Assets under management Growth by Quarter
Quarterly points use the latest ADV filing or SEC roster snapshot available in each quarter.
Total AUM
Total Accounts
10Y AUM Change
Private Funds
Private funds reported by Merrill Lynch, Pierce, Fenner & Smith Incorporated
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Employee Growth by Quarter
Quarterly points use the latest ADV filing or SEC roster snapshot available in each quarter.
Total Employees
Clients per Employee
10Y Employee Change
Historical AUM and employee figures reflect available SEC Form ADV filings under this CRD. Filing gaps may reflect registration status changes, dormant periods, state registration periods, firm restructuring, or other reporting changes. Rialytix does not interpolate missing periods.
Ownership
Reported direct and indirect ownership ranges
Each range applies to a separate reported relationship and should not be added together.
Reported ownership ranges
Highlighted bands show the percentage range reported in Form ADV.
0%25%50%75%100%
BAC NORTH AMERICA HOLDING COMPANYDirect owner · Schedule AInterest in MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
75%+
BANK OF AMERICA CORPORATIONIndirect owner · Schedule BInterest in NB HOLDINGS CORPORATION
75%+
NB HOLDINGS CORPORATIONIndirect owner · Schedule BInterest in BAC NORTH AMERICA HOLDING COMPANY
75%+
Bars represent the reported range at that individual ownership step, not an estimated percentage of the advisory firm. Indirect relationships may refer to intermediate entities rather than directly to Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Reported ownership and control details
Form ADV · Filing date 2026-09-24 · Schedules A and B
| # | Owner / person & role | Interest in entity | Reported interest | Control person | Title / status acquired | Source |
|---|---|---|---|---|---|---|
| 1 | BAC NORTH AMERICA HOLDING COMPANYSHAREHOLDERDomestic entity | MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED | 75% or moreCode E | Yes | SHAREHOLDER01/2015 | Schedule APDF page 80 |
| 2 | LINDSAY DENARDO HANSSTATE DESIGNATED PRINCIPAL & DIRECTORIndividual | MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED | Less than 5%Code NA | Yes | STATE DESIGNATED PRINCIPAL & DIRECTOR01/2019 | Schedule APDF page 80 |
| 3 | DAVID CARLETON JR HEATONCHIEF LEGAL OFFICERIndividual | MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED | Less than 5%Code NA | No | CHIEF LEGAL OFFICER05/2019 | Schedule APDF page 80 |
| 4 | ERIC A SCHIMPFDIRECTOR & CHIEF EXECUTIVE OFFICER, STATE DESIGNATED PRINCIPALIndividual | MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED | Less than 5%Code NA | Yes | DIRECTOR & CHIEF EXECUTIVE OFFICER, STATE DESIGNATED PRINCIPAL04/2023 | Schedule APDF page 80 |
| 5 | NANCY MONIR FAHMYDIRECTORIndividual | MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED | Less than 5%Code NA | Yes | DIRECTOR01/2024 | Schedule APDF page 80 |
| 6 | SUSAN F AXELRODCHIEF COMPLIANCE OFFICERIndividual | MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED | Less than 5%Code NA | No | CHIEF COMPLIANCE OFFICER03/2025 | Schedule APDF page 80 |
| 7 | VINCENT C. SANTANNACHIEF OPERATIONS OFFICER & FINOPIndividual | MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED | Less than 5%Code NA | No | CHIEF OPERATIONS OFFICER & FINOP03/2025 | Schedule APDF page 80 |
| 8 | SARA RATHBONE MOONEYCHIEF FINANCIAL OFFICERIndividual | MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED | Less than 5%Code NA | No | CHIEF FINANCIAL OFFICER09/2025 | Schedule APDF page 80 |
| 9 | DAVID C TYRIEDIRECTORIndividual | MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED | Less than 5%Code NA | Yes | DIRECTOR07/2026 | Schedule APDF page 80 |
| 10 | BANK OF AMERICA CORPORATIONSHAREHOLDERDomestic entity | NB HOLDINGS CORPORATION | 75% or moreCode E | Yes | SHAREHOLDER10/1998 | Schedule BPDF page 80 |
| 11 | NB HOLDINGS CORPORATIONSHAREHOLDERDomestic entity | BAC NORTH AMERICA HOLDING COMPANY | 75% or moreCode E | Yes | SHAREHOLDER10/2008 | Schedule BPDF page 80 |
Less than 5% may include zero. Code F identifies a role without specifying a percentage. Reported interests may overlap and may not include every owner. Total indirect ownership is not calculated.
Compliance & Disclosures
Filing dated 9/24/2026 12:03:22 PM
Responses were selected by the RIA in its filing. Questions are shortened for readability; “you” refers to the reporting firm, and some questions also cover advisory affiliates.
RIA or supervised-person involvementThe RIA reported that none of the events below involve the firm or its supervised persons.RIA responseNo
AFelonies2 Yes
In the past ten years, have you or any advisory affiliate:
- A1Been convicted of or pleaded guilty or no contest to a felony?Yes
- A2Been charged with a felony?Yes
BMisdemeanors2 Yes
In the past ten years, have you or any advisory affiliate:
- B1Been convicted of or pleaded guilty or no contest to a misdemeanor involving investments, an investment-related business, fraud, false statements or omissions, wrongful taking of property, bribery, perjury, forgery, counterfeiting, or extortion?Yes
- B2Been charged with a misdemeanor of the kind listed above?Yes
CSEC or CFTC actions4 Yes1 No
Has the SEC or CFTC ever:
- C1Found you or an advisory affiliate made a false statement or omission?Yes
- C2Found you or an advisory affiliate violated SEC or CFTC regulations or statutes?Yes
- C3Found you or an advisory affiliate caused an investment-related business to have its authorization to do business denied, suspended, revoked, or restricted?No
- C4Entered an order against you or an advisory affiliate in connection with investment-related activity?Yes
- C5Imposed a civil money penalty on you or an advisory affiliate, or ordered you or an advisory affiliate to cease and desist from any activity?Yes
DOther regulatory actions5 Yes
Has any other federal regulatory agency, state regulatory agency, or foreign financial regulatory authority ever:
- D1Found you or an advisory affiliate made a false statement or omission, or was dishonest, unfair, or unethical?Yes
- D2Found you or an advisory affiliate violated investment-related regulations or statutes?Yes
- D3Found you or an advisory affiliate caused an investment-related business to have its authorization to do business denied, suspended, revoked, or restricted?Yes
- D4In the past ten years, entered an order against you or an advisory affiliate in connection with investment-related activity?Yes
- D5Denied, suspended, or revoked your or an advisory affiliate’s registration or license, or otherwise prevented association with an investment-related business or restricted activities?Yes
ESelf-regulatory organization actions2 Yes2 No
Has a self-regulatory organization or commodities exchange ever:
- E1Found you or an advisory affiliate made a false statement or omission?No
- E2Found you or an advisory affiliate violated its rules, other than a violation designated as a minor rule violation under an SEC-approved plan?Yes
- E3Found you or an advisory affiliate caused an investment-related business to have its authorization to do business denied, suspended, revoked, or restricted?No
- E4Disciplined you or an advisory affiliate by expulsion, suspension, barring association with other members, or otherwise restricting activities?Yes
FProfessional authorizations1 Yes
- FHas an authorization to act as an attorney, accountant, or federal contractor granted to you or an advisory affiliate ever been revoked or suspended?Yes
GPending regulatory proceedings1 Yes
- GAre you or any advisory affiliate now the subject of a regulatory proceeding that could result in a “Yes” answer to any part of C, D, or E?Yes
HCivil judicial actions and proceedings3 Yes1 No
(1) Court actions
Has a domestic or foreign court:
- H(1)(a)In the past ten years, enjoined you or an advisory affiliate in connection with investment-related activity?Yes
- H(1)(b)Found that you or an advisory affiliate violated investment-related statutes or regulations?Yes
- H(1)(c)Dismissed, pursuant to a settlement agreement, an investment-related civil action brought against you or an advisory affiliate by a state or foreign financial regulatory authority?No
(2) Pending civil proceedings
- H(2)Are you or any advisory affiliate now the subject of a civil proceeding that could result in a “Yes” answer to any part of H(1)?Yes
Additional DRP filings 345 source blocks
Verbatim excerpts from supporting DRP filings, which may concern the firm or advisory affiliates. Amounts retain their filed labels; no total or attribution is inferred.
