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← Series 63: Remedies & Administrative Provisions
Series 63 practice questionmediumScienter and Fraud Investigations

A junior banker at William Blair omits to inform a client about an ongoing SEC investigation into a recommended issuer, which would have influenced the client’s decision. The omission was unintentional. Which is MOST likely under the Uniform Securities Act?

  1. AThe agent is not liable for fraud due to lack of scienter.
  2. BThe agent is strictly liable for fraud.
  3. CThe agent may be civilly liable for omission, but not criminally liable for fraud.✓ Correct answer
  4. DThe agent faces both civil and criminal liability for fraud.
Explanation

Why C — The agent may be civilly liable for omission, but not criminally liable for fraud.

Fraud under the USA requires scienter (intent), so unintentional omission does not support criminal fraud liability but may create civil liability for failure to disclose a material fact (USA Sec. 101(2), 410(a)).

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