Exam 4: Uniform Securities Act USA and State Registration Requirements

Rich Quick is a broker-dealer registered in the state of Massachusetts. He occasionally trades on abnormalities he observes in bond yield spreads for his own account, short selling a bond that appears to be overpriced based on its yield and buying a bond that is identical in almost every respect except for the price, which is less than that of the other bond. He has been able to earn arbitrage profits 95% of the time when he does this. Rich Quick

When a customer files a complaint with a broker-dealer, I. the broker-dealer must submit the complaint to the firm's compliance department. II. the broker-dealer must provide a prompt written response to the complainant. III. the broker-dealer must temporarily suspend the activities of any agent named in the complaint.

You are employed as an agent with CanDo Broker-Dealers. Your brother is software engineer with VideoMagic. When you were talking to him on the phone the other day, he told you that he overheard a conversation by some of the firm's executives that indicated that VideoMagic was about to take over another software company. Which of the following would violate insider trading rules? I. The next day, you get an unsolicited call from a client requesting that you sell his shares in Video Magic, and you execute the trade. II. You buy stock in Video Magic's target firm in anticipation that its stock price will rise when the information becomes public. III. You recommend the stock of Video Magic's target firm to investors based on the fact that, on average, the stock price of target firms increases.

Which of the following would be considered an "issuer" transaction?

Which of the following would a firm not be expected to provide to the Administrator when registering an issue of securities with the state?

A broker-dealer will be found guilty of churning an account if the account has a turnover ratio of

Individual states are prohibited from requiring a broker-dealer or investment adviser to file financial reports more frequently than:

Which of the following statements best explains the difference between an agent and a broker-dealer?

In which of the following scenarios is an investment adviser representative required to disclose the fact that someone other than the representative performed the research on which his advice to the client is based? I. The investment adviser representative recommends the same asset allocation for his client that a buddy of his did after his buddy had done some research for a client with similar characteristics. II. The investment adviser representative provides a recommendation for his client based on research provided by a broker-dealer that provides the investment adviser with its analysts' recommendations in return for trades that the investment adviser executes using the services of the broker-dealer, as well as a couple of other research sources he finds on the internet. III. The investment adviser representative submitted his client's information to a data base that provided a recommendation for the asset allocation of the client's investment monies that the adviser deemed was sound and, therefore, recommended it to his client.