As a candidate preparing for a state securities exam – Series 63, Series 65, or Series 66 – it is important to understand and demonstrate how securities professionals can act ethically, honestly, and avoid engaging in fraud.
Each year, the North American Securities Administrators Association (NASAA), publishes data relating to securities fraud, investor protection, and enforcement actions taking during the previous year. NASAA recently released the 2015 Report on 2014 Data, it is available here. From a test-taker’s perspective, this report offers a chance to review the civil and criminal penalties should a securities professional be subject to disciplinary actions as well as offer insight into where state securities administrators are directing their regulatory and investigatory efforts.
For review, here are some Series 63, Series 65 and Series 66 jurisdictional and disciplinary questions:
Q: What civil penalties are available under the USA?
A: Under the USA an investor can be made whole – including costs and expenses – if an investor is sold securities or advice in violation of the law. In 2014 securities professionals were require to return more than $440 million to aggrieved investors.
Q: What criminal penalties are available under the USA?
A: In addition to civil monetary penalties, a state can bring criminal action against violators. The criminal sanctions can include a $5,000 fine and up to 3 years in state jail. In 2014 state securities regulators brought criminal actions that resulted over 1,600 years of sentenced jail time.
Understanding the rules, regulations, and laws governing securities professionals are essential to both passing the Series 63, Series 65, or Series 66 exam and a successful and prosperous career.