Series 79 practice questionhardSEC Enforcement Actions
Which facts would most likely cause the SEC to refer a securities-fraud matter to the Department of Justice for possible criminal prosecution?
- 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
The SEC brings civil and administrative actions; DOJ prosecutes criminal securities cases. Evidence of a willful fraudulent scheme can support a criminal referral.
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