Series 63 practice questionhardAntifraud jurisdiction—cross-border
A junior banker in IL assists with a public offering of federal covered securities by a CA company. Untrue statements are made to investors in NY. Which state(s) may pursue antifraud actions?
- AOnly NY, as the investors reside there.
- BAny state with investors harmed or where misstatements occurred.✓ Correct answer
- COnly CA, as the issuer's home.
- DNo state may pursue, only the SEC has authority due to federal coverage.
Explanation
Why B — Any state with investors harmed or where misstatements occurred.
NSMIA preserves state antifraud jurisdiction (USA 203A); any state with a connection—issuer, agent, or victim—may act. SEC authority does NOT preempt state antifraud enforcement.
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