Series 63 practice questionmediumKnowledge and Intent in Fraud Cases
During a client presentation, a junior banker intentionally withholds negative information about a recommended security. The client suffers a loss. What MUST be true for the state to pursue criminal fraud charges?
- AThe client must prove damages.
- BThe omission must have been intentional.✓ Correct answer
- CThe recommendation must have been unsolicited.
- DThe security must be unregistered.
Explanation
Why B — The omission must have been intentional.
Criminal fraud under the USA requires scienter—intent to deceive (USA Sec. 409). Client damages are necessary for civil liability but not for criminal charges; registration and solicitation status are irrelevant.
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