Practice Quiz

FINRA Series 6

Category - Series 6

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Which of the following qualifies as an insider under the definition provided by the Securities Exchange Act of 1934?

I. a member of the board of directors of a firm
II. the vice-president of marketing of a firm
III. an investor who owns 5% of the voting stock of the firm
IV. the daughter of the CEO of a firm
  1. I and II only
  2. I, II, and III only
  3. I, II, and IV only
  4. I, II, III, and IV
Explanation
Answer: C - Selections I, II, and IV all describe individuals who qualify as insiders under the definition provided by the Securities Exchange Act of 1934. An insider is any director or officer of the firm or any member of their immediate family. An investor who owns 10% of the voting stock of the firm and his immediate family members are also classified as insiders; an investor who owns 5% of the voting stock does not fall within the guidelines of the definition.
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