Chapter 18 Practice Question Answers
- 1. Answer: B. FINRA must release information to the public about a disciplinary complaint involving an allegation of any violation of a statute, rule, or regulation under FINRA’s jurisdiction. It must also release information involving any decision that imposes a suspension or expulsion of a member firm or associated person.
- 2. Answer C. For claims involving a customer, the majority of arbitrators must be public arbitrators. A panel will consist of one arbitrator for claims of $50,000 or less. Claims between $50,000 and $100,000 may have one arbitrator, unless the parties agree to have three in an industry dispute, or in a customer dispute, the customer prefers three. Claims above $100,000 may have three arbitrators, unless the customer (or the industry disputants) prefers to have one.
- 3. Answer: D. Mediation is voluntary and available when both parties to a dispute agree to it. Parties may choose it instead of arbitration, or they may submit to mediation within an arbitration process to resolve any aspect of an arbitrated dispute. The disputing parties may select a mediator from a list provided by the Director of Mediation or from another source of their own choosing.
- 4. Answer: B. Alliance must file a Form U5 with FINRA and send Randall a copy within 30 days of his termination. Because this is a partial termination, Alliance does not have to state the reason they let him go. Once Randall gets a new job, it is Randall’s responsibility to provide his new employer with a copy of his Form U5.
- 5. Answer: C. Among the information disclosed on Form U4 are the applicant’s residential, employment, and criminal histories and financial disclosures, such as prior bankruptcies.
- 6. Answer: D. With the passage of Dodd-Frank in 2010, investment advisers handling assets between $25 million and $100 million (mid-sized firms) were required to swit