Criminal Penalties
Willful violations: up to $5,000 fine and/or 3 years in prison; 5-year limit.
What is Criminal Penalties?
Under the 1956 Act, a willful violation is punishable by a fine of up to $5,000, up to 3 years' imprisonment, or both. Prosecutions must begin within 5 years. The Administrator cannot prosecute - it refers evidence to the appropriate prosecutor. A person cannot be imprisoned for violating a rule or order they prove they had no knowledge of.
Criminal Penalties: a worked example
An agent who knowingly sells fake bonds is referred by the Administrator to the state attorney general.
More terms in Uniform Securities Act & Registration
Uniform Securities Act (USA)
The model state securities law most states' 'blue sky' statutes are based on.
State Securities Administrator
The official or agency that enforces a state's securities act.
Person (USA Definition)
Anyone who can be held legally responsible - individuals and organizations.
Investment Adviser (USA Definition)
Advises on securities, as a business, for compensation.
Excluded from the Investment Adviser Definition
Banks, incidental professionals, broker-dealers, and publishers are not advisers at all.
Exemptions from State Adviser Registration
An adviser with no office in the state and only institutional or very few clients there.
De Minimis Exemption
No place of business in the state and fewer than 6 clients there in 12 months.
Federal Covered Adviser
An adviser registered with the SEC rather than the states.
All Uniform Securities Act & Registration terms · Full glossary