Series 63 practice questionmediumOmission vs. Misstatement
Which of the following best describes the difference between an omission and a misstatement under USA Section 501?
- ABoth require intent to deceive
- BMisstatements provide false information; omissions leave out material facts✓ Correct answer
- COmissions are not prohibited if unintentional
- DOnly misstatements are subject to antifraud rules
Explanation
Why B — Misstatements provide false information; omissions leave out material facts
A misstatement is a false statement, while an omission is failing to disclose material facts. Both are prohibited (Section 501); intent (A, C) is not required for omission. Both are covered (D).
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