Lana is registered as a limited representative and is employed by Everything Investments. Her
duties include selling mutual funds and variable contracts products to the firm's clients. She has
been particularly successful in selling variable contracts offered by OneLife insurance company.
As a "thank you" for her hard work, OneLife has offered her a ticket to an upcoming play at a
local dinner theatre.
Given this scenario, which of the following statements applies?
A. Lana will have to pass on the offer. Lana is prohibited from receiving compensation from
anyone other than Everything Investments.
B. Lana can accept the offer as long as Everything agrees to it and as long as it is not an
ongoing thing and/or preconditioned on her achieving a specified sales target.
C. Lana can accept the offer without Everything's approval in this instance since the offer does
not involve cash.
D. Lana wil have to pass on the offer. She is permitted to receive only cash compensation in an
amount not to exceed $100 from an entity other than Everything, and then only with
Lana can accept the dinner theatre ticket offer as long as Everything agrees to it and as long as
it is not an ongoing thing and/or preconditioned on her achieving a specified sales target.
Occasional meals, tickets to the theatre, a sporting event, or a similar entertainment venue may
be accepted as long as they aren't too excessive or too frequent and as long as the member
firm with whom the representative is employed is agreeable.
Which of the following qualifies as an insider under the definition provided by the Securities
Exchange Act of 1934?
I). a member of the board of directors of a firm
II). the vice-president of marketing of a firm
III). an investor who owns 5% of the voting stock of the firm
IV). the daughter of the CEO of a firm
A. I and II only
B. I, II, and III only
C. I, II, and IV only
D. I, II, III, and IV
Selections I, II, and IV all describe individuals who qualify as insiders under the definition
provided by the Securities Exchange Act of 1934. An insider is any director or officer of the firm
or any member of their immediate family. An investor who owns 10% of the voting stock of the
firm and his immediate family members are also classified as insiders; an investor who owns
5% of the voting stock does not fall within the guidelines of the definition.