Exercise
Answer TRUE or FALSE
1. _____ If a person does not respond to an administrator’s request for information, the administrator can rescind the person.
2. _____ An administrator can issue a cease and desist order without requesting a court injunction.
3. _____ An administrator has the authority to imprison professionals who violate securities regulations.
4. _____ The statute of limitations for civil violations is three years from the date of a violation itself or two years from the date an investor discovers that a violation took place.
5. _____ In the case of a final order that is vacated, all charges and penalties are dropped.
Answers
1. False. In such a case, the administrator can hold the person in contumacy. Only an issuer or securities professional can offer rescission.
2. True. Issuing a cease and desist order is an action that an administrator can take on its own.
3. False. Although an administrator can request courts and law enforcement to pursue appropriate action against violators, it cannot actually arrest or imprison anyone.
4. True. Criminal violations have a statute of limitations of five years; civil violations can be prosecuted within three years of the date that the violation occurred or within two years of the date that the investor discovered a violation took place.
5. True. A vacated final order means that all charges have been dropped.
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SUMMARY TABLE Administrative Jurisdiction |
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What is an administrator allowed to do? |
What is an administrator not allowed to do? |
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• Initiate investigations of potential securities violations involving residents of its state or issues transacted in its state • Collect evidence for investigations • Issue and enforce subpoenas (including at the request of other state | |