criminal · block 1PDF pages 82–83
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 4539685 This advisory affiliate is a Firm an Individual Registered: Yes No Name: RYAN, JORDIN (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 01/16/2018 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 18RO00532-OM C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 2PDF pages 83–84
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 6425620 This advisory affiliate is a Firm an Individual Registered: Yes No Name: JOHNSON, CHRISTOPHER, RYAN (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 07/24/2017 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 17CF000732AXYX C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 3PDF pages 84–85
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 6702837 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Shannon, Joseph, James (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 04/19/2018 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 18119854701 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 4PDF pages 85–86
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 5083497 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Hardison, Don (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 03/15/2019 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 19-F-002894 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 5PDF pages 86–87
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7123121 This advisory affiliate is a Firm an Individual Registered: Yes No Name: DeForest, Johnny, Leo (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 12/20/2019 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 165764901010 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 6PDF pages 87–89
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 5963338 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Moas, Anthony (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 11/17/2016 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 16MM03360 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
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criminal · block 7PDF pages 89–90
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7144770 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Alonge, Matthew, V (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 11/01/2017 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). S 2017 002086 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 8PDF pages 90–91
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 3057970 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Georger, F, D (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 08/19/2020 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 01092-2020 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 9PDF pages 91–92
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 6058239 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Larson, Jessica (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 11/18/2020 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). S 2020 889 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 10PDF pages 92–93
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7210696 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Johnson, Douglas, Paul (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 12/03/2019 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). CR2019-154766-001 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 11PDF pages 93–94
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7060159 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Jones, Cedric, A (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 10/11/2016 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). CR16M03255-01 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 12PDF pages 95–96
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7158402 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Walker, Dylan, Powell (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 12/05/2016 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). E10030808 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 13PDF pages 96–97
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7444151 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Shiroglazov, Egor (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 05/29/2019 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 1951CR000787 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 14PDF pages 97–98
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 5645469 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Rakosky, Edward, G (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 11/29/2021 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). LAXSA105588-01 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 15PDF pages 98–99
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 5863945 This advisory affiliate is a Firm an Individual Registered: Yes No Name: REEMSNYDER, TAYLOR, L (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 05/08/2021 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 2021MM003678ASB C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 16PDF pages 99–100
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7368308 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Grant, John, Charles (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 10/07/2016 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). ST-16-CR-2066 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 17PDF pages 100–102
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: ( ) g p 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7368308 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Grant, John, Charles (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 08/17/2018 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 20180610166704 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 18PDF pages 102–103
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7565452 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Hawkins, Riley, Wayne (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 07/08/2018 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). ( ) p g ( ) p yp g ) D1803294 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 19PDF pages 103–104
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7608512 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Sesko, Stephen, Matthew (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not g ( ) g g g y y ( ) g the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 04/30/2022 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). S 2022 167 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 20PDF pages 104–105
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7616396 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Dierking, Robert, H (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 05/13/2021 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). CM2021000857 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 21PDF pages 105–106
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 6020507 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Barnett, Ryan (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 12/02/2017 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). M-0751-CR-2017029887 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 22PDF pages 106–107
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7486345 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Burt, Austin, S (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 03/20/2022 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 88059284410509 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 23PDF pages 107–109
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 6276718 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Gadonneix, Eric (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 12/02/2017 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 17-12-14789 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 24PDF pages 109–110
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 6985731 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Schmierer, Rebekah, Gaoping (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 03/21/2023 Exact Explanation p If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). S 1102 2023 00200 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 25PDF pages 110–111
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7639654 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Schofield, Christopher, J (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 11/12/2016 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). CR2017-145883-001 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 26PDF pages 111–112
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7662649 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Burke, John (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 02/03/2018 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). JC2018110589 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 27PDF pages 112–113
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7679094 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Smith, Simon, Brinton (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 03/20/2017 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). CR2017-113077-001 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 28PDF pages 113–114
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7368543 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Salerno, Salvatore (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 09/20/2019 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). CR 2019019776 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 29PDF pages 115–116
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7692960 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Chestnut, Daniel, Monroe (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 11/11/2020 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 20000802CFAXMX C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 30PDF pages 116–117
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7692960 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Chestnut, Daniel, Monroe (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 11/18/2021 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 2021 CF 001130 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 31PDF pages 117–118
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7624164 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Marks, Zachary, A (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 01/03/2018 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 054289 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 32PDF pages 118–119
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7608512 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Sesko, Stephen, Matthew (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 12/23/2023 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). S 2023 1058 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 33PDF pages 119–120
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7476759 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Solarin, Victor (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 01/16/2017 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 2017CRB00218 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 34PDF pages 120–122
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7628127 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Harris, Daniel, M (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 12/25/2017 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 17014670CF10A C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 35PDF pages 122–123
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 5544877 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Saint-Clair, Naromie (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 05/23/2019 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 1801CR006257 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 36PDF pages 123–124
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7501649 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Barrera, Jose, Augusto (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 05/11/2024 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 2024012574 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 37PDF pages 124–125
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 6904553 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Moore, Richard, Earl (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 07/14/2024 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 32-2024-04760 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 38PDF pages 125–126
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7922325 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Wise, Jeffrey, Nichols (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 08/02/2020 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). J0301CF2021000108 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 39PDF pages 126–127
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7630920 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Vincent, Jay (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 07/24/2019 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). GLO-19-000568 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 40PDF pages 127–129
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7466531 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Randazzo, Paul, Joseph (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 10/02/2024 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 0905S2024001009 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 41PDF pages 129–130
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 6174159 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Settler, Kevin (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 10/23/2023 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 23100567 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 42PDF pages 130–131
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7991658 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Lopez Gutierrez, Oscar, Edwin (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 11/22/2021 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 2021CF003167AX C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 43PDF pages 131–132
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7490523 This advisory affiliate is a Firm an Individual Registered: Yes No Name: MACARENO, MIGUEL, ANGEL (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 11/23/2016 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 16-12-14011 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 44PDF pages 132–133
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 5939821 This advisory affiliate is a Firm an Individual Registered: Yes No Name: PAWLAK, JEREMY, JOSEPH (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 12/30/2024 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 25-1-06077-9 SEA C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 45PDF pages 133–134
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7964630 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Peterson, Evan, Patrick (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 10/31/2022 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). S 2022 58 1305 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 46PDF pages 135–136
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 5467114 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Short, Corey, David (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): 01/13/2018 Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 18-T-3624 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 47PDF pages 136–137
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 8036271 This advisory affiliate is a Firm an Individual Registered: Yes No Name: do nguyen, christopher (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 11/03/2021 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). CR-2022-01899-E C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 48PDF pages 137–138
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 8048467 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Adams, Irie, M (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 10/08/2019 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 1593-2019 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 49PDF pages 138–139
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7699500 This advisory affiliate is a Firm an Individual Registered: Yes No Name: puga, pete (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 05/25/2024 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). MCM2024-000442 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 50PDF pages 139–140
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 5953538 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Hyres, Matthew, C (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 03/18/2023 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 2303010193 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 51PDF pages 140–142
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 8036352 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Eggeling, Caden (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 10/09/2021 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 216M-MU00171 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 52PDF pages 142–143
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 8067781 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Lowry, William, Anthony (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 06/25/2018 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 18001038CTMA C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 53PDF pages 143–144
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7124695 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Rahner, Victor (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 10/12/2022 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). CF2201704 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 54PDF pages 144–145
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 8067762 This advisory affiliate is a Firm an Individual Registered: Yes No Name: DEMKOWICZ, MATEUSZ, KAZIMIERZ (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 05/01/2024 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). S 2024 000843 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 55PDF pages 145–146
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 8153886 This advisory affiliate is a Firm an Individual Registered: Yes No Name: adams, brock, A (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 05/21/2020 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 20CR208139-910 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 56PDF pages 146–147
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7679043 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Johnson, Brandon (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 12/08/2025 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 50-25015389-01 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 57PDF pages 147–149
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7459391 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Dressler, Joseph, H (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 01/04/2026 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). JC2026101769 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 58PDF pages 149–150
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 6722473 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Halliburton, Jason, Anthony (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 04/23/2026 Exact Explanation p If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 26CR000257 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 59PDF pages 150–151
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 6722473 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Halliburton, Jason, Anthony (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 04/23/2026 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 26CR000258 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 60PDF pages 151–152
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 8228652 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Sunday, Tyvan, Isaac (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 05/06/2017 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 17-05599-CF C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 61PDF pages 152–153
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7309937 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Penna, Anthony, C (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 01/15/2017 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 0288S2017000067 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 62PDF pages 153–154
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 2589671 This advisory affiliate is a Firm an Individual Registered: Yes No Name: RUNFOLA, JENNIFER, REBECCA (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 05/07/2026 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 57761 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 63PDF pages 155–156
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7679094 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Smith, Simon, Brinton (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 04/25/2026 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 26HF1099 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 64PDF pages 156–157
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 6959779 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Whyte, Glyn (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 06/01/2026 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 26OS15019 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 65PDF pages 157–158
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7643470 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Brockwell, John, Wright (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 04/18/2020 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). GC20000713-00 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 66PDF pages 158–159
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7639653 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Venegas, Arnulfo (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 09/22/2018 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). 181000205 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.)
criminal · block 67PDF pages 159–161
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.A. or 11.B. of Form ADV. Criminal Check item(s) being responded to: 11.A(1) 11.A(2) 11.B(1) 11.B(2) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. Multiple counts of the same charge arising out of the same event(s) should be reported on the same DRP. Unrelated criminal actions, including separate cases arising out of the same event, must be reported on separate DRPs. Use this DRP to report all charges arising out of the same event. One event may result in more than one affirmative answer to the items listed above. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 6348147 This advisory affiliate is a Firm an Individual Registered: Yes No Name: PIERCE, JASON, EDWARD (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. If charge(s) were brought against an organization over which you or an advisory affiliate exercise(d) control: Enter organization name, whether or not the organization was an investment-related business and your or the advisory affiliate's position, title, or relationship. 2. Formal Charge(s) were brought in: (include name of Federal, Military, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case number). 3. Event Disclosure Detail (Use this for both organizational and individual charges.) A. Date First Charged (MM/DD/YYYY): 07/20/2026 Exact Explanation If not exact, provide explanation: B. Event Disclosure Detail (include Charge(s)/Charge Description(s), and for each charge provide: (1) number of counts, (2) felony or misdemeanor, (3) plea for each charge, and (4) product type if charge is investment-related). CP-15-CR-0001644-2026 C. Did any of the Charge(s) within the Event involve a felony? Yes No D. Current status of the Event? Pending On Appeal Final E. Event Status Date (complete unless status is Pending) (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Disposition Disclosure Detail: Include for each charge (a) Disposition Type (e.g., convicted, acquitted, dismissed, pretrial, etc.), (b) Date, (c) Sentence/Penalty, (d) Duration (if sentence - suspension, probation, etc.), (e) Start Date of Penalty, (f) Penalty/Fine Amount, and (g) Date Paid. 5. Provide a brief summary of circumstances leading to the charge(s) as well as the disposition. Include the relevant dates when the conduct which was the subject of the charge(s) occurred. (Your response must fit within the space provided.) DRP Pages
regulatory · block 1PDF pages 161–162
- Regulator name — filed text
- NEBRASKA DEPARTMENT OF BANKING & FINANCE
- Monetary/Fine Amount — filed text
- $ 251,760.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
UNDER THE TERMS OF THE SETTLEMENT, MLPFS AGREED TO CERTAIN UNDERTAKINGS, INCLUDING ESTABLISHING AND MAINTAINING A TRADE MONITORING SYSTEM AND FILING A REPORT WITH THE DEPARTMENT DESCRIBING CERTAIN MONITORING IMPROVEMENTS.
