Securities Trader Representative (Series 57) Practice Exam

Question: 1 / 400

What is the maximum criminal penalty for individuals convicted of insider trading?

$1,000,000 fine and/or 10 years in prison

$5,000,000 fine and/or 20 years in prison

The maximum criminal penalty for individuals convicted of insider trading includes a fine of up to $5,000,000 and/or incarceration for a period of up to 20 years. This reflects the serious nature of insider trading offenses, as they undermine market integrity and investor trust.

To ensure compliance and deter unlawful behavior, the law imposes significant penalties that match the severity of the crime. The fine is designed to be substantial enough to serve as a deterrent, making individuals think twice before engaging in insider trading practices. The lengthy prison sentence further emphasizes the legal system's stance on the importance of ethical trading and maintaining fairness in the financial markets.

Other options do not align with the established penalties set by securities law, which specify the upper limits clearly defined in regulations governing insider trading violations.

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$10,000,000 fine and/or 15 years in prison

$2,500,000 fine and/or 25 years in prison

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