About this Flash Card Set
41 Cards
by tdfedrick
AI-generated flash cards from test on 2026-07-06
Front
Agent in Texas emails a recommendation to a Texas client (reads in Colorado). Client replies and accepts while in Kansas. Stock mailed from Missouri. Which state Administrators have jurisdiction?
Back
Texas and Kansas. Jurisdiction exists where an offer is made (Texas) and where it is accepted (Kansas). Temporary receipt (reading in Colorado) and transfer agent location (Missouri) do not create jurisdiction.
Tags
Front
Agent in Arizona calls a Nevada resident who answers in Utah. Recommendation made; client accepts later back in Nevada. Which states have jurisdiction?
Back
Arizona, Utah, and Nevada. Offer originated in Arizona, was received in Utah (where the call was answered), and was accepted in Nevada (client's residence where acceptance occurred).
Tags
Front
Which activities are considered an 'offer to sell' under the Uniform Securities Act: advertising, soliciting an investor to submit an offer, offering to dispose, completing the transaction?
Back
Advertising, soliciting, and offering to dispose are offers. An offer = attempt to dispose of a security for value (advertising, solicitation, offering). The completed transaction (transfer of ownership for value) is a sale, not an offer.
Tags
Front
Which of these is a sale under the Uniform Securities Act: transfer of municipal bond shares to a charity for payment; gift of corporate stock; purchase of gold; issuance of fixed annuity?
Back
Transfer of municipal bonds for payment is a sale. Rule: Security + value = sale. Gifts (no value), gold (not a security), and fixed annuities (not securities) are not sales.
Tags
Front
Agent in Georgia recommends a security to a Tennessee resident; client accepts while in North Carolina. Which Administrators have jurisdiction?
Back
Georgia, Tennessee, and North Carolina. Offer made in Georgia, directed to Tennessee (client's residence), and accepted in North Carolina—each state has jurisdiction.
Tags
Front
Agent in Pennsylvania recommends a nonexempt, unregistered security to a New Jersey resident; client declines and no sale occurs. Which state Administrators have jurisdiction over the violation?
Back
Both Pennsylvania and New Jersey. An illegal offer can violate the Act even if no sale occurs: the offer was made from Pennsylvania and directed into New Jersey.
Tags
Front
Which of these is NOT an offer or sale under the Uniform Securities Act: 10% stock dividend to shareholders; exercise of a stock option; gift of assessable stock; sale of subscription rights?
Back
A stock dividend (no consideration) is NOT an offer/sale. No payment = no sale. By contrast, option exercises, assessable stock gifts, and sale of rights generally involve acquisition or potential liability and are treated as sales/offers.
Tags
Front
Which is NOT a sale or offer under the Uniform Securities Act: gift of nonassessable common stock to an adult child; a warrant; stock dividend requiring a nominal payment; bonus shares given with a purchase?
Back
Gift of nonassessable stock is NOT a sale — true gift with no future liability. Warrants, stock dividends requiring payment, and bonus shares tied to a purchase are treated as offers/sales.
Tags
Front
Which would NOT be considered an offer to sell: securities from a corporate merger; issuance of convertible bonds; issuance of stock rights to shareholders?
Back
Securities received through a merger are NOT an offer to sell. Corporate reorganizations/mergers and certain exchanges are excluded. Convertible securities and stock rights are considered offers of the underlying stock.
Tags
Front
When is an offer considered made in a state under the Uniform Securities Act: it originates there; appears in a newspaper published outside but delivered into the state; transmitted by out-of-state radio but received by residents?
Back
Only when the offer originates in that state. Out-of-state newspapers, radio, and TV broadcasts received in the state do not by themselves create jurisdiction.
Tags
Front
State X: Does the Administrator have jurisdiction over (I) a radio broadcast originating in State X, (II) a radio broadcast originating in State Y but heard in X, (III) a newspaper published in State Y but circulated in X?
Back
Only I. Jurisdiction exists for broadcasts that originate in the state. Out-of-state radio broadcasts and out-of-state newspapers circulated in the state do not create jurisdiction by themselves.
Tags
Front
Which are considered sales: gift of assessable stock; gift of nonassessable stock; common stock distributed as bonus with purchase; a recommendation to purchase?
Back
Gift of assessable stock and stock given as a bonus are sales. Assessable = potential future liability = sale. Nonassessable gifts are true gifts (not sales). A recommendation is an offer/solicitation, not a sale.
Tags
Front
What best distinguishes an 'offer' from a 'sale' under the Uniform Securities Act?
Back
Offer = attempt/solicitation to dispose of a security for value. Sale = acceptance and creation of a binding contract or disposition for value. In short: offer = trying to make the deal; sale = deal completed.
