Series 63 practice questionhardContribution — Settling Defendant
A broker-dealer and agent are jointly sued for a securities violation. The agent settles out of court and pays the full damages. Under the USA, what is the broker-dealer's potential liability to the agent?
- AThe broker-dealer may owe contribution to the agent✓ Correct answer
- BThe broker-dealer is relieved from any further liability
- CThe agent cannot demand contribution after settling
- DThe broker-dealer must pay indemnification only if ordered by the court
Explanation
Why A — The broker-dealer may owe contribution to the agent
Joint and several liability applies: if one party pays more than their share, they may seek contribution from co-defendants (USA 410(b)). The agent can pursue contribution from the broker-dealer despite settling.
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