Series 63 practice questionmediumState Authority
A federal covered adviser is investigated by a state's securities administrator for fraud. Which is true under the USA?
- AThe administrator may demand withdrawal of notice filing
- BThe administrator may take enforcement actions despite federal preemption✓ Correct answer
- CThe administrator may require state registration
- DThe administrator must defer entirely to the SEC
Explanation
Why B — The administrator may take enforcement actions despite federal preemption
The USA allows state administrators to enforce anti-fraud provisions against all advisers, including federal covered advisers (USA Sec. 406). A and C are preempted; D is overly restrictive.
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