Series 63 practice questioneasyAdministrator's investigative authority across state lines
An Administrator in State A is investigating a broker-dealer registered in State B that has clients in State A. What is the Administrator's authority regarding issuing subpoenas to parties in State B?
- AThe Administrator may issue subpoenas to parties in State B if the investigation concerns activity affecting State A.✓ Correct answer
- BThe Administrator may not issue subpoenas beyond State A under any circumstances.
- CThe Administrator must first get permission from State B's courts to issue subpoenas in State B.
- DThe Administrator may only issue subpoenas to parties physically located in State A.
Explanation
Why A — The Administrator may issue subpoenas to parties in State B if the investigation concerns activity affecting State A.
Under Section 407 of the USA, Administrators can issue subpoenas to parties inside or outside their state if the investigation is relevant to their state's interests. B and D incorrectly limit the Administrator's authority, and C is not a requirement under the Act.
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