Series 63 Disciplinary Actions Quick Reference
- April 1, 2025
- Posted by: 'FINRA Exam Mastery'
- Category: Finance
Series 63 Disciplinary Actions – Quick Reference Guide
Understanding the disciplinary actions under the Uniform Securities Act (USA) is crucial for Series 63 exam preparation. This guide outlines the key enforcement mechanisms, penalties, and procedures that state administrators may employ to maintain the integrity of the securities industry.
⚖️ Administrative Actions by State Administrators
State securities administrators have the authority to take administrative actions against individuals or firms for violations of securities laws. These actions include:
- Denial of Registration: Refusing to grant registration to an applicant.Exam Prep Pro
- Suspension of Registration: Temporarily halting a registrant’s ability to operate.
- Revocation of Registration: Permanently removing a registrant’s license to operate.
- Cease and Desist Orders: Mandating an individual or firm to stop engaging in specific activities.
- Censure: Issuing a formal statement of disapproval.
Grounds for Administrative Actions include:
- Providing false or misleading information on registration applications.Exam Prep Pro+1Exam Prep Pro+1
- Conviction of any felony or securities-related misdemeanor within the past 10 years.Exam Prep Pro
- Being subject to an injunction or restraining order involving securities or commodities.
- Engaging in dishonest or unethical practices in the securities business.
- Failure to supervise employees adequately.
- Insolvency or financial instability.Exam Prep Pro+1FINRA+1
- Failure to pay required fees.
Due Process Requirements:
Before taking administrative action, the administrator must:
- Provide appropriate prior notice to the affected party.Exam Prep Pro
- Offer an opportunity for a hearing.Exam Prep Pro
- Deliver a written statement of findings and conclusions.
🏛️ Civil Liabilities
Individuals or firms may face civil liabilities for violations such as:
- Selling unregistered, non-exempt securities.
- Omitting or misrepresenting material facts in connection with a securities transaction.
- Engaging in fraudulent or deceitful practices.
Remedies for Investors:
Investors may be entitled to:
- Rescission of the transaction (return of the investment).
- Recovery of the purchase price plus interest, minus any income received.
- Court costs and reasonable attorney’s fees.
Statute of Limitations:
- Civil actions must be initiated within 3 years of the violation or 2 years after discovery of the violation, whichever comes first.
🚨 Criminal Penalties
Criminal violations under the USA can result in:
- Fines of up to $5,000 per violation.
- Imprisonment for up to 3 years.
Statute of Limitations:
- Criminal proceedings must be initiated within 5 years of the alleged violation.
📌 Key Takeaways for Exam Preparation
- Understand the differences between administrative, civil, and criminal actions.
- Familiarize yourself with the grounds for disciplinary actions and the due process involved.
- Remember the specific time frames associated with statutes of limitations for each type of action.
- Recognize the remedies available to investors in civil cases.
🚀 Enhance Your Series 63 Exam Preparation
For comprehensive study materials, practice questions, and further resources to aid in your Series 63 exam preparation, visit: