108-109

Splitting commissions

• agent can't split commissions with non-agent

Quiz 2K (9/9 100%) 

1. An agent guarantees a client that funds invested in mutual funds made up of government securities cannot lost principal. Unlawful
2. A nondiscretionary customer calls his agent and places a buy order for 1,000 shares of any hot internet company. Later in the day the agent enters an order for 1,000 shares of Global Internet Services.Unlawful
3. An agent receives a call from his client's spouse, advising him to sell her husband's securities. Her husband is out of the country and requested that his wife call the agent. The agent refuses because the wife does not have trading authorization, and she complains vigorously to his manager. Lawful.
4. A client writes a letter of complaint to his agent regarding securities that the agent has recommended. The agent calls the client to apologize and then disposes of the letter because the client seemed satisfied. Unlawful
5. A registered agent borrows $10,000 from a credit union that is one of her best customers. Lawful
6. An agent is convinced that Internet Resources will rise significantly over the next 3 months. She offers to buy the stock back from her customers at 10% higher than its current price during the next 3 months. Unlawful
7. An agent receives an order for the purpose of an obscure foreign security. The agent informs the client that the commissions and charges on this purchase will be much higher than those of domestic securities. Lawful
8. An agent who works for a small broker dealer that employs no securities analysts assures her clients that she can analyze any publicly traded security better than any analyst and that she will do it personally for each security purchased by a client, regardless of the industry. Unlawful
9. An agent recommends that her client buy 1,000 shares of Internet Consultants Inc, an unregistered nonexempt security with a bright future. Unlawful

Jurisdiction and powers of the state administrator

• Administrator has jurisdiction over securities transactions in state

Sale or sell

• contract to sell 

offer or offer to sell

• attempt or offer to dispose of security/interest for value
• any security given with purchase of something was offered
• gift of assessable stock-involves offer and sale
• sale/offer of right or warrant

Ex. if car dealer offers $1000 in corporate bonds, that is a securities sale under the jurisdiction of the Administrator and car-dealer must register with state as a B/D