A:

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

RELATED FAQS
  1. Is it possible to take the Series 7 exam without being sponsored?

    Unfortunately, the answer is "No." The Financial Industry Regulatory Authority or FINRA, (formerly the National Association ... Read Answer >>
  2. Is it possible to take the Series 6 exam without being sponsored?

    Unfortunately, the answer to this question is "No." The Financial Industry Regulatory Authority or FINRA (previously the ... Read Answer >>
  3. I am not currently employed at a member firm, but I have independently written the ...

    After you have successfully completed your exam, you have two years to become registered or licensed to prevent your completion ... Read Answer >>
  4. My job with a member firm has recently been terminated and I do not want to write ...

    The National Association of Securities Dealers (NASD) states that if you become employed with another member firm within ... Read Answer >>
  5. A person whose registration has been revoked by an Administrator due to a felony ...

    The correct answer is a. The Administrator may suspend, deny or revoke registration in any capacity if the person has such ... Read Answer >>
  6. How long is the validity period for a Series 63 exam if I have not been registered?

    Find out how registration begins using Series 63 results and how long scores are valid without registration. Learn more about ... Read Answer >>
Related Articles
  1. Investing

    Series 63 Exam State Securities Administrator

    Learn what you need to know about the state securities administrator to pass the Series 63 exam.
  2. Financial Advisor

    Why Bad Credit Is Bad For Financial Careers

    In order to obtain and maintain a career in the financial industry, it is also important to have a clean credit report.
  3. Financial Advisor

    Professional Correspondence That Pushes The Envelope

    Learn the difference between correspondence and sales literature, according to NASD rules.
  4. Investing

    History Of The U.S. Federal Trade Commission

    Since the early 1900s, the Federal Trade Commission has been working to protect U.S. citizens from corporations.
  5. Financial Advisor

    Steps to Starting Up an Independent Broker Dealer

    Launching your own broker-dealer is a lot of work, but the potential payoff is great, both personally and financially.
  6. Taxes

    What's IRS Form 2848 Used For?

    It's a power of attorney tax form and here's what it can, and cannot, do.
  7. Financial Advisor

    Top Ways Advisors Can Get Fired from a Practice

    These are the most common reasons why advisors get fired.
  8. Financial Advisor

    Introduction To The Series 65 Exam

    The Series 65 is required in many states in order to be a fee-based advisor. Find out what it is and whether you need it.
  9. Financial Advisor

    Is Your Broker Legit? 6 Steps to Take

    The Great Recession may have ended, but broker wrongdoing hasn't. Here's how to make sure you don't get stuck with the next Bernie Madoff.
RELATED TERMS
  1. Statutory Reserves

    State regulated reserve requirements. Insurance companies must ...
  2. Adjusted Liabilities

    The liabilities of an insurance company that differ from the ...
  3. Registration

    1. The process by which a company files required documents with ...
  4. SEC Form U-5S

    A filing with the Securities and Exchange Commission (SEC) that ...
  5. Statutory Employee

    A class of employee that is permitted to deduct work-related ...
  6. NASD Rule 2790

    A ruling passed by the National Association of Dealers (NASD), ...
Hot Definitions
  1. Death Taxes

    Taxes imposed by the federal and/or state government on someone's estate upon their death. These taxes are levied on the ...
  2. Retained Earnings

    Retained earnings is the percentage of net earnings not paid out as dividends, but retained by the company to be reinvested ...
  3. Demand Elasticity

    In economics, the demand elasticity refers to how sensitive the demand for a good is to changes in other economic variables. ...
  4. Dark Pool

    A dark pool is a private financial forum or exchange for trading securities.
  5. Quadruple Witching

    The expiration date of various stock index futures, stock index options, stock options and single stock futures. All stock ...
  6. American Opportunity Tax Credit

    A tax credit that enabled more student and parents to pay for part of their college expenses in the 2009 and 2010 tax years ...
Trading Center