Other filed details
Description of allegations — filed text
THE NEBRASKA DEPARTMENT OF BANKING & FINANCE (DEPARTMENT) ALLEGED THAT IN CONNECTION WITH THE SALE OF SECURITIES IN NEBRASKA BY CERTAIN MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS) CLIENT ASSOCIATES (CAS) WHO WERE NOT REGISTERED IN NEBRASKA, MLPFS FAILED TO ESTABLISH AN ADEQUATE SYSTEM TO MONITOR THE REGISTRATION STATUS OF PERSONS ACCEPTING CLIENT ORDERS, WHICH CONSTITUTED A FAILURE TO ESTABLISH A REASONABLY DESIGNED SUPERVISORY SYSTEM, AND TO REQUIRE ITS CAS TO BE REGISTERED IN THE APPROPRIATE JURISDICTIONS, WHICH CONSTITUTED A FAILURE TO ENFORCE ITS ESTABLISHED WRITTEN PROCEDURES, IN VIOLATION OF NEB. REV. STAT. §81103(9)(A)(XI) AND SOLD SECURITIES IN NEBRASKA THROUGH UNREGISTERED CAS IN VIOLATION OF NEB. REV. STAT. §81103(1).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, MLPFS ENTERED INTO A SETTLEMENT WITH THE DEPARTMENT, IN WHICH IT AGREED TO A REPRIMAND, TO CEASE AND DESIST FROM ENGAGING IN THE SALE OF SECURITIES IN NEBRASKA THROUGH UNREGISTERED AGENTS, AND TO COMPLY WITH CERTAIN UNDERTAKINGS. MLPFS AGREED TO PAY THE DEPARTMENT $251,760.00, AS PART OF A TOTAL PAYMENT, CONSISTING OF FINES, PENALTIES AND ANY OTHER MONETARY SANCTIONS, OF $26,563,094.50 THAT WILL BE ALLOCATED AMONG THE 50 STATES, THE DISTRICT OF COLUMBIA, PUERTO RICO, AND THE U.S. VIRGIN ISLANDS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) NEBRASKA DEPARTMENT OF BANKING & FINANCE 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CEASE AND DESIST; REPRIMAND; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 09/12/2011 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: N/A 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: SALE OF SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE NEBRASKA DEPARTMENT OF BANKING & FINANCE (DEPARTMENT) ALLEGED THAT IN CONNECTION WITH THE SALE OF SECURITIES IN NEBRASKA BY CERTAIN MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS) CLIENT ASSOCIATES (CAS) WHO WERE NOT REGISTERED IN NEBRASKA, MLPFS FAILED TO ESTABLISH AN ADEQUATE SYSTEM TO MONITOR THE REGISTRATION STATUS OF PERSONS ACCEPTING CLIENT ORDERS, WHICH CONSTITUTED A FAILURE TO ESTABLISH A REASONABLY DESIGNED SUPERVISORY SYSTEM, AND TO REQUIRE ITS CAS TO BE REGISTERED IN THE APPROPRIATE JURISDICTIONS, WHICH CONSTITUTED A FAILURE TO ENFORCE ITS ESTABLISHED WRITTEN PROCEDURES, IN VIOLATION OF NEB. REV. STAT. §81103(9)(A)(XI) AND SOLD SECURITIES IN NEBRASKA THROUGH UNREGISTERED CAS IN VIOLATION OF NEB. REV. STAT. §81103(1). 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Consent 11. Resolution Date (MM/DD/YYYY): 09/12/2011 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 251,760.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: REPRIMAND. UNDERTAKINGS. Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, MLPFS ENTERED INTO A SETTLEMENT WITH THE DEPARTMENT, IN WHICH IT AGREED TO A REPRIMAND, TO CEASE AND DESIST FROM ENGAGING IN THE SALE OF SECURITIES IN NEBRASKA THROUGH UNREGISTERED AGENTS, AND TO COMPLY WITH CERTAIN UNDERTAKINGS. MLPFS AGREED TO PAY THE DEPARTMENT $251,760.00, AS PART OF A TOTAL PAYMENT, CONSISTING OF FINES, PENALTIES AND ANY OTHER MONETARY SANCTIONS, OF $26,563,094.50 THAT WILL BE ALLOCATED AMONG THE 50 STATES, THE DISTRICT OF COLUMBIA, PUERTO RICO, AND THE U.S. VIRGIN ISLANDS. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). UNDER THE TERMS OF THE SETTLEMENT, MLPFS AGREED TO CERTAIN UNDERTAKINGS, INCLUDING ESTABLISHING AND MAINTAINING A TRADE MONITORING SYSTEM AND FILING A REPORT WITH THE DEPARTMENT DESCRIBING CERTAIN MONITORING IMPROVEMENTS.
regulatory · block 2PDF pages 162–164
- Regulator name — filed text
- WEST VIRGINIA SECURITIES COMMISSION
- Monetary/Fine Amount — filed text
- $ 417,760.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
UNDER THE TERMS OF THE SETTLEMENT, MLPFS AGREED TO CERTAIN UNDERTAKINGS, INCLUDING ESTABLISHING AND MAINTAINING A TRADE MONITORING SYSTEM AND FILING A REPORT WITH THE COMMISSION DESCRIBING CERTAIN MONITORING IMPROVEMENTS.
Other filed details
Description of allegations — filed text
THE WEST VIRGINIA SECURITIES COMMISSION (COMMISSION) ALLEGED THAT IN CONNECTION WITH THE SALE OF SECURITIES IN WEST VIRGINIA BY CERTAIN MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS) CLIENT ASSOCIATES (CAS) WHO WERE NOT REGISTERED IN WEST VIRGINIA, MLPFS FAILED TO ESTABLISH AN ADEQUATE SYSTEM TO MONITOR THE REGISTRATION STATUS OF PERSONS ACCEPTING CLIENT ORDERS, WHICH CONSTITUTED A FAILURE TO REASONABLY SUPERVISE IN VIOLATION OF WEST VIRGINIA CODE §322204(A)(J), FAILED TO REQUIRE ITS CAS TO BE REGISTERED IN THE APPROPRIATE JURISDICTIONS, WHICH CONSTITUTED A FAILURE TO ENFORCE ITS ESTABLISHED WRITTEN PROCEDURES, AND SOLD SECURITIES IN WEST VIRGINIA THROUGH UNREGISTERED CAS IN VIOLATION OF WEST VIRGINIA CODE §322201(A).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, MLPFS ENTERED INTO A SETTLEMENT WITH THE COMMISSION, IN WHICH IT AGREED TO A REPRIMAND, TO CEASE AND DESIST FROM ENGAGING IN THE SALE OF SECURITIES IN WEST VIRGINIA THROUGH UNREGISTERED AGENTS, AND TO COMPLY WITH CERTAIN UNDERTAKINGS. MLPFS AGREED TO PAY THE COMMISSION $417,760.00, AS PART OF A TOTAL PAYMENT, CONSISTING OF FINES, PENALTIES AND ANY OTHER MONETARY SANCTIONS, OF $26,563,094.50 THAT WILL BE ALLOCATED AMONG THE 50 STATES, THE DISTRICT OF COLUMBIA, PUERTO RICO, AND THE U.S. VIRGIN ISLANDS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) WEST VIRGINIA SECURITIES COMMISSION 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CEASE AND DESIST; REPRIMAND; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 08/31/2011 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 81-7691 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: SALE OF SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE WEST VIRGINIA SECURITIES COMMISSION (COMMISSION) ALLEGED THAT IN CONNECTION WITH THE SALE OF SECURITIES IN WEST VIRGINIA BY CERTAIN MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS) CLIENT ASSOCIATES (CAS) WHO WERE NOT REGISTERED IN WEST VIRGINIA, MLPFS FAILED TO ESTABLISH AN ADEQUATE SYSTEM TO MONITOR THE REGISTRATION STATUS OF PERSONS ACCEPTING CLIENT ORDERS, WHICH CONSTITUTED A FAILURE TO REASONABLY SUPERVISE IN VIOLATION OF WEST VIRGINIA CODE §322204(A)(J), FAILED TO REQUIRE ITS CAS TO BE REGISTERED IN THE APPROPRIATE JURISDICTIONS, WHICH CONSTITUTED A FAILURE TO ENFORCE ITS ESTABLISHED WRITTEN PROCEDURES, AND SOLD SECURITIES IN WEST VIRGINIA THROUGH UNREGISTERED CAS IN VIOLATION OF WEST VIRGINIA CODE §322201(A). 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Consent 11. Resolution Date (MM/DD/YYYY): 08/31/2011 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 417,760.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: REPRIMAND. UNDERTAKINGS. Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, MLPFS ENTERED INTO A SETTLEMENT WITH THE COMMISSION, IN WHICH IT AGREED TO A REPRIMAND, TO CEASE AND DESIST FROM ENGAGING IN THE SALE OF SECURITIES IN WEST VIRGINIA THROUGH UNREGISTERED AGENTS, AND TO COMPLY WITH CERTAIN UNDERTAKINGS. MLPFS AGREED TO PAY THE COMMISSION $417,760.00, AS PART OF A TOTAL PAYMENT, CONSISTING OF FINES, PENALTIES AND ANY OTHER MONETARY SANCTIONS, OF $26,563,094.50 THAT WILL BE ALLOCATED AMONG THE 50 STATES, THE DISTRICT OF COLUMBIA, PUERTO RICO, AND THE U.S. VIRGIN ISLANDS. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). UNDER THE TERMS OF THE SETTLEMENT, MLPFS AGREED TO CERTAIN UNDERTAKINGS, INCLUDING ESTABLISHING AND MAINTAINING A TRADE MONITORING SYSTEM AND FILING A REPORT WITH THE COMMISSION DESCRIBING CERTAIN MONITORING IMPROVEMENTS.
