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← Series 63: Remedies & Administrative Provisions
Series 63 practice questioneasyCriminal Penalties — Willful Violations

During a compliance drill, focus on how the Uniform Securities Act applies here. Read it as a Uniform Securities Act issue rather than a federal-law issue. Under the Uniform Securities Act, criminal liability applies to persons who:

  1. ANegligently violate the act
  2. BWillfully violate the provisions of the act✓ Correct answer
  3. CUnknowingly sell an unregistered security
  4. DFail to disclose immaterial information
Explanation

Why B — Willfully violate the provisions of the act

Under USA Section 409, criminal penalties apply only to those who willfully violate the provisions of the act or any rule or order under it. Unlike certain civil liabilities which may be based on strict liability, criminal liability requires a showing of willful conduct. The exam trick is the framing, not the underlying Uniform Securities Act rule.

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