Exam 4: Uniform Securities Act USA and State Registration Requirements

The Administrator may require a firm to supply it with any prospectus, pamphlet, advertisement, or other sales literature intended for prospective investors unless the security I. will be sold only through an investment advisory firm. II. is a federal covered security. III. is issued by a state credit union.

Assuming the security is not registered under the Uniform Securities Act, which of the following would not be exempt from state registration?

An arrangement wherein a terminally ill person sells a second party his life insurance policy at a discount from its face value, giving the buyer the right to the policy's face value when the seller dies is called a:

The C&S Railroad is in the process of issuing new bonds. Before these bonds can be offered for sale,

The net worth of a broker-dealer has fallen below the minimum net capital requirement specified by the state in which the broker-dealer is registered. This broker-dealer must notify the Administrator of this fact

To say a security is "exempt," means that I. it is exempt from the state's anti-fraud laws. II. it is exempt from state registration requirements. III. any transaction involving it is considered to be an exempt transaction.

Which of the following compensation arrangements between an investment adviser and an individual client with a net worth of $600,000 would be disallowed?

Which of the following would fall under the definition of "agent," as defined by the Uniform Securities Act (USA)?

Trevor is currently a registered agent in the state of Connecticut where he has been employed by Connect & Company, a broker-dealer that is registered in Connecticut and has subsidiary operations in Massachusetts, New Jersey, and New York. Trevor has moved to Massachusetts and is now associated with one of Connect's subsidiaries, a broker-dealer registered in the state. Trevor has applied to the Administrator of Massachusetts for registration as an agent. Can Trevor execute purchases and sales for clients while his registration is still pending?

An individual who represents a broker-dealer in the buying and selling of securities is called a(n):

In accordance with the Telephone Consumer Protection Act of 1991 (TCPA), if a prospective client requests to be put on your firm's Do-Not-Call (DNC) list, the client must be kept on that list for

"T + 3" refers to

When a client has purchased securities on margin, the broker-dealer

Kevin has a pair of season tickets to the Boston Red Sox games. He and his wife can't attend all the games themselves, so Kevin has created "packages" of eight games each that he is listing for sale on Craig's List. Do these "packages" meet the definition of securities, and, if so, does Kevin need to register them with the state before offering them for sale?

Registered agent Ina Scent has had her license suspended by the state Administrator prior to an administrative hearing on the order. Which of the following statements is true regarding Ina's situation?

Under the guidelines of the Bank Secrecy Act (BSA), the Treasury Department now requires broker-dealers to obtain and keep certain information relating to clients that make or receive funds transfers that involve

Which of the following are examples of the prohibited practice of manipulation in the securities markets? I. Broker-Dealer Joker is unhappy with its investment in the stock of a speculative firm and engages another broker-dealer to purchase a large number of shares from it, with the unofficial agreement to buy back those shares, offer more shares which the second broker-dealer will purchase, and so on. II. Broker-Dealer Joker has a large short position in the stock of a certain corporation. Joker offers a bonus to its agents who effect sale transactions in the stock. III. A client calls Broker-Dealer Joker with a request to purchase 20 bonds issued by Massachusetts Institute of Technology (MIT.) The bonds are currently selling for their par value of $1,000. Knowing this, Joker offers to sells the client the bonds for $120 per $100 of par, or $1,200 per $1,000 bond.

You are an investment adviser representative. Your client, Mr. I. M. Pulse, calls you with what he thinks is exciting news. He just passed a restaurant and saw Microsoft's Bill Gates having lunch with a local entrepreneur who owns a small firm in the computer software industry that trades on the OTC pink sheets. He is sure that this means Microsoft is negotiating a purchase of the smaller company and instructs you to take the cash balance in his account and buy shares of the local company. You should

Naiveté gave Mr. Smooth, owner of Smooth Construction, $40,000 in return for a promissory note that promised to pay interest at the rate of 8% a quarter, with a repayment of principal at the end of two years. The money would be used by Mr. Smooth to rehab a few beach condo units that had been severely hurricane-damaged and that Mr. Smooth had been able to purchase for "pennies on the dollar," or so he said. The first units would be completed within a month, and the rents would be used to make the interest payments. The investment was almost as risk-free as U.S. government bonds, Mr. Smooth claimed. By the end of the second year, Ms. Naiveté had received a lot of fast talk and only one of the promised interest payments. Have there been any violation of securities laws in this instance?

You are a registered agent with a broker-dealer. One of your clients visits you and wants you to sell some of the U.S. government bonds she owns and purchase shares of a specific aggressive growth mutual fund for her with the proceeds. Your client is a mentally- Competent, 84-year-old woman but, based on your other knowledge of her situation, you believe it to be an unwise move. You should