regulatory · block 3PDF pages 164–166
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 1,000,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE THE FIRM IS CENSURED AND FINED $1,000,000.
Other filed details
Description of allegations — filed text
THE FIRM FAILED TO HAVE A SUPERVISORY SYSTEM, TO ENSURE THAT ALL EMPLOYEE/EMPLOYEE-INTERESTED ACCOUNTS WERE MONITORED AND REVIEWED FOR MISCONDUCT. THE EMPLOYEE ACTIVITY REVIEW SYSTEM (EARS) WAS THE FIRM'S PRIMARY MEANS OF MONITORING EMPLOYEE ACCOUNT ACTIVITIES. EARS AUTOMATICALLY CAPTURED ACCOUNTS OPENED BY EMPLOYEES WHO WERE USING THEIR SOCIAL SECURITY NUMBERS AS THE PRIMARY TAX IDENTIFICATION NUMBER. HOWEVER, IF THE EMPLOYEE'S SOCIAL SECURITY NUMBER OR TAX IDENTIFICATION NUMBER WAS NOT THE PRIMARY NUMBER, EARS FAILED TO AUTOMATICALLY CAPTURE THE ACCOUNT IN ITS DATABASE. IN THESE INSTANCES THE FIRM RELIED SOLELY ON ITS EMPLOYEES TO INPUT THEIR ACCOUNTS INTO EARS. A SIGNIFICANT NUMBER OF EMPLOYEES EITHER DID NOT REPORT SUCH ACCOUNTS OR DID NOT DO SO IN A TIMELY MANNER AND AS A RESULT, A SIGNIFICANT NUMBER OF EMPLOYEE/EMPLOYEE-INTERESTED ACCOUNTS FAILED TO BE MONITORED IN EARS. THE FIRM ALSO FAILED TO ESTABLISH, MAINTAIN AND ENFORCE WRITTEN PROCEDURES TO ADEQUATELY SUPERVISE A REGISTERED REPRESENTATIVE (RR). FROM APRIL 2007 TO JUNE 2008, THE RR USED A BUSINESS ACCOUNT HE OPENED AT THE FIRM TO IMPLEMENT A FRAUDULENT SCHEME. THE RR COMPLETED THE NEW ACCOUNT DOCUMENTATION AND SUBMITTED THE COMPANY PARTNERSHIP AGREEMENT TO THE FIRM, AS REQUIRED BY FIRM POLICY. HOWEVER, THE FIRM'S PROCEDURES FAILED TO REQUIRE A SUPERVISORY REVIEW OF THE COMPANY PARTNERSHIP AGREEMENT PRIOR TO APPROVAL OF THE ACCOUNT. THE FIRM APPROVED THE OPENING OF THE BUSINESS ACCOUNT, DESIGNATING THE ACCOUNT AS AN EMPLOYEE ACCOUNT BUT THE ACCOUNT WAS NOT AUTOMATICALLY INCLUDED IN EARS AND THE RR DID NOT DISCLOSE IT ON EARS, DESPITE BEING TOLD TO DO SO. THE FIRM FAILED TO REQUIRE ITS SUPERVISORS TO REVIEW EARS AFTER APPROVING THE OPENING OF AN ACCOUNT TO ENSURE THAT THE EMPLOYEE REPORTED THE ACCOUNT ON THE SYSTEM. THE FIRM ALSO FAILED TO HAVE WRITTEN PROCEDURES THAT REQUIRED A SUPERVISOR TO VERIFY THE APPROVAL OF OUTSIDE BUSINESS ACTIVITY BEFORE AUTHORIZING THE OPENING OF AN ACCOUNT BY AN EMPLOYEE FOR BUSINESS. HAD THE FIRM ESTABLISHED SUCH A PROCEDURE, IT WOULD HAVE DISCOVERED THAT THE RR NEVER OBTAINED FIRM APPROVAL FOR HIS OUTSIDE BUSINESS ACTIVITIES.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE THE FIRM IS CENSURED AND FINED $1,000,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 10/04/2011 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2008013990502 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE FIRM FAILED TO HAVE A SUPERVISORY SYSTEM, TO ENSURE THAT ALL EMPLOYEE/EMPLOYEE-INTERESTED ACCOUNTS WERE MONITORED AND REVIEWED FOR MISCONDUCT. THE EMPLOYEE ACTIVITY REVIEW SYSTEM (EARS) WAS THE FIRM'S PRIMARY MEANS OF MONITORING EMPLOYEE ACCOUNT ACTIVITIES. EARS AUTOMATICALLY CAPTURED ACCOUNTS OPENED BY EMPLOYEES WHO WERE USING THEIR SOCIAL SECURITY NUMBERS AS THE PRIMARY TAX IDENTIFICATION NUMBER. HOWEVER, IF THE EMPLOYEE'S SOCIAL SECURITY NUMBER OR TAX IDENTIFICATION NUMBER WAS NOT THE PRIMARY NUMBER, EARS FAILED TO AUTOMATICALLY CAPTURE THE ACCOUNT IN ITS DATABASE. IN THESE INSTANCES THE FIRM RELIED SOLELY ON ITS EMPLOYEES TO INPUT THEIR ACCOUNTS INTO EARS. A SIGNIFICANT NUMBER OF EMPLOYEES EITHER DID NOT REPORT SUCH ACCOUNTS OR DID NOT DO SO IN A TIMELY MANNER AND AS A RESULT, A SIGNIFICANT NUMBER OF EMPLOYEE/EMPLOYEE-INTERESTED ACCOUNTS FAILED TO BE MONITORED IN EARS. THE FIRM ALSO FAILED TO ESTABLISH, MAINTAIN AND ENFORCE WRITTEN PROCEDURES TO ADEQUATELY SUPERVISE A REGISTERED REPRESENTATIVE (RR). FROM APRIL 2007 TO JUNE 2008, THE RR USED A BUSINESS ACCOUNT HE OPENED AT THE FIRM TO IMPLEMENT A FRAUDULENT SCHEME. THE RR COMPLETED THE NEW ACCOUNT DOCUMENTATION AND SUBMITTED THE COMPANY PARTNERSHIP AGREEMENT TO THE FIRM, AS REQUIRED BY FIRM POLICY. HOWEVER, THE FIRM'S PROCEDURES FAILED TO REQUIRE A SUPERVISORY REVIEW OF THE COMPANY PARTNERSHIP AGREEMENT PRIOR TO APPROVAL OF THE ACCOUNT. THE FIRM APPROVED THE OPENING OF THE BUSINESS ACCOUNT, DESIGNATING THE ACCOUNT AS AN EMPLOYEE ACCOUNT BUT THE ACCOUNT WAS NOT AUTOMATICALLY INCLUDED IN EARS AND THE RR DID NOT DISCLOSE IT ON EARS, DESPITE BEING TOLD TO DO SO. THE FIRM FAILED TO REQUIRE ITS SUPERVISORS TO REVIEW EARS AFTER APPROVING THE OPENING OF AN ACCOUNT TO ENSURE THAT THE EMPLOYEE REPORTED THE ACCOUNT ON THE SYSTEM. THE FIRM ALSO FAILED TO HAVE WRITTEN PROCEDURES THAT REQUIRED A SUPERVISOR TO VERIFY THE APPROVAL OF OUTSIDE BUSINESS ACTIVITY BEFORE AUTHORIZING THE OPENING OF AN ACCOUNT BY AN EMPLOYEE FOR BUSINESS. HAD THE FIRM ESTABLISHED SUCH A PROCEDURE, IT WOULD HAVE DISCOVERED THAT THE RR NEVER OBTAINED FIRM APPROVAL FOR HIS OUTSIDE BUSINESS ACTIVITIES. