Unit 12: Remedies and Administrative Provisions Flashcards
Administrator Jurisdiction
transactions originated in, directed to, or accepted in their state.
Administrator can:
-conduct investigations
-issue subpoenas
-cease and desist
-deny, suspend, revoke registrations
-civil or criminal penalties
Offer to sell
Attempt to offer or dispose of, or to buy, a security or interest in a security.
Sale
Every instance of a transfer of security for money or other valuable consideration.
Assessable stock
stock issued at discount, issuer has right to “assess”: shareholder must provide difference
-not common anymore, but still tested.
Gifting assessable stock
is considered a sale
Excluded from definition of sale
-bona fide pledge
-gift of non-assessable stock (IS considered sale if included as bonus for purchasing something else)
-stock dividends
-shareholder vote which affects shares
-security issued in exchange for outstanding claim/interest
Felony/Securities misdemeanor 10 years
will lead to denial. but even after 10 years, it must always be disclosed/reported
Unless acting summarily, admin must
-give appropriate notice to applicant and employer
-opportunity for learning/getting experience
-any written findings and conclusions
After termination of registration
Admin has 1 yr of jurisdiction for any potential violations (FINRA has 2 yrs)
Cancelation
occurs due to death, dissolution, or mental incompetency
If the B/D or IA is suspended, the Agent/IAR
is placed in “suspense” until B/D IA is reactivated, or agent/IAR finds new firm.
Rights of recovery (for buyer)
owed: original purchase, legal rate (interest rate), reasonable fees/cost, and any security income. there can be no punitive or treble damages
Right of rescission (for seller)
when seller discovers violation, sends letter, buyer has 30 days. there can be no punitive or treble damages.
Statute of limitations
the sooner of:
-3 years from violation
-2 years from discovery
