Practice Quiz

FINRA Series 6

Category - Series 6

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Ms. Scatty is a registered representative with a well-known family of mutual funds. When selling one of the funds, she forgets to give her buyer a prospectus. Which of the following statements is true?
  1. Ms. Scatty can be held civilly liable under the Securities Act of 1933.
  2. Ms. Scatty can be held criminally liable under the Securities Act of 1933.
  3. Since mutual funds are not covered under the Securities Act of 1933, there is no liability in this instance.
  4. Both A and B are true statements.
Explanation
Answer: A - If Ms. Scatty forgets to give her buyer a prospectus when selling one of the funds, she can be held civilly liable under the Securities Act of 1933. Unless there was an intent to defraud, she is not subject to criminal penalties. The purchase and sale of mutual fund shares fall under the Securities Act of 1933.
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