Unit 8

Question 1

Any person who willfully violates the Uniform Securities Act may be fined up to $_____ and imprisoned for up to ____ years.

Answer 1

$5,000; 3 years

*However, if the person proves that he had no knowledge of the fraudulent activities or that he was not aware or could not have been reasonably aware of what was going on, then a prison sentence may not be imposed.

Question 2

If an agent unknowingly (without fraud) sells a security in violation of a state registration provision, her customer must take action for recovery within __ years of the occurrence of the violation, or within __ years of discovery of the violation, whichever comes first.

Answer 2

3; 2

Question 3

True or False:
The Administrator may issue a cease-and-desist order to an agent of a broker-dealer without a hearing

Answer 3

True

Question 4

True or False:

Administrators have inspectorial powers which allow them to subpoena records and witnesses from both inside and outside their state.

Answer 4

True

Question 5

When securities are gifted, the deduction that a donor may claim is equal to __________________________________.

Answer 5

the market value of the securities at the time of the gift

Question 6

If shares are gifted to an individual, the recipient’s cost basis is the ___________ or the ___________, whichever is less.

Answer 6

original purchase price; current market price

Question 7

True or False:
A sale takes place when a warrant or right is purchased.

Answer 7

True

Question 8

A gift of ____________ stock is considered both an offer and a sale.

Answer 8

assessable

Question 9

A letter of rescission is used when a firm realizes that it has affected an illegal
sale. This letter represents an offer to buy back the security, plus interest, minus any income received on the security. If the client doesn’t act within __ days of receipt of the letter, the client is generally not permitted to bring action in court.

Answer 9

30