Series 63 practice questionmediumOmission vs. Commission: Materiality
Which omission is LEAST likely to be considered fraudulent under the Uniform Securities Act?
- AOmitting news of a pending bankruptcy filing when recommending shares.
- BOmitting that the issuer’s CEO has resigned for undisclosed reasons.
- COmitting a recent change in the issuer’s auditor.
- DOmitting a disclosed, resolved parking violation by the issuer’s CFO.✓ Correct answer
Explanation
Why D — Omitting a disclosed, resolved parking violation by the issuer’s CFO.
Material omissions are fraudulent; omitting irrelevant facts (like a resolved parking ticket, D) is not material and thus not considered fraud (USA Sec. 101(2)). A, B, and C refer to potentially material omissions.
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