000 fine and or 3 years in prison
Take note
People who criminally violate the investment advisors Act of 1940 are subject to a $10,000 fine and / or 5 years in prison
Take note
Civil actions may be taken against
An agent, a firm, the agent supervisor
Sets forth model legislation for State Securities laws
The USA
The only time that a state Securities administrator has any authority to investigate a federally registered investment advisor is ?
if the advisors principal office is located within the administrator state
Is where the executive and C-level directors maintain offices
The principal office
What constitutes a transaction or sale of a security?
The offer and acceptance of a security
Is the acknowledgment and offer to repurchase a security sold for its original value while also agreeing to pay interest for the time period that the money was invested
This often occurs when a seller of a security determines that the sale has violated a provision of the USA
Rescission
Note that if the buyer does not accept the offer of rescission within 30 days, the seller has no further liability with regard to the sale of those securities and the buyer forfeits the right to sue
Take note. An investor is acknowledgment that a sale is in violation of the USA is never valid
A customer with an investment objective of speculation convinces they’re representative to sell them an interest in a private placement that will pay the representative a commission and is in violation of the USA. The investor is a non-accredited investor and signs a letter stating that they recognize that the investment is in violation of the USA and will not Sue or otherwise hold the representative or their firm responsible for any losses. this acknowledgment by the client is neither valid nor enforceable and in no way protects the representative or the firm
If a buyer of a security finds that the sale of the security violates any of the provisions of the USA, the purchaser has two years from the discovery of the violation or 3 years from the purchase date, whichever comes first, to take action
Important note
