Antifraud Provisions

What this video covers

• Why the Uniform Securities Act (USA) antifraud provision has no exemptions and covers every person, registered or unregistered, in every offer, sale, or purchase of any security
• The three prongs of fraud: device or scheme to defraud, untrue statement or material omission, and act or course of business operating as fraud or deceit
• Why prong three (operating as fraud) does not require intent, while prong one (scheme to defraud) does, and how this distinction creates the most tested exam trap
• Why dangerous incompetence that operates as fraud triggers administrative and civil liability even when the person had no malice at all
• The four escalating sanctions: administrative proceedings, judicial injunction, criminal prosecution, and civil liability with the buyer's private right of action
• The exact criminal penalty limits under state law: a $5,000 fine and up to 3 years imprisonment, and why these require willful violations
• Why exempt securities and exempt transactions still leave an agent fully exposed to antifraud liability, and how the exam tests this with hypothetical loophole attempts