Series 63 practice questionhardStatute of Limitations—Discovery Nuances
A junior banker’s fraudulent act was not discovered until 4 years after the sale of securities. Under the USA, which of the following is TRUE regarding the ability to bring a civil suit?
- AA suit can be brought within 2 years of discovery, regardless of the time since the violation.
- BA suit cannot be brought because more than 3 years have elapsed since the sale.✓ Correct answer
- CA suit can be brought anytime the fraud is discovered.
- DA criminal suit may still be brought within 5 years of the violation.
Explanation
Why B — A suit cannot be brought because more than 3 years have elapsed since the sale.
Under the Uniform Securities Act, a civil action must be brought within the applicable limitations period, including an outside limit of three years after the sale. Because the fraud was not discovered until four years after the sale, a civil suit is barred; choice D discusses criminal prosecution, not the civil suit asked about here.
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