Series 63 practice questionmediumLiability when Buyer Profited
A buyer no longer owns an illegally sold security. The resale proceeds plus income received exceed the consideration paid plus all statutory interest recoverable under Section 410. What additional monetary recovery is available under that damages formula?
- ANone, because the statutory calculation produces no positive damages✓ Correct answer
- BThe full purchase price
- CPunitive damages equal to the resale profit
- DAutomatic double damages
Explanation
Why A — None, because the statutory calculation produces no positive damages
When the buyer no longer owns the security, Section 410(a) measures damages using the statutory tender amount, reduced by income received and the value when the buyer disposed of the security, with the specified interest adjustments. If that calculation is not positive, Section 410 does not create an additional windfall.
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