SERIES 66 STC CHAPTER 8 || with Verified Solutions.
True or False: An individual may be denied registration due to lack of experience. correct
answers False. However, a lack of training, knowledge, and experience may be grounds for
denial.
May the Administrator initiate criminal or civil liability action against a registrant? correct
answers Yes. An Administrator may initiate action, but may not impose fines or penalties for
violations.
True or False: An Administrator may cancel a registration without the opportunity for a
hearing. correct answers True. Cancellation may be due to the death of an agent or a firm no
longer being in business.
True or False: An Administrator may require a mutual fund to file its advertising. correct
answers False. Mutual fund advertising is filed with FINRA, not the Administrator.
When conducting an investigation of wrongdoing, is the Administrator limited to state
boundaries? correct answers No. The Administrator may subpoena books, records, and
witnesses from inside and outside the state.
True or False: The exercise of convertible securities is considered a sale under the USA.
correct answers FALSE
If a client has been defrauded by an BD or IA, the firm may be required to ________
commissions/fees. correct answers If a client has been defrauded by an BD or IA, the firm
may be required to DISGORGE commissions/fees.
If shares of stock are freely given with the purchase of a bond, is this considered an offer and
sale? correct answers YES
An _______ is any attempt or solicitation to dispose of a security for value. correct answers
An OFFER (OFFER TO SELL) is any attempt or solicitation to dispose of a security for
value.
True or False: An agent may be arrested by the Administrator for refusing to cooperate with
an investigation. correct answers False. The Administrator does not have the authority to
arrest a person who violates state law.
Statute of limitations for USA civil violations is _____ yrs. of occurrence or ___ yrs. of
discovery, whichever is first. correct answers Statute of limitations for USA civil violations is
THREE yrs. of occurrence or TWO yrs. of discovery, whichever is first.
May an Administrator subpoena records in another state to investigate potential violations
that occurred in his own state? correct answers Yes, the Administrator has broad inspectorial
power, which stretches beyond his own state.
The Administrator has the power to issue a _____ ___ ______ order, but not an __________.
correct answers The Administrator has to power to issue a cease and desist order, but not an
injunction.
, Can a BD punish one of its agents for responding to a subpoena? correct answers No. This is
a prohibited action.
Define assessable stock. correct answers Stock that allows the issuing entity to demand
additional funds from existing stockholders
If the Administrator believes a person has violated or is about to violate the USA, may a stop
order be issued? correct answers YES
For how long does the Administrator maintain jurisdiction over a registrant after a
withdrawal of registration? correct answers ONE YEAR
A _______ is any agreement or contract to dispose of a security for value. correct answers A
SALE is any agreement or contract to dispose of a security for value.
May the books and records of a federal covered adviser be subject to inspection by an
Administrator? correct answers YES
True or False: The Administrator may confiscate records. correct answers False. The
Administrator may inspect records, but cannot confiscate them.
What action may an Administrator take on receipt of a complaint regarding an ad that
originated from another state? correct answers Investigate the complaint
True or False: An Administrator may issue a cease-and-desist order before a violation has
occurred. correct answers TRUE
What are some reasons for the Administrator denying the registration statement for a
securities offering? correct answers Filing false registration documents, issuer's business is
illegal, spread is unfair, or failing to pay the filing fee.
If a cease-and-desist order is issued against an agent, the agent may file an appeal within
_____ days. correct answers If a cease-and-desist order is issued against an agent, the agent
may file an appeal within 60 days.
Is being charged with a felony or securities-related misdemeanor grounds for statutory
disqualification? correct answers No. Statutory disqualification is due to conviction for any
felony or securities-related misdemeanor in the past 10 yrs.
True or False: The Administrator may bring a case in a civil court. correct answers True.
Both the Administrator and a private citizen may bring a case in civil court.
Is the conversion of a bond into stock considered an offer or sale? correct answers NO
The appeal of an administrative order is made before a court of
_________________________. correct answers The appeal of an administrative order is
made before a court of competent jurisdiction (state court).
