Series 63 practice questionmediumFederal/State Coordination — State Antifraud Authority
A state Administrator discovers that an issuer of a federal covered security has been making materially false statements to investors in the state. Can the Administrator take action?
- ANo, because the security is federal covered and the state has no jurisdiction
- BYes, but only with prior SEC approval
- CYes, because the state retains antifraud authority over all securities, including federal covered securities✓ Correct answer
- DNo, only the SEC can take action against federal covered securities
Explanation
Why C — Yes, because the state retains antifraud authority over all securities, including federal covered securities
States retain antifraud authority and can enforce antifraud provisions against federal covered securities independently of the SEC.
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