Question

Twelve years ago, a person pleaded guilty to a felony charge. She was recently released from prison and is applying for an position in the trading department of a broker-dealer. Which of the following statements is TRUE regarding her eligibility for current employment in the securities industry?

a. If the felony was not related to securities, the criminal record is of no significance.
b. She's not subject to statutory disqualification and is currently eligible to be hired.
c. Pleading guilty does not constitute a conviction; therefore, she's eligible for employment.
d. The firm's branch manager may use his judgment to determine the applicant's eligibility status.

Answer 1

The correct answer is b. She's not subject to statutory disqualification and is currently eligible to be hired. The person is not subject to statutory disqualification and is currently eligible for employment in the trading department of a broker-dealer.

Step-by-step explanation:

Under the Securities Exchange Act of 1934, a felony conviction does not automatically disqualify someone from working in the securities industry. However, certain felony convictions are considered statutory disqualifications, which would prevent someone from working in the industry. These disqualifications include convictions related to securities fraud or dishonesty.

In this case, since the felony charge was not related to securities, the person is not subject to statutory disqualification and is currently eligible for employment in the trading department of a broker-dealer.