Question

Joe has been traveling the country on a road trip for a couple of weeks and is now finally on his way home. He decides to make one more stop at a hotel in State B before he finishes up the drive to his home in State A. While at the hotel, Joe runs into Bill, an old friend and an agent, registered in State B, who solicits the purchase of a security to Joe. Joe agrees to purchase the security and pays for it then and there. Bill informs Joe that he will send the confirmation to Joe's residence in State A and does so. If Bill is properly registered throughout all states of the country, but sold Joe a security that is not registered and is not exempt in any way from registration, which of the following is correct?
[A] Every state within which Bill is registered (50 states), may take action against Bill.
[B] Only State A and State B can take action against Bill.
[C] Only State B can take action against Bill.
[D] Only State A can take action against Bill.

Answer 1

Answer:

[B] Only State A and State B can take action against Bill.

Explanation:

This is because the whole details of the transaction took place between State A and State B. This is why the states involved can take action against Bill. If not, then all the States would have had the right to take action against Bill.

This analysis validates that Only State A and State B would be able to take action against Bill.