Series 63 practice questionmediumStop Orders — Registration Statement Defects
Which finding is a statutory ground for an Administrator to issue a stop order against a securities registration statement?
- AThe registration statement is materially incomplete or contains a material false or misleading statement✓ Correct answer
- BThe issuer declined to guarantee investors a profit
- CThe security's market price fell after an unrelated offering
- DThe issuer selected a broker-dealer the Administrator does not personally prefer
Explanation
Why A — The registration statement is materially incomplete or contains a material false or misleading statement
A materially false, misleading, or incomplete registration statement is a statutory stop-order ground when the required public-interest and procedural findings are made. Ordinary market movement or the absence of a profit guarantee is not such a ground.
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