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Series 65 (FIN-451) > Unit 12 > Flashcards

Unit 12 Flashcards

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Series 65 flashcards
1
Q

Sale

A

Any security given or delivered with, or as a bonus on account of, any purchase of securities or any other thing

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2
Q

Offer to sell

A

Attempt to sell (Solicitation)

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3
Q

Assessable stock

A

A type of stock issue sold to investors at a discount in exchange for the right to come back for more money at a later date

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4
Q

Exclusions from sale

A
  1. Bona fide pledge/loan
  2. Gift of nonassessable stock
  3. Stock dividend
  4. Class vote by stockholders, act incident to a judicially approved reorganization with which a security is issued in exchange for one or more outstanding securities, claims, or property interest, or partly in such exchange and partly for cash
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5
Q

Jurisdiction

A

The legal authority to regulate securities activities that take place in the state

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6
Q

3 circumstances where Administrator doesn’t have jursidiction

A
  1. Television or radio broadcast that originated outside of the state
  2. Bona fide newspaper or periodical published outside of the state
  3. Newspaper or periodical published inside the state but with more than two-thirds (66%) of its circulation outside the state in the last year
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7
Q

What is a bona fide newspaper?

A

Example: New York Times

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8
Q

4 broad powers of Administrator

A
  1. make, amend, or rescind rules and orders 2. conduct investigations/issue subpoenas
  2. Issue cease and desist orders
  3. Deny, suspend, cancel, revoke registrations/ licenses.
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9
Q

What rule applies to

A

Everyone

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10
Q

What order applies to

A

Specific instances

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11
Q

Contumacy

A

Stubborn refusal to obey or comply with authority, especially a court order or summons

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12
Q

Who cease and desist orders are directed to

A

Individuals

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13
Q

Definition of enjoined

A

Legal term that is used to refer to a person who is the subject of an injunction.

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14
Q

Two actions Administrator can take if a person is violating acts or rules

A
  1. Issue cease and desist
  2. Issue injunction to enforce order being violated
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15
Q

Definition of acting summarily

A

Order, without having to go through the hearing process, a postponement or suspension of a registration

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16
Q

When must an applicant submit a written request for a hearing after being ordered

A

Within 15 days

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17
Q

Definition of final order

A

When the Administrator (or a court) renders a judgment in an action

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18
Q

If a person commits a misdemeanor, then moves to a state where that act is a felony, and applies to be a representative, what record does the Administrator look at?

A

The originally recorded misdemeanor

19
Q

3 things that must happen before registration is denied, suspended, or revoked

A
  1. Appropriate prior notice to the applicant or registrant and their employer
  2. Opportunity for hearing
  3. Written findings of fact and conclusions of law
20
Q

When an Administrator may deny, revoke, suspend a security registrant

A
  1. Files a misleading or incomplete registration statement;
  2. Is engaged in an offering that is fraudulent or made on unfair, unjust, or inequitable terms
  3. Charges offering fees that are excessive or unreasonable
  4. Has a control person convicted of a securities-related crime
  5. Is subject to a court injunction;
  6. Is engaged in a method of business that is illegal
  7. Is subject to an administrative stop order of any other state
21
Q

Vacated

A

Term used to describe lifting of stop order

22
Q

Who stop orders are directed to

A

Issuers

23
Q

When withdrawal is effective after person requests on their own initiative

A

30 days after Administrator receives it

24
Q

How long administrator retains jurisdiction after effective date of withdrawal takes place

A

One year

25
Q

What would the Administrator do if mailings to a registrant were returned with no forwarding address

A

Cancel the registration

26
Q

Why cancellation occurs

A

The result of death, dissolution, or mental incompetency

27
Q

When suspension of broker-dealer is over what happens to agent’s licenses?

A

They are reactivated

28
Q

If client’s case against broker-dealer is proven, what do they recover? (3)

A
  1. The original purchase price of the securities
  2. Interest at a rate determined by the Administrator
  3. All reasonable attorney’s fees and court costs
29
Q

Right of rescission

A

When broker-dealer buys back securities from a purchaser because they realize they were sold in violation of USA

30
Q

Letter of rescission

A

Issued by seller to buyer, buyer has 30 days to respond

31
Q

In order for a surety bond to meet the requirements of the USA, what must it provide?

A

Proof that they are entitled to collect against the bond

32
Q

When a client must commence a lawsuit to be eligible for recovery from damages

A

Three years of occurrence or two years of discovery, whichever occurs first

33
Q

If an agent chooses to appeal an Administrator’s order, when must the agent file for review of the order with the appropriate court?

A

Within 60 days after entry of order

34
Q

As a result of a hearing held by the Administrator, the registration of a broker-dealer is revoked. Waht happens to agent’s licenses?

A

They are revoked

35
Q

What administrator issues final order, what can agents do? (2)

A
  1. Obtain a review of the order in an appropriate court of law
  2. Request that additional evidence be presented to the court
36
Q

When administrator can revoke a firm’s registration (2)

A
  1. Firm is insolvent
  2. Agent within has been convicted of a felony
37
Q

Violation of the Uniform Securities Act may result in criminal penalties of up to

A

$5,000 and/or three years in prison

38
Q

Does the court or Administrator issue injunctions?

A

Court

39
Q

If an investment adviser representative commits a criminal violation of the Uniform Securities Act, how many years are they subject to legal action for?

A

5 years after the violation

40
Q

Cases in which registration will be revoked

A

Adviser has been convicted of a non-securities-related felony

41
Q

Cases in which registration will be canceled

A

Adviser is found to be mentally incompetent, cannot be located, or is no longer in business.

42
Q

As long as a broker-dealer is registered in a state, does the administrator of that state have the jurisdiction to perform an onsite, unannounced examination?

A

Yes

43
Q

Causes listed in the Uniform Securities Act that could lead to the revocation of the registration of a broker-dealer (2)

A
  1. A principal officer was convicted of a securities-related crime
  2. The firm was unable to meet its obligations as they came due

Series 65 (FIN-451) (21 decks)

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