Series 79 practice questionmediumSEC Enforcement Actions
If the SEC obtains disgorgement of ill-gotten gains from a broker-dealer, what is the most accurate description?
- AThe firm must surrender profits earned through illegal conduct✓ Correct answer
- BThe firm’s registration is automatically revoked
- CThe individuals involved are barred from the industry
- DThe firm must issue a public apology
Explanation
Why A — The firm must surrender profits earned through illegal conduct
Disgorgement means surrendering profits from violations; it is not an automatic bar or registration revocation. The trap is confusing disgorgement with harsher enforcement actions.
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