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 10/04/2011 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 1,000,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: IN DETERMINING THE APPROPRIATE SANCTION IN THIS MATTER, FINRA TOOK INTO CONSIDERATION THE FIRM'S DISCOVERY OF THE RR'S MISCONDUCT AND THE REMEDIAL STEPS THE FIRM TOOK TO ADDRESS IT, INCLUDING ITS REPAYMENT IN FULL TO INVESTORS WHO WERE HARMED BY THE MISCONDUCT AND THE TRANSITION OF ACCOUNTS TO A NEW SYSTEM. Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE THE FIRM IS CENSURED AND FINED $1,000,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE THE FIRM IS CENSURED AND FINED $1,000,000.
regulatory · block 4PDF pages 166–168
- Regulator name — filed text
- SOUTH DAKOTA DEPARTMENT OF LABOR & REGULATION, DIVISION OF SECURITIES
- Monetary/Fine Amount — filed text
- $ 418,500.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
UNDER THE TERMS OF THE SETTLEMENT, MLPFS AGREED TO CERTAIN UNDERTAKINGS, INCLUDING ESTABLISHING AND MAINTAINING A TRADE MONITORING SYSTEM AND FILING A REPORT WITH THE DIVISION DESCRIBING CERTAIN MONITORING IMPROVEMENTS.
Other filed details
Description of allegations — filed text
THE SOUTH DAKOTA DEPARTMENT OF LABOR & REGULATION, DIVISION OF SECURITIES (DIVISION), ALLEGED THAT IN CONNECTION WITH THE SALE OF SECURITIES IN SOUTH DAKOTA BY CERTAIN MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS) CLIENT ASSOCIATES (CAS) WHO WERE NOT REGISTERED IN SOUTH DAKOTA, MLPFS FAILED TO ESTABLISH AN ADEQUATE SYSTEM TO MONITOR THE REGISTRATION STATUS OF PERSONS ACCEPTING CLIENT ORDERS, WHICH CONSTITUTED A VIOLATION OF ARSD 20:08:03:08 FOR FAILURE TO ESTABLISH A REASONABLY DESIGNED SUPERVISORY SYSTEM AND A FAILURE TO ENFORCE REASONABLY DESIGNED PROCEDURES, FAILED TO REQUIRE ITS CAS TO BE REGISTERED IN THE APPROPRIATE JURISDICTIONS, WHICH CONSTITUTED A FAILURE TO ENFORCE ITS ESTABLISHED WRITTEN PROCEDURES, AND SOLD SECURITIES IN SOUTH DAKOTA THROUGH UNREGISTERED CAS.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, MLPFS ENTERED INTO A SETTLEMENT WITH THE DIVISION, IN WHICH IT AGREED TO CEASE AND DESIST FROM ENGAGING IN THE SALE OF SECURITIES IN SOUTH DAKOTA THROUGH UNREGISTERED AGENTS AND TO COMPLY WITH CERTAIN UNDERTAKINGS. MLPFS AGREED TO PAY THE DIVISION $418,500.00, AS PART OF A TOTAL PAYMENT, CONSISTING OF FINES, PENALTIES AND ANY OTHER MONETARY SANCTIONS, OF $26,563,094.50 THAT WILL BE ALLOCATED AMONG THE 50 STATES, THE DISTRICT OF COLUMBIA, PUERTO RICO, AND THE U.S. VIRGIN ISLANDS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) SOUTH DAKOTA DEPARTMENT OF LABOR & REGULATION, DIVISION OF SECURITIES 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CEASE AND DESIST; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 10/21/2011 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: SALE OF SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE SOUTH DAKOTA DEPARTMENT OF LABOR & REGULATION, DIVISION OF SECURITIES (DIVISION), ALLEGED THAT IN CONNECTION WITH THE SALE OF SECURITIES IN SOUTH DAKOTA BY CERTAIN MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS) CLIENT ASSOCIATES (CAS) WHO WERE NOT REGISTERED IN SOUTH DAKOTA, MLPFS FAILED TO ESTABLISH AN ADEQUATE SYSTEM TO MONITOR THE REGISTRATION STATUS OF PERSONS ACCEPTING CLIENT ORDERS, WHICH CONSTITUTED A VIOLATION OF ARSD 20:08:03:08 FOR FAILURE TO ESTABLISH A REASONABLY DESIGNED SUPERVISORY SYSTEM AND A FAILURE TO ENFORCE REASONABLY DESIGNED PROCEDURES, FAILED TO REQUIRE ITS CAS TO BE REGISTERED IN THE APPROPRIATE JURISDICTIONS, WHICH CONSTITUTED A FAILURE TO ENFORCE ITS ESTABLISHED WRITTEN PROCEDURES, AND SOLD SECURITIES IN SOUTH DAKOTA THROUGH UNREGISTERED CAS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Consent 11. Resolution Date (MM/DD/YYYY): 10/21/2011 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 418,500.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKINGS. Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, MLPFS ENTERED INTO A SETTLEMENT WITH THE DIVISION, IN WHICH IT AGREED TO CEASE AND DESIST FROM ENGAGING IN THE SALE OF SECURITIES IN SOUTH DAKOTA THROUGH UNREGISTERED AGENTS AND TO COMPLY WITH CERTAIN UNDERTAKINGS. MLPFS AGREED TO PAY THE DIVISION $418,500.00, AS PART OF A TOTAL PAYMENT, CONSISTING OF FINES, PENALTIES AND ANY OTHER MONETARY SANCTIONS, OF $26,563,094.50 THAT WILL BE ALLOCATED AMONG THE 50 STATES, THE DISTRICT OF COLUMBIA, PUERTO RICO, AND THE U.S. VIRGIN ISLANDS. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). UNDER THE TERMS OF THE SETTLEMENT, MLPFS AGREED TO CERTAIN UNDERTAKINGS, INCLUDING ESTABLISHING AND MAINTAINING A TRADE MONITORING SYSTEM AND FILING A REPORT WITH THE DIVISION DESCRIBING CERTAIN MONITORING IMPROVEMENTS.
