Series 63 practice questionmediumDamages — Income Offset
A client receives both interest and dividends from an illegal securities sale. Under USA civil liability rules, which of the following best describes how these payments affect damages awarded?
- AThey are subtracted from the total recovery✓ Correct answer
- BThey are ignored in the calculation
- CThey are added to statutory interest owed
- DThey are paid separately by the defendant
Explanation
Why A — They are subtracted from the total recovery
Any income (interest, dividends) received from the security is subtracted from the damages (USA 410(a)), to prevent a windfall to the purchaser.
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