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← Series 63: Remedies & Administrative Provisions
Series 63 practice questionmediumCivil Liability

A client buys an unregistered, nonexempt security. What must the client establish for the seller-liability provision of USA Section 410(a)(1) to apply?

  1. AThat the seller offered or sold the security in violation of an applicable registration provision✓ Correct answer
  2. BThat the seller specifically intended to defraud the client
  3. CThat the Administrator first investigated the transaction
  4. DThat the security became completely worthless
Explanation

Why A — That the seller offered or sold the security in violation of an applicable registration provision

A sale of an unregistered, nonexempt security in violation of the applicable registration provisions supports the buyer's Section 410 remedy without requiring proof of intent, an Administrator investigation, or a total loss.

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