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Exam 4: Uniform Securities Act USA and State Registration Requirements

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Question 51

Multiple Choice

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A variable annuity is:

A) not a security and, therefore, does not have to be registered with the state.
B) not a security, but is still required to be registered with the state before it can be offered for sale.
C) a security and, therefore, has to be registered with the state before it can be offered for sale.
D) a security, but is exempt from state registration.

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Question 52

Multiple Choice

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Penny Swyne, an agent employed by Bear Broker-Dealers, has received a written complaint via e-mail from Mr. Wolf regarding her performance as his agent. What are Ms. Swyne's legitimate options?

A) Ms. Swyne can call Mr. Wolf and offer to meet him for a romantic dinner and try to convince him to revoke the complaint.
B) As illegal as it may sound, since the complaint was via e-mail, Ms. Swyne can hit the delete button and make it all go away.
C) Ms. Swyne must forward the complaint to the state Administrator.
D) Ms. Swyne must provide Bear Broker-Dealers with a copy of the complaint.

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Question 53

Multiple Choice

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Sam Shade had his agent's license revoked by the state of Washington for repeatedly making misleading claims about various investment to investors. He had had it with all the rain anyway and decided to move to the sunshine state of Florida. His brother-in-law was a computer whiz who made money on the side (more than his day job provided, in fact) by supplying illegal immigrants with official-looking documentation, including social security numbers. Sam Shade became Ian Creed in a few clicks of the mouse. As Ian Creed, Sam was hired by Sunny Investment Advisers, an investment adviser firm located in the Florida Keys, in a clerical role. As such, Sam/Ian had access to the confidential information of the firm's clients, which he and his brother-in-law utilized for the purpose of identity theft. Under the Uniform Securities Act guidelines, when Sam and his brother-in-law are caught in their illegal activities,

You are a registered agent with a large brokerage firm. Your client is a very busy woman. She is interested in purchasing 500 shares of Google, but she thinks this morning's opening price is too high. She's going to be in meetings and then on a transatlantic flight. She wants the purchase to take place today because she believes Google's price is just going to keep rising with only the occasional daily ups and downs. She wants you to use your discretion and try to get her the best price for the stock in today's trading session. Which of the following statements are true?

Which of the following is not in itself a reason for the Administrator to deny, suspend, or revoke the license of a person?

Under NASAA Model Rules, it is permissible for the registered representative of a broker-dealer to split his or her commission with I. a client. II. the broker-dealer with which the registered representative is affiliated. III. another registered representative working for the same broker-dealer. IV. the administrative assistant who directs calls to the registered representative and provides other services for the agent.

When selling shares of an investment company to a client, an agent must provide the client with I. the fund's prospectus, which provides information on any loads or other fees as well as historical return information. II. information about any breakpoints if it is a load fund along with an explanation of a letter of intent III. information regarding the investment adviser used by the fund IV. an explanation of the various loads and fees outlined in the fund's prospectus

George Geek is a computer programmer who tired of working for others and started his own company. He convinced forty investors that he could design software that would rival Microsoft, and sold them each a 10% partnership interest in his firm for $25,000. He designed and printed up the partnership certificates himself. George told the investors that he had a product that was on the verge of being marketable and that when it did-within the next two months-revenues would pour into the company, and he would begin paying dividends. He told them they could expect a 20% return on their money this year, with even higher returns in the years to come. As it turned out, George wasn't quite the programmer he thought he was, and he wasn't able to get all the bugs out of the program to make it marketable within the promised two months. Within a year, George had tired of the project and was too busy picking up chicks in his new Corvette when he wasn't on the island of St. Bart overseeing the construction of his new beach mansion-and picking up chicks. His activities, of course, were financed by the extremely generous "salary" he paid himself from the investors' monies. Under the Uniform Securities Act, do the investors have any civil claims against George?

Rich Writewell wants to begin publishing an independent weekly financial newsletter that will provide investment recommendations as well as other financial news items to the general public. Rich hopes that his newsletter will achieve nationwide circulation within a few months. Which of the following statements is true?

Registration by coordination is provided for by which of the following federal securities acts?

Stable Corporation registered a bond issue that it plans to offer for sale in the state with the Administrator. The bond has a par value of $1,000 and will pay interest of 7% a year, with the principal to be repaid in 5 years. The registration became effective on September 8^th. The registration is effective

Joe Treader is the owner of a small, state-registered investment advisory firm that is on the verge of becoming insolvent. One of his clients who has become like a mother to him is aware of his financial difficulties and has offered to sell off some of the assets that he manages for her and loan him the money to get him through this period of economic Uncertainty until he is able to get on his feet again. Can Joe take her up on her offer?

Bigwig, CEO of HiGrowth Corporation, meets with the president of BigFee Investment Bankers and arranges for BigFee to underwrite an Initial Public Offering (IPO) for the firm. When the IPO comes to market, GetErDone Broker-Dealers is part of the selling group, which handles the sale of the stock to the public. In this scenario, which party is the issuer?

Which of the following is a security as defined by the Uniform Securities Act (USA) ?

Which of the following would not be found in a tombstone advertisement?

Fly-By-Night Investment Advisers has closed its doors. Which of the following statements is true?

A "notice filing" refers to

Don is a state-registered agent with GetErDone Broker-Dealers. He has three other friends who are licensed agents-Huey, Dewey, and Louie. Huey is also an agent with GetErDone Broker-Dealers. Dewey is an agent with a different firm in the same city, CanDo Broker- Dealers. Louie works for a Broker-Dealer with an office just across the state line. Don can enter a commission-splitting agreement with

A tombstone advertisement is

Which of the following entities must sign a "consent to service of process," thereby allowing the Administrator to receive legal documents that are meant to be served to the entity in place of that entity? I. agents II. investment advisers III. investment adviser representatives IV. broker-dealers