Series 39 case studies
Series 39 · Put your knowledge to work in context.
The Series 39 - formally the Direct Participation Programs Principal Qualification Exam, or "DP" - is a FINRA principal-level qualification exam that tests whether an entry-level principal can perform the supervisory job of a direct participation programs principal. It is built for people who supervise a broker-dealer's DPP business: the exam measures knowledge of the rules and statutory provisions that apply to supervisory management of a firm whose products are limited to direct participation programs. The Series 39 case studies are 5 cases and about 4,016 words.
1Compensation Cap, Escrow Release, and a 'Guaranteed' Distribution in a Farmland DPP
Your firm is managing underwriter for a 30,000,000 best-efforts offering of limited partnership units in Rolling Acres Farm LP, a DPP that will buy 2,400 acres of farmland and lease it to operating tenants. The sponsor's term sheet shows: selling compensation of 9.5% of gross proceeds; organization and offering (O&O) expenses of 8.0%, borne by the partnership; and a separate 1.0% 'due diligence reimbursement' payable to your firm.
775 words, about 4 min2Principal Review: A 79-Year-Old, a Seven-Year Lockup, and a $15,000 Loan
Rep Dana Whitfield submits for principal approval a 120,000 purchase of units in a non-traded DPP for client Harold Nunn, age 79. The program has a seven-year holding period, limited redemption at a 5% discount to offering price, and a 6.25% distribution rate.
831 words, about 4 min3A Producing Branch Manager, an Unapproved Oil-and-Gas Program, and an Unregistered Order-Taker
Prairie branch has 11 registered reps and a branch manager, Carla Jensen, who personally generates 55% of branch revenue. Compliance's last on-site inspection of the branch is 14 months overdue.
807 words, about 4 min4Hiring a Statutory Disqualification Candidate Who Wants to 'Consult' While the Paperwork Clears
Your firm wants to bring Peter Lund into its DPP sales group. Lund's Form U4 shows that eight years ago he pleaded guilty to a misdemeanor under the state securities act for selling unregistered securities.
778 words, about 4 min5Net Capital Deficiency, Customer Subscription Money in the Operating Account, and a Pending Distribution
At Friday's close, Northgate Securities reports net capital of 262,000 against a minimum requirement of 250,000. Included in the calculation is a 150,000 subordinated loan from a shareholder that matures in seven months; the controller booked it at face value.
825 words, about 4 min