True or False: An individual may be denied registration due to lack of experience. correct
answers False. However, a lack of training, knowledge, and experience may be grounds for
denial.
May the Administrator initiate criminal or civil liability action against a registrant? correct
answers Yes. An Administrator may initiate action, but may not impose fines or penalties for
violations.
True or False: An Administrator may cancel a registration without the opportunity for a
hearing. correct answers True. Cancellation may be due to the death of an agent or a firm no
longer being in business.
True or False: An Administrator may require a mutual fund to file its advertising. correct
answers False. Mutual fund advertising is filed with FINRA, not the Administrator.
When conducting an investigation of wrongdoing, is the Administrator limited to state
boundaries? correct answers No. The Administrator may subpoena books, records, and
witnesses from inside and outside the state.
True or False: The exercise of convertible securities is considered a sale under the USA.
correct answers FALSE
If a client has been defrauded by an BD or IA, the firm may be required to ________
commissions/fees. correct answers If a client has been defrauded by an BD or IA, the firm
may be required to DISGORGE commissions/fees.
If shares of stock are freely given with the purchase of a bond, is this considered an offer and
sale? correct answers YES
An _______ is any attempt or solicitation to dispose of a security for value. correct answers
An OFFER (OFFER TO SELL) is any attempt or solicitation to dispose of a security for
value.
True or False: An agent may be arrested by the Administrator for refusing to cooperate with
an investigation. correct answers False. The Administrator does not have the authority to
arrest a person who violates state law.
Statute of limitations for USA civil violations is _____ yrs. of occurrence or ___ yrs. of
discovery, whichever is first. correct answers Statute of limitations for USA civil violations is
THREE yrs. of occurrence or TWO yrs. of discovery, whichever is first.
May an Administrator subpoena records in another state to investigate potential violations
that occurred in his own state? correct answers Yes, the Administrator has broad inspectorial
power, which stretches beyond his own state.
The Administrator has the power to issue a _____ ___ ______ order, but not an __________.
correct answers The Administrator has to power to issue a cease and desist order, but not an
injunction.
, Can a BD punish one of its agents for responding to a subpoena? correct answers No. This is
a prohibited action.
Define assessable stock. correct answers Stock that allows the issuing entity to demand
additional funds from existing stockholders
If the Administrator believes a person has violated or is about to violate the USA, may a stop
order be issued? correct answers YES
For how long does the Administrator maintain jurisdiction over a registrant after a
withdrawal of registration? correct answers ONE YEAR
A _______ is any agreement or contract to dispose of a security for value. correct answers A
SALE is any agreement or contract to dispose of a security for value.
May the books and records of a federal covered adviser be subject to inspection by an
Administrator? correct answers YES
True or False: The Administrator may confiscate records. correct answers False. The
Administrator may inspect records, but cannot confiscate them.
What action may an Administrator take on receipt of a complaint regarding an ad that
originated from another state? correct answers Investigate the complaint
True or False: An Administrator may issue a cease-and-desist order before a violation has
occurred. correct answers TRUE
What are some reasons for the Administrator denying the registration statement for a
securities offering? correct answers Filing false registration documents, issuer's business is
illegal, spread is unfair, or failing to pay the filing fee.
If a cease-and-desist order is issued against an agent, the agent may file an appeal within
_____ days. correct answers If a cease-and-desist order is issued against an agent, the agent
may file an appeal within 60 days.
Is being charged with a felony or securities-related misdemeanor grounds for statutory
disqualification? correct answers No. Statutory disqualification is due to conviction for any
felony or securities-related misdemeanor in the past 10 yrs.
True or False: The Administrator may bring a case in a civil court. correct answers True.
Both the Administrator and a private citizen may bring a case in civil court.
Is the conversion of a bond into stock considered an offer or sale? correct answers NO
The appeal of an administrative order is made before a court of
_________________________. correct answers The appeal of an administrative order is
made before a court of competent jurisdiction (state court).
