Lesson 15 Disciplinary Actions: Disciplinary Actions Any action taken against a FINRA member by the SEC, an exchange, a state regulator, a clearing firm or other regulatory body must be reported to FINRA as soon as possible. Customer complaints of fraud or misrepresentation must also be taken seriously and reported immediately, which means within 10
Lesson 14 The Securities and Exchange Act of 1934: The Securities and Exchange Act of 1934 was a law that came in response to the Stock Market crash of 1929. It regulates the secondary market that deals in transactions between investors, instead of the primary market, which is companies to investors. This is sometimes known
Lesson 13 Fiduciary Responsibilities: Fiduciary Responsibilities A statement must be disclosed that lists the fiduciary obligation of the general partner. The specific language is set down by the SEC. If there is an exculpation or indemnification provision, additional disclosers are required. Exculpation means that the general partner may not be liable to the partnership for
Lesson 10 Rule 144: Rule 144 regulates how restricted securities can be sold. It sets down the holding period, the amount of the security that can be sold, the filing procedures, and the method of sale. Control securities are those owned by people who have 10% or more of the company’s stock. There is no
Lesson 9 Types of Offerings: Types of Offerings There are three different types of offerings that an issuer might create: Initial public offering, subsequent primary offering, secondary offering. Initial Public Offering = This is the first time that a company has sold its stock to the public. The issuer receives the proceeds from the sale
Lesson 8 Securities Act of 1933: After the stock market crashed in 1929, Congress passed The Securities Act of 1933, which brought major reform and regulation to the financial industry in the United States. It regulates the primary market, and requires people to disclose all material facts when transacting business with each other. The primary
Lesson 7 Entertainment Programs: Entertainment programs These programs invest in movies and music. These investments can be very risky as most creative projects are not the massive hits they need to be in order to turn a large profit. It is usually set up where the limited partners contribute capital for the partner and then
Lesson 6 Direct Participation Programs (DPP): There are many types of DPPs: Agriculture Livestock Equipment Commodities Venture Capital Entertainment You need to understand how each of the DPPs works so that you can make the best recommendation possible to your clients. This means understanding the objectives of each types, the risks associated with each type,
Lesson 5 Kinds of Limited Partnerships: People are allowed to create a limited partnership in order to attempt anything that is legally allowed. Most limited partnerships fall into one of three categories: investing in real estate of some kind, investing in fossil fuel production, or engaging in equipment leasing. If a limited partnership is investing
Lesson 3: Essential Vocabulary, Part II Person When talking about investing, this is any entity that can form a legally-binding contract (they are of age and of sound mind), and they are allowed to do business in the securities market. These do not only have to be an individual, but can be a partnership, a
