Series 63 practice questionmediumCriminal Penalties—Willful vs. Negligent Acts
A registered investment adviser’s employee negligently fails to disclose a material fact to a client. Under the USA, the employee:
- AMay be subject to criminal penalties
- BMay be subject to civil liability, but not criminal penalties✓ Correct answer
- CWill be automatically barred from the industry
- DIs not subject to any penalties
Explanation
Why B — May be subject to civil liability, but not criminal penalties
Criminal penalties require willful action. Negligence may result in civil liability but not criminal prosecution (Section 409).
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