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Series 63: Regulation of Securities & Issuers
Series 63 practice questionmediumStop Order Grounds

Under the USA, which of the following is NOT grounds for a state Administrator to issue a stop order against a security registration?

  1. AFailure to pay registration fees
  2. BA registration statement containing a false statement of material fact
  3. CThe issuer's business model is considered too risky✓ Correct answer
  4. DUnreasonable commissions paid to underwriters
Explanation

Why CThe issuer's business model is considered too risky

The riskiness of the business is not a stop order ground (USA Section 306). Material misstatements, unpaid fees, and excessive commissions are.

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