Series 63 practice questionmediumCivil Liabilities — Buyer's Remedies for Fraud
A client purchased a security based on material misrepresentations made by her agent. If the client still owns the security, she may:
- ASue for rescission and tender the security back to the seller in exchange for the purchase price plus interest✓ Correct answer
- BKeep the security and sue for the full purchase price as additional damages
- COnly file a complaint with the Administrator and wait for an enforcement action
- DSue only the broker-dealer, not the individual agent
Explanation
Why A — Sue for rescission and tender the security back to the seller in exchange for the purchase price plus interest
Under USA Section 410(a), if the buyer still owns the security, the remedy is rescission — the buyer tenders the security back to the seller and recovers the consideration paid plus interest, minus any income received. The buyer cannot keep the security and also collect the full purchase price.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,051+ Series 63 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related Remedies & Administrative Provisions questions
- Which statement correctly describes criminal penalties in the NASAA-updated 1956 Uniform Securities Act?
- Which of the following is LEAST likely to be subject to criminal penalties under the USA?
- A new agent claims ignorance of the USA when accused of a willful violation. Which is TRUE regarding criminal penalties?
- A state Administrator permanently bars an agent from registration for a willful violation. Which of the following is…
- An individual is prosecuted in both federal and state court for the same willful securities violation under the USA and…
- Which of the following could NOT be imposed as a criminal penalty on a broker-dealer firm under the USA?
- A willful violation occurred in 2012 but was not discovered until 2020. Under the USA, can criminal prosecution still…
- If a person is convicted in federal court of securities fraud and also violated the USA, which of the following is TRUE?