Lucky the Banker mascotLTB
Series 63: Regulation of Broker-Dealers & Agents
Series 63 practice questionmediumAdministrator's authority over fraud in federal covered securities

An agent in State A sells shares of a federal covered mutual fund using materially misleading statements. What is the Administrator's MOST LIKELY course of action?

  1. ABring anti-fraud enforcement against the agent✓ Correct answer
  2. BRequire registration of the mutual fund shares
  3. CForce the SEC to investigate the issuer
  4. DBan all sales of the mutual fund in State A
Explanation

Why ABring anti-fraud enforcement against the agent

States retain anti-fraud enforcement powers over all securities, including federal covered securities (USA Sec 402(b)). Registration or banning fund sales is not permitted except in cases of fraud, and the Administrator cannot order the SEC to investigate.

Turn it into reps

Reading one answer is not the same as being ready

Lucky the Banker is a free practice app with 1,051+ Series 63 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.

Spot an error in this question or explanation? Tell us — we fix these fast.

Related Regulation of Broker-Dealers & Agents questions