Tags
Front
Furniture store gives 10 shares of stock as a free bonus with every living room set purchase. Under the Uniform Securities Act, the store is:
Back
Offering securities for sale. A security given as a bonus in connection with a purchase for value is considered part of a securities offering — "bonus security = sale."
Tags
Front
Which is considered an offer of a security: a prospectus delivered to a prospective investor; a stock split; a tombstone ad; an underwriting agreement?
Back
A prospectus delivered to a prospective investor is an offer. Stock splits and tombstone ads (announcements) and issuer-underwriter agreements are not offers to investors.
Tags
Front
When does a state Administrator have jurisdiction over an offer appearing in a bona fide newspaper published outside the state?
Back
Never solely because the out-of-state newspaper circulates within the state. A bona fide out-of-state newspaper delivered into the state does not, by itself, create jurisdiction.
Tags
Front
Agent in State A contacts customer residing in State B; customer accepts while in State C. Which state Administrators have jurisdiction?
Back
States A, B, and C. Jurisdiction attaches where the offer was made (A), directed/received (B), and accepted (C). Made + Directed + Accepted = jurisdiction.
Tags
Front
State X: jurisdiction over (I) email solicitation sent from Y to resident of X, (II) direct-mail from Y to residents of X, (III) TV ad broadcast from station in X, (IV) radio ad broadcast from station in Y and heard in X?
Back
I, II, and III only. Emails and direct mail directed into the state create jurisdiction; TV broadcasts originating in-state do too. Out-of-state radio broadcasts heard in-state do not create jurisdiction by themselves.
Tags
Front
Which is both an offer and a sale: gift of assessable stock to a family member; stock split; securities exchanged in a court-approved merger; stock pledged as collateral?
Back
A gift of assessable stock. Assessable stock can impose future liability on the recipient and is treated as an offer and sale. Stock splits and certain mergers are excluded; pledges as collateral are not sales.
Tags
Front
Which are considered a sale or an offer to sell: (I) gift of assessable preferred stock, (II) gift of nonassessable common stock, (III) sale of subscription rights to purchase additional shares?
Back
I and III. Assessable stock gifts are sales (potential future liability). Sale of rights/warrants is a sale/offer. Nonassessable stock gifts are true gifts and not sales.
Tags
Front
Agent and client both Florida residents. Agent calls while client is in Colorado; client accepts on the call. Later, client mails check while in Arizona drawn on a Nevada bank. Which Administrators have jurisdiction?
Back
Florida and Colorado. Offer originated in Florida; the offer was received and accepted in Colorado. Where payment is mailed from or where the bank is located (Arizona, Nevada) does not determine jurisdiction.
Tags
Front
Which are included in the definition of a 'sale' under the Uniform Securities Act: contract to sell at future date; transferring ownership for value; executing a contract of sale; issuing rights to purchase additional shares?
Back
All four (I–IV). The Act's definition of sale is broad: contracts to sell, contracts of sale, dispositions for value, and issuance of rights/warrants in a securities offering are all sales.
Tags
Front
Fill in the blank: The term 'sale' includes issuance of a ______ given with the purchase of another security.
Back
Warrant. Warrants (and rights) issued with the purchase of another security are treated as part of the sale under the Uniform Securities Act.
Tags
Front
Which transactions are sales: (I) investor redeems open-end fund shares for cash, (II) corporation distributes stock dividend at no cost, (III) shareholders exchange shares for surviving corporation in board-approved merger, (IV) shareholder liquidates stock for cash?
Back
I and IV. Redemption of mutual fund shares and liquidation for cash are sales (disposition for value). Stock dividends with no payment and board-approved merger exchanges are generally not sales.
Tags
Front
True/False: Redeeming mutual fund shares for cash is a sale, but receiving a stock dividend without paying consideration is not a sale under the Uniform Securities Act.
Back
True. Redemption for cash is a sale (consideration exchanged). Stock dividends received without consideration are not sales because no value is exchanged.
Tags
Front
Which of these are NOT considered an offer or sale under the Uniform Securities Act: gift of nonassessable stock, court‑approved reorganization, shareholder merger vote, securities pledged as collateral?
Back
All four are excluded. The USA excludes: a gift of nonassessable stock; judicially approved reorganizations/exchanges; class votes approving mergers/consolidations; and bona fide pledges or loans. (Remember: assessable vs nonassessable matters — assessable gifts can be treated as sales.)
Tags
Front
A newspaper published in Ohio (75% circulation outside Ohio) runs an IA ad that a Kentucky resident reads. In which state was the offer made under the USA?
Back
Neither Ohio nor Kentucky. For bona fide publications the 'two‑thirds test' applies: if >2/3 of the publication's circulation is outside the state of publication, the publication state's Administrator lacks jurisdiction; circulation into a state alone doesn't create an offer there.
Tags
Front
Which are sales under the USA: I) exercising subscription rights previously distributed by issuer, II) receiving assessable stock as a gift, III) issuer announces registered offering but hasn't accepted payment, IV) shareholder elects shares instead of cash dividend?
