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Series 63: Regulation of Securities & Issuers
Series 63 practice questionmediumEscrow and Consideration

Which of the following is LEAST likely to result in an escrow requirement by a state Administrator for securities issued in a registration by qualification?

  1. AConsideration was received in the form of equipment from a company officer.
  2. BThe shares were issued to an underwriter for cash at market value.✓ Correct answer
  3. CThe securities were issued to promoters prior to the public offering for services rendered.
  4. DThe administrator suspects that property for shares was overvalued.
Explanation

Why BThe shares were issued to an underwriter for cash at market value.

Receiving cash at market value from an underwriter does not usually trigger an escrow. Non-cash consideration or related party transactions often do (USA Sec. 305).

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