Chapter 18 Practice Questions
- 1. When FINRA issues a complaint against member firms or associated persons suspected of rules violations, it has certain obligations to inform the public. Which of the following actions least describes FINRA’s responsibilities to the public?
- A. It must report any allegations of a FINRA rules violation.
- B. It must report any monetary sanctions imposed on an associated person.
- C. It must report significant policy violations that have a public interest.
- D. It must report disciplinary decisions involving the suspension of a member firm.
- 2. A customer brings a claim against a firm seeking $90,000 in damages. The arbitration panel must consist of:
- A. One public arbitrator
- B. Two public arbitrators and one nonpublic arbitrator
- C. Either one or three arbitrators, by customer choice
- D. Three arbitrators
- 3. Which of the following is true of mediation under the FINRA Code of Mediation?
- A. Mediation under the code is mandatory.
- B. A mediator is selected by FINRA Dispute Resolution.
- C. Mediation is available for disputes not eligible for arbitration.
- D. Either party is free to leave mediation at any time.
- 4. Due to business cutbacks, Randall is laid off from his back-office job with Alliance Investments. Two months later, he lands a similar job with another brokerage. Which of the following actions is Alliance Investments required to take following his termination and reemployment?
- A. File a Form U-2 with FINRA within 30 days of Randall’s termination
- B. Send Randall a copy of Form U5 within 30 days of his termination
- C. Send Randall’s new employer a copy of Form U4 within two days of his hiring
- D. State the reason for Randall’s termination on its Form U4 filing with FINRA
- 5. A member firm must register each of its associated persons by filing their personal information w