FINRA Uniform Securities Agent State Law Examination Sample Questions:

1. Which of the following persons falls under the definition of "broker-dealer," as defined by the Uniform Securities Act (USA)?

A) Juan is employed by TrustUs Corporation to sell shares of the firm's stock to the firm's employees and receives a commission on the shares he sells.
B) Marge is a loan officer at Treadwater Bank and Trust.
C) Michaela is employed by GetErDone broker-dealers and sells both exempt and non-exempt securities to GetErDone's clients.
D) MyTrades is a sole proprietorship owned by Nathan Newmoney, who has established the firm solely to make trades on his own account, thereby avoiding the commissions he would have to pay a middleman.

2. The Administrator may not introduce a stop order to deny, revoke, or suspend the effective registration of a security based on facts that were disclosed during the registration process unless he does so within

A) 60 days.
B) 30 days.
C) 45 days.
D) 1 year.

3. Nancy's Aunt Ethel died, making Nancy executrix of her estate. In going through Aunt Ethel's belongings, Nancy discovered some stock certificates that she learned had been issued by a small New Jersey firm that was still in business. The problem lay in the fact that Nancy's Aunt Ethel had moved from New Jersey to Florida years ago, and the stock is registered only in the state of New Jersey. Nancy herself is a resident of Massachusetts.
What does Nancy have to do in order to sell this stock?

A) Nancy will need to contact a broker-dealer licensed in the state of New Jersey to help her with the sale of this stock.
B) Nancy will need to contact a securities law firm in Florida to help her register the stock in the state of Florida.
C) Nancy can sell the stock without a problem as executrix of her aunt's estate.
D) Nancy will have to establish a mailing address in New Jersey before she can legally sell this stock.

4. Sam Shade had his agent's license revoked by the state of Washington for repeatedly making misleading claims about various investment to investors. He had had it with all the rain anyway and decided to move to the sunshine state of Florida. His brother-in-law was a computer whiz who made money on the side (more than his day job provided, in fact) by supplying illegal immigrants with official-looking documentation, including social security numbers. Sam Shade became Ian Creed in a few clicks of the mouse. As Ian Creed, Sam was hired by Sunny Investment Advisers, an investment adviser firm located in the Florida Keys, in a clerical role. As such, Sam/Ian had access to the confidential information of the firm's clients, which he and his brother-in-law utilized for the purpose of identity theft. Under the Uniform Securities Act guidelines, when Sam and his brother-in-law are caught in their illegal activities,

A) Sunny Investment Advisers will be subject to civil penalties for employing an individual whose license had been revoked by the Administrator of another state.
B) Sunny Investment Advisers will be subject to criminal prosecution for employing an individual whose license had been revoked by the Administrator of another state since it obviously did not use due diligence in hiring Ian Creed, aka Sam Shade.
C) Sunny Investment Advisers will be subject to both criminal prosecution and civil penalties for employing an individual whose license had been revoked by the Administrator of another state since it obviously did not use due diligence in hiring Ian Creed, aka Sam Shade.
D) Sunny Investment Advisers will not be held liable if it can prove that there was no way it could have or should have known of the revocation of Sam Shade's (aka Ian Creed) license.

5. An investment adviser may not

A) recommend a stock to a client that the adviser itself holds without disclosing to the client that the adviser owns the stock.
B) take a position-either long or short-in securities in which any of its clients have a position.
C) accept any kind of soft dollar compensation for using certain broker-dealers to execute trades on their clients' accounts.
D) also be registered as a broker-dealer in the state.

Solutions: