Unit 5 (2)

Question 1

Can you withdraw registration once an investigation has started?

Answer 1

No

Question 2

After an investigation, the administrator wishes to have the registration of an investment advisor revoked. All of the following is true

Answer 2

The IA has a right to a hearing. The appeal must be filed within 60 days of the final order. The administrator must point to specific facts or law violated by the IA. You can not withdraw registration once an investigation has been started

Question 3

Can the administrator deny registration for lack of experience?

Answer 3

No

Question 4

Can the administrator limit your registration as an investment advisor?

Answer 4

Yes. The administrator can determine that you are not qualified to be an IA and can limit you to just a BD

Question 5

Can the administrator take into consideration that you will be working under the supervision of registered IA during registration?

Answer 5

Yes. But lack of experience is not a reason for denial

Question 6

When registering with the administrator, can a company state that there is virtually no chance the business model will be successful and investors should anticipate losing their entire investment?

Answer 6

They can say this. It’s not a cause for denial by the administrator, full disclosure has to happen.

Question 7

What is the strongest action the Administrator can take against you without a court order?

Answer 7

Revoking your registration

Question 8

Rights of rescission entitles you to recover

Answer 8

1. Amount of initial investment
2. Reasonable rate of interest on that amount
3. Attorney’s fees,
   less any income received on the investment

Question 9

If the administrator finds that you have acted fraudulently this may result in

Answer 9

A receiver being appointed over the IAs assets and restitution paid to the victim(s)

Question 10

Maximum fine for violating the USA?

Answer 10

$5,000

Question 11

Can you go to jail for violating the USA?

Answer 11

Yes, the maximum prison sentence is 3 years or a max fine of $5,000.

Question 12

The definition of “offer” includes

Answer 12

1. An attempt to dispose of a security for value
2. A solicitation of an offer to buy an interest in a security for value
3. An offer to dispose of a security for value

Question 13

Offer or Offer to Sell

Answer 13

Any activity in an effort to dispose of a security for value such as the offer to sell or the solicitation of an offer to buy a security.

Question 14

Is the actual sale of a security included in the definition of an offer or offer to sell?

Answer 14

No

Question 15

Sale or Sell

Answer 15

Includes every contract of sale, contract to sell, or any disposition of a security for value.

Question 16

Non-punitive termination of a securities professionals registration can be done through which of the following

1. Cancellation
2. Suspension
3. Revocation
4. Withdrawal

Answer 16

1 and 4 Cancellation and Withdrawal are non-punitive methods of termination of a persons registration. Suspension, revocation, and denial are considered forms of punishment

Question 17

Is there a time limit associated with a cease and desist order?

Answer 17

No

Question 18

Can the administrator deny application for an agent if the applicant is insolvent?

Answer 18

Yes.