Which of the following agencies is responsible for administering the Investment Advisor's Act of 1940?
Answer(s): C
The SEC is charged with governing the Investment Advisor's Act or any rule that falls under the act. Within that governance, the SEC is responsible for determining whether the Act or any of its rules have been, or are about to be, violated
John Dormer is an investment advisor for Land Star Capital Investments. His wife, Sheryl, is also an advisor at the same firm. Their 10th wedding anniversary is coming up and Sheryl wants to take John on a dream wind-surfing holiday in Aruba. In order to fund the trip, Sheryl has collaborated with a friend outside of the firm and is selling interests in a promising start-up to wealthy colleagues. This practice is known as:
Answer(s): D
This practice is known as selling away and is considered fraudulent activity under the Uniform Securities Act. An agent who is executing transactions that do not appear on their broker-dealer books is said to be "selling away"
Jakes and Johns Oil & Gas Inc intends to register and offer securities in Delaware and in New Jersey. The registration statement that J&J will file in its headquarters state of Delaware must indicate:
When offering securities, the issuer must file a registration statement with the state administrator under the Uniform Securities Act. In addition to revealing its intent to file in another state and the amount of securities the company plans to offer, it is necessary to report any adverse ruling connected to the offering, which may have been made by the Securities and Exchange Commission (SEC) or a state regulatory authority or court
Which of the following would require disclosure of the financial condition of an investment advisor?
Answer(s): E
If any financial condition of an investment advisor could prevent that advisor from making client commitments, that condition must be disclosed if that advisor is responsible for any of the options listed
The purpose of self-regulatory agencies such as the National Association of Securities Dealers (NASD) and the Municipal Securities Rulemaking Board (MSRB) is:
The NASD and the MSRB are self-regulatory agencies whose purpose is to promote fair and equitable trade practices in the securities industry. The SEC is empowered to investigate violations of the national securities exchanges and the self-regulatory agencies
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