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Series 63 practice questionmediumAdministrator Powers — Grounds for Denial

A training manager asks you to analyze the following USA issue. Treat the facts as a straight Series 63 application question. Which of the following is NOT a ground for denial of registration under the Uniform Securities Act?

  1. AThe applicant is insolvent
  2. BThe applicant lacks adequate qualifications or experience
  3. CThe applicant has been named in a civil lawsuit unrelated to securities✓ Correct answer
  4. DThe applicant has willfully violated the securities laws of another state
Explanation

Why C — The applicant has been named in a civil lawsuit unrelated to securities

Under USA Section 204, grounds for denial include insolvency, lack of qualifications, willful violations of securities laws, and felony or securities-related misdemeanor convictions. Being named in a civil lawsuit unrelated to securities is not, by itself, a basis for denial of registration. The extra setup is just noise; the controlling state-law rule stays the same.

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