ACAP and Gary Hume Were Fined and Suspended by FINRA

question 19

Multiple Choice

ACAP and Gary Hume were fined and suspended by FINRA for allowing some con artists to keep accounts at their brokerage firm. They contended they should not be punished for actions of con artists. The appeals court held that:

• A) ​FINRA followed its procedures properly, so the punishment would stand.
• B) ​FINRA received SEC approval for the punishments, so they would stand.
• C) ​FINRA received approval by an Administrative Law Judge of the SEC for the punishments, so they would stand.
• D) ​FINRA failed to follow proper procedure to allow ACAP and Hume to potentially demonstrate innocence, so the punishment would not stand.
• E) ​none of the other choices are correct.

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Definitions:

Primary Objective Test

A rule that states a writing is not needed for enforcement if the promise to pay another party’s debt is made to obtain a gain for the guarantor.

Guarantor

The promisor.

Enforceable

A characteristic of a legal agreement or obligation that allows it to be legally upheld or compelled in a court of law.

Hyperlink

A digital reference or link from one document or webpage to another within the same or a different website.