Series 63 practice questioneasyCivil Liability
If an agent sells an unregistered nonexempt security in a state, the agent is subject to which of the following civil liabilities under the USA?
- AThe buyer may sue for rescission and recover the purchase price plus interest✓ Correct answer
- BThe Administrator must revoke the agent's license
- CThe buyer may sue for punitive damages only
- DNo liability exists if the buyer profited on the sale
Explanation
Why A — The buyer may sue for rescission and recover the purchase price plus interest
Section 410 provides buyers the right to rescission and recovery of the purchase price plus interest for unlawful sales. The Administrator may take action, but revocation isn’t mandatory. Punitive damages are not specified; liability exists regardless of buyer profit.
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