Michigan License Law Practice Test

If Seller Mitch wins a fraud case against Broker Adam, what can the Department do?

1. File a lawsuit against Mitch

2. Initiate its own investigation against Adam

3. Dismiss the case

4. Impose fines on Mitch

The correct answer is: Initiate its own investigation against Adam

When Seller Mitch wins a fraud case against Broker Adam, the Department has the authority to initiate its own investigation against Adam. This is because the outcome of the court case may indicate that Broker Adam engaged in unethical or illegal behavior in his professional capacity. Regulatory bodies often take a proactive approach to ensure that licensed professionals comply with the law and maintain ethical standards. If the court has found that Adam committed fraud, it can trigger the Department's responsibility to investigate further to protect consumers and uphold the integrity of the real estate profession. This investigation could lead to various disciplinary actions, including possible sanctions against Adam's license, depending on the findings. The other options involve actions that would not align with the responsibilities and processes typically governed by the Department in such situations. For instance, filing a lawsuit against Mitch would be illogical since he won the case, and dismissing the case wouldn't be a relevant action as there would already be a ruling. Imposing fines on Mitch would also not be appropriate, as he is the victim in this situation, having successfully proven fraud against him.