Finra
Which Form U4 reportable event results in statutory disqualification?
Statutory disqualification: felony + dishonesty/securities-related. 10-year lookback for felonies.
Complete Analysis & Legal Rationale
A felony CHARGE (not just conviction) involving theft, dishonesty, or securities-related misconduct can result in statutory disqualification. Theft is a crime involving dishonesty and moral turpitude.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Bankruptcy must be reported but does not cause statutory disqualification.
Complaints must be reported but a mere allegation doesn't cause disqualification.
Matches the verified teaching point in the explanation.
While DUI is a felony, it does not involve dishonesty or securities crimes.
Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA Series 7 outline.