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Series 63: Remedies & Administrative Provisions
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?

  1. AThe broker-dealer may owe contribution to the agent✓ Correct answer
  2. BThe broker-dealer is relieved from any further liability
  3. CThe agent cannot demand contribution after settling
  4. DThe broker-dealer must pay indemnification only if ordered by the court
Explanation

Why AThe 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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