Back
I and II are sales. Exercising subscription/preemptive rights involves payment → sale. A gift of assessable stock is treated as a sale (recipient may incur liability). An announcement alone is not a sale; choosing stock in lieu of cash is not a sale.
Tags
Front
Fill in: Under the Uniform Securities Act, a ____ to sell a security for value is included in the definition of a sale.
Back
contract. The USA defines a sale to include every contract of sale, contract to sell, or disposition of a security or interest in a security for value.
Tags
Front
Agent in Colorado contacts a client temporarily in Florida; client's permanent residence is Georgia. Client accepts in Florida. Which state Administrators may have jurisdiction?
Back
All three (Colorado, Florida, Georgia). Jurisdiction can arise where the offer originates (Colorado), where it is directed/received and accepted (Florida), and the customer's state of domicile (Georgia).
Tags
Front
What best describes a 'sale' of a security under the Uniform Securities Act?
Back
A contract transferring a security or an interest in a security for value. A sale = contract of sale, contract to sell, or actual disposition for value. Solicitations/ads are offers, not sales.
Tags
Front
Which situations constitute an offer under the USA: I) agent recommends a security (client declines), II) investor offers to buy neighbor's closely held shares, III) donating shares to charity, IV) owner gifts securities to employee?
Back
I and II are offers. An offer includes an attempt to dispose for value or solicitation to buy. Gifts (III and IV) are not offers because no consideration is sought or exchanged.
Tags
Front
ABC mails promotional letters offering securities. When is the solicitation considered an offer made 'in this state' under the USA?
Back
When a resident of this state receives the solicitation mailed to an address located within the state (the original address on the mailing). Jurisdiction looks to where the offer was directed/mailed, not where mail is later forwarded or where a reader happens to be.
Tags
Front
Which is NOT considered a sale under the USA: using securities as collateral for a bank loan while retaining ownership, transferring securities for cash, agreeing to deliver securities in future, liquidating securities for value?
Back
Using securities as collateral (a bona fide pledge) is NOT a sale because ownership doesn't change. The others (transfer for cash, contract to deliver, liquidation for value) are sales.
Tags
Front
A state Administrator would NOT have jurisdiction over offers contained in which media: I) radio ad originating outside the state, II) financial magazine published in another state, III) newspaper published in the state with 75% circulation outside the state?
Back
I, II, and III. Media exceptions: broadcasts originating outside the state, publications published outside the state, and in‑state publications with >2/3 circulation outside the state do not create jurisdiction for the state's Administrator.
Tags
Front
Which scenario is an offer or sale under the USA: developer gives common stock to condominium buyers as a bonus; 5‑for‑1 stock split; investor pledges stock for a loan; grandfather gifts stock to granddaughter?
Back
Developer bonus = offer/sale. Securities given as a bonus/inducement to a purchase are treated as part of the transaction (offered/sold). Stock splits, bona fide pledges, and true gifts are not sales.
Tags
Front
Furniture retailer offers a $500 corporate bond 'free' with a $5,000 purchase. Under the USA, what must the retailer do?
Back
Treating the bond as part of the sale means it's an offer/sale of a security; the retailer must register as a broker‑dealer (or be otherwise exempt). A security given as a bonus is not a mere free gift.
Tags
Front
Which transactions are NOT considered offers or sales under the USA: I) exchanging one class of common stock for another (reclassification), II) securities pledged to lender, III) court‑approved reorganization exchanging securities, IV) stock dividend received without consideration?
Back
I, II, III, and IV. The USA excludes reclassifications, bona fide pledges/loans, judicially approved reorganizations, and no‑cost stock dividends from the definitions of an offer or sale.
Tags
Front
Agent recommends an unregistered security and tells client to place the order 'on your own initiative' to call it unsolicited. Under the USA this statement is best described as what?
Back
An offer to sell. The agent's solicitation makes the transaction solicited (an offer), even if the client later places the order. Unsolicited applies only when the idea originates entirely with the customer.
Tags
Front
Which is a sale under the USA: reinvesting cash dividends to buy additional shares, receiving a stock dividend with no payment, pledging shares for a home equity loan, parent gifting nonassessable stock to a child?
Back
Reinvesting cash dividends is a sale (consideration is used to buy shares). Stock dividends without payment, bona fide pledges, and gifts of nonassessable stock are not sales.
Tags
Front
Agent in Arizona sends offer to client in Nevada; client accepts in Nevada and mails payment from a Utah bank account. Which state's Administrator would NOT have jurisdiction based on these facts?
Back
Utah would NOT have jurisdiction based solely on payment origin. Jurisdiction depends on where the offer originated (Arizona) and where it was directed/received and accepted (Nevada). The payment's state is irrelevant.
Tags