SIE practice questionhardStatutory Disqualification
A person is convicted of misdemeanor theft (not securities-related) and receives a sentence of less than one year. Is this person subject to statutory disqualification?
- ANo, only securities-related convictions matter
- BNo, only felony convictions trigger statutory disqualification
- CYes, any criminal conviction triggers statutory disqualification
- DYes, because any conviction involving theft, misappropriation, or fraud — even a misdemeanor — can trigger statutory disqualification✓ Correct answer
Explanation
Why D — Yes, because any conviction involving theft, misappropriation, or fraud — even a misdemeanor — can trigger statutory disqualification
Statutory disqualification is broader than many people think. Under Section 3(a)(39) of the Securities Exchange Act, a person is subject to SD if convicted of ANY crime (felony or misdemeanor) that involves the purchase or sale of securities, making false filings, or involves theft, larceny, robbery, extortion, forgery, bribery, fraud, or misappropriation of funds. So even a misdemeanor theft conviction can trigger SD, regardless of whether it was securities-related.
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