SIE Overview of the Regulatory Framework Question 18: Answer and Explanation

Question: 18

Which of the following may prevent a firm from hiring an individual, according to Securities Exchange Act of 1934 Section 3(a)(39) – Definitions and Application of Title (Statutory Disqualification)?

• A. Disciplinary action by a Human Resources Department in a previous employment
• B. Conviction of a felony within ten years prior to an application for membership or participation
• C. Bankruptcy other than a business bankruptcy within seven years prior to an application for membership or participation
• D. More than one divorce in the five years prior to an application for membership or participation

Correct Answer: B

Explanation:

B: Choice B is correct because conviction of a felony less than ten years before the application may be cause for statutory disqualification. Choices A, C, or D are incorrect because the Securities Exchange Act of 1934 Section 3(a)(39) – Definitions and Application of Title (Statutory Disqualification) does not refer to action by a Human Resources Department in a previous employment, bankruptcy, or divorce as cause for disqualification.