regulatory · block 5PDF pages 168–170
- Regulator name — filed text
- DISTRICT OF COLUMBIA, DEPARTMENT OF INSURANCE, SECURITIES AND BANKING
- Monetary/Fine Amount — filed text
- $ 434,215.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
UNDER THE TERMS OF THE SETTLEMENT, MLPFS AGREED TO CERTAIN UNDERTAKINGS, INCLUDING ESTABLISHING AND MAINTAINING A TRADE MONITORING SYSTEM AND FILING A REPORT WITH THE DEPARTMENT DESCRIBING CERTAIN MONITORING IMPROVEMENTS.
Other filed details
Description of allegations — filed text
THE DISTRICT OF COLUMBIA, DEPARTMENT OF INSURANCE, SECURITIES AND BANKING (DEPARTMENT) ALLEGED THAT IN CONNECTION WITH THE SALE OF SECURITIES IN THE DISTRICT OF COLUMBIA BY CERTAIN MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS) CLIENT ASSOCIATES (CAS) WHO WERE NOT REGISTERED IN THE DISTRICT OF COLUMBIA, MLPFS FAILED TO ESTABLISH AN ADEQUATE SYSTEM TO MONITOR THE REGISTRATION STATUS OF PERSONS ACCEPTING CLIENT ORDERS, WHICH CONSTITUTED A FAILURE TO REASONABLY SUPERVISE, FAILED TO REQUIRE ITS CAS TO BE REGISTERED IN THE APPROPRIATE JURISDICTIONS, WHICH CONSTITUTED A FAILURE TO ENFORCE ITS ESTABLISHED WRITTEN PROCEDURES, AND SOLD SECURITIES IN THE DISTRICT OF COLUMBIA THROUGH UNREGISTERED CAS.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, MLPFS ENTERED INTO A SETTLEMENT WITH THE DEPARTMENT, IN WHICH IT AGREED TO A REPRIMAND, TO CEASE AND DESIST FROM ENGAGING IN THE SALE OF SECURITIES IN THE DISTRICT OF COLUMBIA THROUGH UNREGISTERED AGENTS, AND TO COMPLY WITH CERTAIN UNDERTAKINGS. MLPFS AGREED TO PAY THE DEPARTMENT $434,215.00, AS PART OF A TOTAL PAYMENT, CONSISTING OF FINES, PENALTIES AND ANY OTHER MONETARY SANCTIONS, OF $26,563,094.50 THAT WILL BE ALLOCATED AMONG THE 50 STATES, THE DISTRICT OF COLUMBIA, PUERTO RICO, AND THE U.S. VIRGIN ISLANDS. A CHECK FOR THE AMOUNT OF $434,215.00 WAS PAID TO THE DISTRICT OF COLUMBIA ON 10-26-2011.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) DISTRICT OF COLUMBIA, DEPARTMENT OF INSURANCE, SECURITIES AND BANKING 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CEASE AND DESIST; UNDERTAKING; REPRIMAND 3. Date Initiated (MM/DD/YYYY): 10/24/2011 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: SB-CO-09-11 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: SALE OF SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE DISTRICT OF COLUMBIA, DEPARTMENT OF INSURANCE, SECURITIES AND BANKING (DEPARTMENT) ALLEGED THAT IN CONNECTION WITH THE SALE OF SECURITIES IN THE DISTRICT OF COLUMBIA BY CERTAIN MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS) CLIENT ASSOCIATES (CAS) WHO WERE NOT REGISTERED IN THE DISTRICT OF COLUMBIA, MLPFS FAILED TO ESTABLISH AN ADEQUATE SYSTEM TO MONITOR THE REGISTRATION STATUS OF PERSONS ACCEPTING CLIENT ORDERS, WHICH CONSTITUTED A FAILURE TO REASONABLY SUPERVISE, FAILED TO REQUIRE ITS CAS TO BE REGISTERED IN THE APPROPRIATE JURISDICTIONS, WHICH CONSTITUTED A FAILURE TO ENFORCE ITS ESTABLISHED WRITTEN PROCEDURES, AND SOLD SECURITIES IN THE DISTRICT OF COLUMBIA THROUGH UNREGISTERED CAS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Consent 11. Resolution Date (MM/DD/YYYY): 10/24/2011 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 434,215.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: REPRIMAND. UNDERTAKINGS Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, MLPFS ENTERED INTO A SETTLEMENT WITH THE DEPARTMENT, IN WHICH IT AGREED TO A REPRIMAND, TO CEASE AND DESIST FROM ENGAGING IN THE SALE OF SECURITIES IN THE DISTRICT OF COLUMBIA THROUGH UNREGISTERED AGENTS, AND TO COMPLY WITH CERTAIN UNDERTAKINGS. MLPFS AGREED TO PAY THE DEPARTMENT $434,215.00, AS PART OF A TOTAL PAYMENT, CONSISTING OF FINES, PENALTIES AND ANY OTHER MONETARY SANCTIONS, OF $26,563,094.50 THAT WILL BE ALLOCATED AMONG THE 50 STATES, THE DISTRICT OF COLUMBIA, PUERTO RICO, AND THE U.S. VIRGIN ISLANDS. A CHECK FOR THE AMOUNT OF $434,215.00 WAS PAID TO THE DISTRICT OF COLUMBIA ON 10-26-2011. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). UNDER THE TERMS OF THE SETTLEMENT, MLPFS AGREED TO CERTAIN UNDERTAKINGS, INCLUDING ESTABLISHING AND MAINTAINING A TRADE MONITORING SYSTEM AND FILING A REPORT WITH THE DEPARTMENT DESCRIBING CERTAIN MONITORING IMPROVEMENTS.
regulatory · block 6PDF pages 170–172
- Regulator name — filed text
- CHICAGO MERCANTILE EXCHANGE ("CME")
- Monetary/Fine Amount — filed text
- $ 5,000.00
- How was matter resolved — filed text
- Settled
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE APPLICANT AGREED TO SETTLE THE MATTER WITH THE PAYMENT OF A FINE IN ACCORDANCE WITH THE AUTOMATIC FINE SCHEDULE.
