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← Series 63: Remedies & Administrative Provisions
Series 63 practice questioneasyAiding and Abetting

A broker-dealer principal knowingly and materially aids an agent's fraudulent sale. What civil-liability rule is most directly relevant under the USA?

  1. AJoint and several liability under Section 410(c), subject to the statutory lack-of-knowledge and reasonable-care defense✓ Correct answer
  2. BAutomatic strict liability for every supervisor
  3. CNo liability unless the principal personally spoke to the buyer
  4. DAutomatic criminal liability without proof of willfulness
Explanation

Why A — Joint and several liability under Section 410(c), subject to the statutory lack-of-knowledge and reasonable-care defense

USA Section 410(c) imposes joint and several liability on specified controlling and materially aiding persons unless they prove that they did not know and, exercising reasonable care, could not have known the relevant facts. Section 410(f) is the limitations provision, not an aiding-and-abetting provision.

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