FINRA Uniform Securities Agent State Law Examination Sample Questions:

1. Bob Gogetter is an agent with CanDo Broker-Dealers. One of Bob's clients is out of the country and cannot be contacted. The client holds some stock in a company that just released some information that should make its stock price soar. Bob knows that this client would probably want to increase his holdings, so Bob opens a margin account for his client and borrows the money to buy shares. As it happened, the stock price did soar, and Bob's client earned a sizeable profit.
Is Bob in violation of any securities acts?

A) No, but only because Bob's client profited from Bob's intervention. If the stock had declined in.
B) Yes. Bob is guilty of prohibited practice of churning.
C) No. Bob has a fiduciary responsibility to his client to act in his best interest, and Bob knew this.
D) Yes. It is against the law for an agent to open a margin account for a client without the client's.

2. Investment Adviser Foo Lish, LLC has begun serving as a custodian of its clients' assets. Foo Lish, LLC must now
I. file a new U-5 form with the Administrator.
II. meet higher net capital requirements than before.
III. file an updated Form ADV with the Administrator.
IV. pay a CPA to do an annual unannounced audit of the firm.

A) II and III only
B) I and II only
C) I, II, III, and IV
D) II, III, and IV only

3. Until yesterday Maddie was a registered agent employed by the broker-dealer, QuikDeals. Yesterday afternoon, issues that had been brewing between her and another employee of the firm came to a head, and Maddie impulsively quit her job.
At this point,

A) Maddie has sixty days to find a job with another broker-dealer, or she will need to file a new registration application.
B) Maddie has thirty days to find a job with another broker-dealer, or she will need to file a new registration application.
C) Maddie is required to call all of her clients at QuikDeals to inform them she is no longer employed there.
D) Maddie will have to file a new application for registration with the Administrator upon finding employment with another broker-dealer since she is no longer considered to be a registered agent by the state.

4. Which of the following orders can an Administrator issue without providing prior notice?

A) license suspension
B) cease and desist
C) license revocation
D) license denial

5. Newbie Corporation is considering the possibility of an interstate initial public offering (IPO) of its stock. In the initial meetings with BigFee Investment Bankers, Newbie has learned that the underwriting spread will be
15%. Although the actual offering price won't be set until Newbie's registration statement is approved by the SEC, BigFee has indicated that the offer price will probably be between $3 and $4 a share and that the stock will initially be listed on the OTC Bulletin Board.
What methods for state registration does Newbie have available?
I. registration by coordination
II. registration by notification
III. registration by qualification

A) Method I only
B) Newbie may elect to register by any one of the above methods although registration by qualification would be the most burdensome choice.
C) Methods I and III only
D) Method II only

Solutions: