unit 16 Qbank quizzes

A)

FINRA has published a list of all the prohibited activities.

• There can never be a complete list of all the ways to cheat people. If it looks like lying, cheating, or stealing, don't do it.

All of the following are true of prohibited activities except

A)

FINRA has published a list of all the prohibited activities.

B)

the use of fraudulent devices is on FINRA's list of prohibited activities.

C)

the improper use of customer assets is on FINRA's list of prohibited activities.

D)

the use of manipulative devices is on FINRA's list of prohibited activities.

C)

The Exchange Act.

• The Exchange Act is the Securities Exchange Act of 1934 and covers the secondary markets. The Securities Act of 1933 covers the primary market and requires full and fair disclosure on new issues by providing a prospectus to the investor.

All of the following names describe the Securities Act of 1933 except

A)

The Truth in Securities Act.

B)

The Full and Fair Disclosure Act.

C)

The Exchange Act.

D)

The Prospectus Act.

C)

the Securities Exchange Commission (SEC).

• The SEC is a government entity, not an SRO. FINRA, MSRB, and the NYSE are examples of self-regulators within the industry.

All of the following are examples of SROs in the securities industry except

A)

the Municipal Securities Rulemaking Board (MSRB).

B)

the Financial Industry Regulatory Authority (FINRA).

C)

the Securities Exchange Commission (SEC).

D)

the New York Stock Exchange (NYSE).

D)

Financial Crimes Enforcement Network.

• This is the job of the Financial Crimes Enforcement Network (FinCEN), a division of the Treasury department.

The government agency charged with the collection, analysis, and dissemination of financial transactions is called the

A)

Federal Bureau of Investigation.

B)

Central Intelligence Agency.

C)

Department of Justice.

D)

Financial Crimes Enforcement Network.

B)

CTR within 15 days

• The Bank Secrecy Act requires firms to report on a CTR any currency received in the amount of more than $10,000 on a single day, within 15 days.

Deposits received in currency for amounts over $10,000 in a day would require the firm to report the transaction in how many days on what form?

A)

SAR within 15 days

B)

CTR within 15 days

C)

SAR within 30 days

D)

CTR within 30 days

D)

arrest and prosecute for criminal activity.

• The SEC cannot arrest a natural person, but it can contact the U.S. Department of Justice. All of the others listed here are within the SEC's authority.

The Securities and Exchange Commission (SEC) may take all of the following actions against registered persons except

A)

place limits on activities related to the securities business.

B)

suspend registration.

C)

issue a letter of censure.

D)

arrest and prosecute for criminal activity.

B)

Placement

• Initiation is a made up term not related to money laundering. Placement is the first step followed by layering and integration.

Which of the following is the first stage in the money laundering process?

A)

Integration

B)

Placement

C)

Layering

D)

Initiation

C)

The administrator

According to the Uniform Securities Act, who is charged with enforcing state securities laws and regulations?

A)

FINRA

B)

NASAA

C)

The administrator

D)

The SEC

B)

Securities sold to the public by the issuer

• When an issuer is selling its securities, that is a primary market transaction.

Which of the following would take place in the primary market?

A)

Securities sold on both the OTC and NYSE

B)

Securities sold to the public by the issuer

C)

Securities bought and sold on the OTC

D)

Securities bought and sold on the NYSE

D)

The individual may associate with another member firm with SEC permission.

• If the SEC expels or bars an associated person, no broker-dealer may allow that person to associate with it in any capacity unless the SEC has granted express permission to do so.

If an associated person is expelled from the securities industry, which of the following is true?

A)

The individual may still be employed as a paid adviser to a member firm.

B)

The individual may never associate with another member for life.

C)

The individual may still serve as an officer or director of a member firm but have no sales function.

D)

The individual may associate with another member firm with SEC permission.

A)

structuring, and a CTR should be filed.

• It appears that the customer is structuring deposits to avoid attention being drawn to the amount of cash he is depositing. This activity is called structuring. As the transactions exceed $10,000 in a day of currency, your firm would file a currency transaction report with FinCEN.

During the course of a day a customer makes six separate cash deposits at six different branches totaling over $11,000. This may be an example of

A)

structuring, and a CTR should be filed.

B)

application, and an SAR should be filed.

C)

integration, and an SAR should be filed.

D)

extraction, and a CTR should be filed.

C)

federal covered securities and not required to register at the state level.

• Investment companies registered under the Investment Company Act of 1940 offer securities that are deemed to be federally covered. The effect of this designation is that states do not have jurisdiction over the registration requirements of these securities; no state registration can be required. Therefore federally covered securities are required to register at the federal level only.

Regarding registration for the sale of securities, those registered under the Investment Company Act of 1940, such as mutual funds, would be considered

A)

federal covered securities required to register at the state level only.

B)

securities that are exempt from registration at all levels.

C)

federal covered securities and not required to register at the state level.

D)

securities required to register at both the federal and the state level.

A)

broker-dealers.

• The Office of the Comptroller of the Currency supervises nearly 1,400 national banks, federal savings associations, and federal branches and agencies of foreign banks operating in the United States. The mission of the comptroller is to ensure that national banks and federal savings associations operate in a safe and sound manner, provide fair access to financial services, treat customers fairly, and comply with applicable laws and regulations. The comptroller also serves as a director of the Federal Deposit Insurance Corporation.

The Office of the Comptroller of the Currency supervises all of the following except

A)

broker-dealers.

B)

federal savings associations.

C)

foreign banks operating in the United States.

D)

national banks.

B)

structuring.

• Placement, layering, and integration are phases of money laundering. Making multiple deposits to stay under the radar of having a CTR filed is structuring.

A customer who tries to disguise deposits of more than $10,000 in currency by making multiple smaller deposits in currency is guilty of

A)

integration.

B)

structuring.

C)

layering.

D)

placement.

B)

Federal Deposit Insurance Corporation (FDIC)

• The FDIC provides deposit insurance guaranteeing the safety of a depositor's accounts in member banks up to $250,000 for each deposit ownership category in each insured bank.

Which of the following organizations was created to financially protect depositors from a bank failure?

A)

Federal Reserve Board (FRB)

B)

Federal Deposit Insurance Corporation (FDIC)

C)

Office of Foreign Assets Control (OFAC)

D)

Securities Investor Protection Corporation (SIPC)