Mr. and Mrs. Cleaver are nearing retirement and have made an appointment with Mr. Eddie, an investment adviser representative who works for Haskell Investment Advisers, to get advice on how they can better structure their investments to meet their retirement goals. Their son, Theodore, who has recently graduated college and has a great job as a software writer for a video game company, accompanies them. Mr. Eddie explains that the main goal of any plan is diversification and recommends that Mr. and Mrs. Cleaver spread their investment monies equally among six load mutual funds that Mr. Eddie can sell them. He suggests that Theodore follow suit and invest any monies he has equally among the same ten funds.
Has Mr. Eddie done anything wrong?
on No: 239
A tombstone advertisement is
Which of the following is not considered to be a person, as defined by the Uniform Securities Act?
Iggy recently started his own company. He soon discovered it required more cash to keep it going than he had anticipated. He ran an ad in the local paper for investors and got a response. He found a template for a promissory note on the internet, filled in the requisite information specific to the agreement he and the investor had worked out, and printed it out. On it, he promised to make monthly interest payments of 2% on the loan and to repay the principal amount at the end of 18 months. A few months after the arrangement, Iggy read an article in a small business publication that indicated that promissory notes had to be registered with the state unless they were sold in an exempt transaction, such as one enacted with a financial institution, prior to being offered for sale. The article indicated that a seller who had sold an unregistered note in error could remedy the situation by sending the buyer a formal offer to buy the security back, with interest. Iggy turned to the computer once again, found a form that could be used for a formal offer of rescission, filled it out, and sent it to the investor. Having done this,
Constance is an investment adviser representative. She told one of her clients that he should put at least 15% of his investment monies in a U.S. government bond mutual fund.
She explained that she believed that he required this percentage to meet his liquidity needs, and U.S. government bond funds are risk-free. A few months later, the client needed to sell some of his fund shares in order to pay some medical bills and was surprised to discover that he lost money on the sale because the net asset value of the fund had dropped.
Was Constance guilty of any securities violations?
Which of the following scenarios would not be considered a “sale,” as defined by the Uniform Securities Act (USA)?
I. Yoshito owned shares of Minnow Corporation and received shares of Whale Corporation from Whale when it merged with Minnow.
II. Olivia’s uncle, an agent with SecureMoney Brokers, sold Olivia ten call options on the stock of Microsoft.
III. Hans purchased a bond of Indebted Corporation that had detachable warrants and subsequently sold the warrants.
IV. Tom pledged some shares of stock he owned personally to secure a business loan for his company.
Which of the following describes an investment adviser that is not required to register with the state Administrator?
The state official who has regulatory authority over the securities industry within the state is known as the
Under NASAA Model Rules, it is permissible for the registered representative of a broker-dealer to split his or her commission with
I. a client.
II. the broker-dealer with which the registered representative is affiliated.
III. another registered representative working for the same broker-dealer.
IV. the administrative assistant who directs calls to the registered representative and provides other services for the agent.
Shady Corporation’s executives are concerned over the firm’s steadily declining stock price and decide to do something about it. They each decide to make significantly large purchases of their firm’s stock in order to stabilize and hopefully even to drive up its price, reasoning that they can sell the stock for the higher price down the road and profit from the transaction. You are a broker-dealer for the firm’s executives.
Are Shady’s executives planning to do anything illegal?
