A cease-and-desist order is used to stop a person from violating securities laws.

• A. True
• B. False
• C. Only for state securities
• D. Only for registered investment advisers

Answer: (A)

Cease-and-desist orders are enforcement tools regulators use to halt suspected securities-law violations quickly, without waiting for a full adjudicatory process. They’re issued when there’s a risk of ongoing or imminent harm, and they can target individuals, broker-dealers, investment advisers, or others engaging in unregistered or fraudulent activities. The order requires the person to stop the offending conduct and may provide a hearing or later opportunity to challenge. If not complied with, regulators can pursue injunctions, civil penalties, or other enforcement actions. Because this remedy is designed to stop violations, the statement is true.