Chapter 6 - Remedies and Administrative Provisions Flashcards Preview

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Flashcards in Chapter 6 - Remedies and Administrative Provisions Deck (10):

The state admin is charged with the following duties

- initiate investigations of potential securities violations involving residents of their state or transactions in their state
- collect evidence
- issue subpoenas requiring people to testify
- request courts and law enforcement to pursue appropriate action
- communicate and publish investigative and hearing results to the public
- make, amend, or rescind orders and rules
- administer oaths and affirmations
- require the production of documents and records
- issue and apply to enforce the subpoenas


If a person fails to follow admin's directions/orders, they may

- hold person in contumacy
- order person to appear before admin and testify
- request that an appropriate court issue an injunction
- issue a cease and desist order
- bring an action before court to enforce compliance
- issue an order revoking, denying, suspending or canceling a registration or license (need to give prior notice to all interested parties in this case)


Orders that are sent by the admin are effective ______



A request for a hearing must be granted within ______

15 days


For criminal violations, must....

have been intentional and must be brought before a court within 5 years of the action


Total civil penalties that a firm could be required to pay are equal to one or more of the following, minus any income earned on the investments in question:

- fees and commissions previously paid
- amount paid for the security
- amount paid for investment advise
- amount lost due to investment advise
- interest that would have been otherwise earned
- court and legal costs


Statute of limitations for a civil case is either

- 2 years from the date the client discovers the violation or
- 3 years from the date of the violation itself, whichever occurs first


Recission is when

a BD, adviser, issuer offers to give the client back their money with interest to avoid a civil suit. If not accepted in 30 days then considered denied.


An admin must also issue the "final order" (basically the final verdict) on an issue. The final order may be one of the following

- vacated (charges or penalties are dropped)
- finalized (charges and penalties are confirmed)
- modified (charges and penalties changed)


An "interpretive opinion" is when an admin

cuts off the investigation and does not pursue it further