Series 63 practice questionhardStop Order Grounds
All of the following are valid grounds for an Administrator's stop order EXCEPT:
- AThe issuer’s methods of business are unfair or inequitable.
- BThe fee paid to a promoter is excessive.
- CThe company is subject to a pending criminal proceeding unrelated to securities.✓ Correct answer
- DThe registration statement is incomplete in a material respect.
Explanation
Why C — The company is subject to a pending criminal proceeding unrelated to securities.
Pending criminal proceedings must relate to securities (USA Sec. 306). Unrelated criminal matters are not grounds for a stop order. Other options are all valid grounds.
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