Investment Company and Variable Contracts Products Representative (Series 6)Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Enhance your competence for the Series 6 Exam. Study with expertly crafted multiple-choice questions, each complete with hints and detailed explanations. Elevate your performance and pass the exam with confidence.

Start Multiple Choice Practice Test
Start Flash Cards

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What does treble damages mean in the context of insider trading violations?

  1. The SEC can impose a fine of three times the profit made

  2. The SEC can impose a fine of three times the original investment

  3. The SEC can sue for three times the loss avoided

  4. Both A and C

The correct answer is: Both A and C

In the context of insider trading violations, treble damages refer to the legal principle allowing for the imposition of penalties three times the amount of the profits made or losses avoided as a result of the illegal activities. This serves as a deterrent to potential violators, emphasizing that the consequences of insider trading will be severe. Choosing both the profit made and the loss avoided reflects the two distinct aspects the SEC addresses in insider trading cases. This means that if an individual profits from trading on nonpublic information, they may be required to pay back three times that profit (thus, reflecting option A). Additionally, if insider trading allows a party to avoid losses they would otherwise have faced, the SEC can seek treble damages based on those avoided losses, aligning with option C. The combination of options A and C effectively encompasses the broader scope of treble damages as a remedy for insider trading violations, thereby making the selection of both A and C accurate.

More Questions Like This