An agent in State X sells an unregistered, non-exempt security to a client, believing in good faith that it was registered. Under the Uniform Securities Act, which of the following is TRUE regarding liability for fraud?

AThe agent may be subject to a civil suit by the client, regardless of intent.✓ Correct answer
BFraud charges require that the agent acted intentionally.
CStrict liability applies to all securities violations, including fraud.
DThe client may not recover damages since the agent acted in good faith.

Explanation

Why A — The agent may be subject to a civil suit by the client, regardless of intent.

Civil liability for selling unregistered, non-exempt securities does not require scienter (intent to deceive), so the agent may be liable even if acting in good faith (USA Sec. 410). Fraud, however, does require scienter, so B is incorrect. C is too broad; not all violations are strict liability. D is incorrect as good faith is not a defense here.

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