Series 79 practice questionhardSEC Enforcement Actions
A registered representative is found liable for egregious securities fraud. Which scenario most accurately reflects when the SEC might pursue criminal proceedings, not just civil penalties?
- AWhen a client sues for restitution in small claims court
- BWhen evidence shows willful violations involving fraudulent intent and interstate commerce✓ Correct answer
- CWhen the representative fails to file an annual compliance review
- DWhen the representative fails to submit trade confirmations on time
Explanation
Why B — When evidence shows willful violations involving fraudulent intent and interstate commerce
Criminal proceedings require willful violations and intent to defraud, especially when interstate commerce is involved. The trap is assuming minor or procedural violations rise to the level of criminal prosecution.
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