There are several events that could either prevent a person from becoming a Registered Representative, or that will result in the loss of membership or registration.

According to the NASD, you could be subject to a "statutory disqualification" under the Exchange Act if you:
(Note: the following items are a brief summary of the disclosure questions on form U-4)

  • were convicted, pled guilty or no contest; or charged with a felony.
  • were charged or convicted with a misdemeanor involving investments and related to fraud, extortion, bribery, or other unethical activities.
  • were involved in arbritration or civil litigation where you were found to violate sales practices.
  • received a final order, from a state securities commission, state authority, federal banking agency, etc., that barred you from an association to that authority or from engaging in securities, insurance, banking and other financial services.
  • participated in fraudulent, manipulative, or deceptive conduct that violated any applicable laws or regulations.
  • had registration revoked or suspended from an accountant, attorney or federal contractor role.
  • filed for bankruptcy within the last 10 years.

The NASD provides a detailed summary of the statutory disqualification process here. In addition, you can view previous statutory disqualification decisions here.

For more information on the U4 Form, Click Here

  1. What are examples of businesses that exhibit social responsibility?

    In the 21st century, companies that exhibit corporate social responsibility are winning high marks from consumers and investors ... Read Full Answer >>
  2. Why is social responsibility important to a business?

    Social responsibility is important to a business because it demonstrates to both consumers and the media that the company ... Read Full Answer >>
  3. Why are business ethics important?

    Several factors play a role in the success of a company that are beyond the scope of financial statements alone. Organizational ... Read Full Answer >>
  4. How important are business ethics in running a profitable business?

    A number of factors play a part in making a business profitable, including expert management teams, dedicated and productive ... Read Full Answer >>
  5. How do business ethics differ among various countries?

    Business ethics is the study of business policies and practices, such as corporate governance, insider trading, bribery, ... Read Full Answer >>
  6. What was Rupert Murdoch's role in the wiretapping scandal?

    According to Rupert Murdoch, he had no direct role in the wiretapping scandal involving the now-defunct news tabloid “News ... Read Full Answer >>
Related Articles
  1. Investing

    How Conscious Consumers Are Changing Business

    Thanks to the growth of conscious consumerism, corporations must evolve or lose ground to new, ethos-based entrepreneurial models.
  2. Investing Basics

    How Do Internal Controls Work?

    Essentially, internal controls limit fraud and other illegal activities.
  3. Economics

    What is a Code of Ethics?

    A code of ethics is a collection of principles and guidelines an organization expects its employees to follow.
  4. Investing

    How To Invest For The Greater Good

    We discuss why is important to prioritize economic, social and governance factors when making investment decisions, regardless of gender or generation.
  5. Investing

    Why These Industries Are Prone To Corruption

    Corruption is like life in that it exists pretty much everywhere the conditions are favorable.
  6. Professionals

    Surviving an SEC Audit: Tips for Advisors

    Your firm may never be audited by the SEC, but you need to be prepared nonetheless. Follow these tips to make sure you're in compliance and organized.
  7. Investing

    How Counterfeiting Affects Alibaba's Business

    We examine the source of Alibaba's counterfeit products and their effects, as well as the ways Alibaba is fighting back.
  8. Taxes

    What's an Audit?

    An audit is an objective examination of accounting records that makes sure the records are a fair and accurate representation of the transactions they claim to represent.
  9. Economics

    What is Price Discrimination?

    Price discrimination occurs when a company charges different customers different prices for the same goods or services.
  10. Economics

    What Does Asymmetric Information Mean?

    Asymmetric information describes a situation where one party in a transaction knows more than the other.
  1. Principal-Agent Problem

    The principal-agent problem develops when a principal creates ...
  2. Bidding Ring

    A group of individuals or businesses that conspire to affect ...
  3. Negative Option Deals

    A dubious business practice that involves supplying a typically ...
  4. Bad Faith Insurance

    An insurance company’s appalling or malicious refusal to pay ...
  5. UDAAP

    Misleading or harmful behaviors by those who offer financial ...
  6. Computer Crime Insurance

    An insurance policy that provides protection from crimes committed ...

You May Also Like

Hot Definitions
  1. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  2. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  3. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  4. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
  5. Cost Of Funds

    The interest rate paid by financial institutions for the funds that they deploy in their business. The cost of funds is one ...
  6. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!