If you wonder how "real world" any of the Series 65/66 material is concerning the Uniform Securities Act, click on the title of this blog, or this link below:
See how the IL Administrator can protect IL investors from offers of unregistered securities, even if the issuer is in another state?
In the following order, you'll notice that even what seems like a private arrangement between two parties can meet the definition of a "security." Unfortunately, all that results is an "order of prohibition," which means as long as he doesn't do it again, he's okay. He doesn't have a license to take away, right? Unlike you and your co-workers, who had better be on your best behavior from Day 1.
Here's that order of prohibition:
See if you can make sense of the legalese. It's a good preparation for your exam, trust me.