Series 63 practice questionhardCivil Liabilities — Joint and Several Liability
During a registration workshop, the instructor adds this setup first. Focus on what changes once the scenario is viewed through state law. An agent and his employing broker-dealer both participated in a fraudulent securities sale. Under the USA, the client may:
- ARecover the full amount of damages from either or both parties under joint and several liability✓ Correct answer
- BOnly recover from the broker-dealer as the supervising entity
- COnly recover from the agent who made the sale
- DRecover only a proportional share of damages from each party
Explanation
Why A — Recover the full amount of damages from either or both parties under joint and several liability
Under USA Section 410(b), persons who materially aid in a fraudulent sale are jointly and severally liable. This means the buyer can recover the full amount from either the agent, the broker-dealer, or both. The parties who are found liable may then seek contribution from each other. This version tests the same concept with a different fact pattern wrapper.
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