Other filed details
Description of allegations — filed text
PURSUANT TO AN ANNUAL CTR PIT/BACK OFFICE AUDIT CONDUCTED BY THE APPLICANT'S FUTURES SRO, THE CHICAGO BOARD OF TRADE ("CBOT"), THE APPLICANT WAS FOUND TO HAVE VIOLATED CME RULE 536.F WHEN TRADE DATA REVIEWED FOR THE TRADE DATES OF AUGUST 9 AND 10, 2011 REFLECTED AN UNACCEPTABLE CTR ERROR RATE OF 37.50%.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE APPLICANT AGREED TO SETTLE THE MATTER WITH THE PAYMENT OF A FINE IN ACCORDANCE WITH THE AUTOMATIC FINE SCHEDULE.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
CHICAGO MERCANTILE EXCHANGE ("CME")
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
3.
Date Initiated (MM/DD/YYYY):
08/09/2011
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
11-08270
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Futures - Financial
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
PURSUANT TO AN ANNUAL CTR PIT/BACK OFFICE AUDIT CONDUCTED BY THE APPLICANT'S FUTURES SRO, THE CHICAGO BOARD OF TRADE ("CBOT"), THE
APPLICANT WAS FOUND TO HAVE VIOLATED CME RULE 536.F WHEN TRADE DATA REVIEWED FOR THE TRADE DATES OF AUGUST 9 AND 10, 2011
REFLECTED AN UNACCEPTABLE CTR ERROR RATE OF 37.50%.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Settled
11. Resolution Date (MM/DD/YYYY):
11/29/2011
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 5,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE APPLICANT AGREED TO SETTLE THE MATTER WITH THE PAYMENT OF A FINE IN
ACCORDANCE WITH THE AUTOMATIC FINE SCHEDULE.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE APPLICANT AGREED TO SETTLE THE MATTER WITH THE PAYMENT OF A FINE IN ACCORDANCE
WITH THE AUTOMATIC FINE SCHEDULE.regulatory · block 7PDF pages 172–174
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 500,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE IT IS CENSURED AND FINED $500,000.
Other filed details
Description of allegations — filed text
FINRA RULE 2010, NASD RULES 2110, 3010: DURING THE PERIOD 2006-2009, THE FIRM FAILED TO ESTABLISH AND ENFORCE EFFECTIVE WRITTEN SUPERVISORY PROCEDURES AND SUPERVISE ITS TOTAL RETURN SWAPS BUSINESS. BECAUSE OF ITS SUPERVISORY FAILURES, THE FIRM WAS UNABLE TO DEMONSTRATE THAT THE SWAPS WERE PROPERLY STRUCTURED AND SUPERVISED WITH PARTICULAR REGARD TO YIELD ENHANCEMENT PAYMENTS. THE FIRM FAILED TO ESTABLISH AND MAINTAIN WRITTEN SUPERVISORY PROCEDURES THAT WERE REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS. THE FIRM'S PROCEDURES WERE INADEQUATE IN SOME RESPECTS, AND IN OTHER RESPECTS WERE NOT APPROPRIATELY ENFORCED BY THE FIRM. AREAS IN WHICH THE FIRM EXHIBITED SUCH SUPERVISORY DEFICIENCIES INVOLVED THE FOLLOWING: (1) INITIAL ABSENCE OF WRITTEN PROCEDURES; (2) FAILURE TO DOCUMENT AND REVIEW EARLY TERMINATIONS, AS THE PROCEDURES REQUIRED; (3) SHORT-TERM TRANSACTIONS; AND (4) MARKET-ON-CLOSE PRICING. THE FIRM INITIALLY LACKED ANY WRITTEN PROCEDURES REGARDING ITS TOTAL RETURN SWAP PROGRAM, AND FAILED TO INSTITUTE SUCH PROCEDURES UNTIL OCTOBER 2006. IN PRACTICE, DESPITE THE GENERAL LIMITATIONS IN THE PROCEDURES, SWAPS WERE OFTEN TERMINATED EARLY. IN THE PERIOD 2006-2007, WHEN THE FIRM FAILED TO DOCUMENT AND CARRY OUT AFTER-THE-FACT REVIEW OF SWAPS THAT WERE TERMINATED EARLY, 598 SWAPS WERE OPEN FOR LESS THAN 45 DAYS AND, OF THESE, 215 WERE OPEN FOR LESS THAN 25 DAYS AND 78 FOR LESS THAN 15 DAYS. BECAUSE THE FIRM DID NOT INITIALLY HAVE WRITTEN SUPERVISORY PROCEDURES, AND BECAUSE THE FIRM FAILED TO PROVIDE THE SUPERVISORY REVIEW THAT ITS PROCEDURES SUBSEQUENTLY REQUIRED, SWAPS COULD BE OPENED AND CLOSED IN A FEW DAYS' TIME, AT PRICES THAT ALLOWED MARKET RISK TO BE MINIMIZED.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE IT IS CENSURED AND FINED $500,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 12/08/2011 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2008015717401 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: TOTAL RETURN SWAP TRANSACTIONS 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): FINRA RULE 2010, NASD RULES 2110, 3010: DURING THE PERIOD 2006-2009, THE FIRM FAILED TO ESTABLISH AND ENFORCE EFFECTIVE WRITTEN SUPERVISORY PROCEDURES AND SUPERVISE ITS TOTAL RETURN SWAPS BUSINESS. BECAUSE OF ITS SUPERVISORY FAILURES, THE FIRM WAS UNABLE TO DEMONSTRATE THAT THE SWAPS WERE PROPERLY STRUCTURED AND SUPERVISED WITH PARTICULAR REGARD TO YIELD ENHANCEMENT PAYMENTS. THE FIRM FAILED TO ESTABLISH AND MAINTAIN WRITTEN SUPERVISORY PROCEDURES THAT WERE REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS. THE FIRM'S PROCEDURES WERE INADEQUATE IN SOME RESPECTS, AND IN OTHER RESPECTS WERE NOT APPROPRIATELY ENFORCED BY THE FIRM. AREAS IN WHICH THE FIRM EXHIBITED SUCH SUPERVISORY DEFICIENCIES INVOLVED THE FOLLOWING: (1) INITIAL ABSENCE OF WRITTEN PROCEDURES; (2) FAILURE TO DOCUMENT AND REVIEW EARLY TERMINATIONS, AS THE PROCEDURES REQUIRED; (3) SHORT-TERM TRANSACTIONS; AND (4) MARKET-ON-CLOSE PRICING. THE FIRM INITIALLY LACKED ANY WRITTEN PROCEDURES REGARDING ITS TOTAL RETURN SWAP PROGRAM, AND FAILED TO INSTITUTE SUCH PROCEDURES UNTIL OCTOBER 2006. IN PRACTICE, DESPITE THE GENERAL LIMITATIONS IN THE PROCEDURES, SWAPS WERE OFTEN TERMINATED EARLY. IN THE PERIOD 2006-2007, WHEN THE FIRM FAILED TO DOCUMENT AND CARRY OUT AFTER-THE-FACT REVIEW OF SWAPS THAT WERE TERMINATED EARLY, 598 SWAPS WERE OPEN FOR LESS THAN 45 DAYS AND, OF THESE, 215 WERE OPEN FOR LESS THAN 25 DAYS AND 78 FOR LESS THAN 15 DAYS. BECAUSE THE FIRM DID NOT INITIALLY HAVE WRITTEN SUPERVISORY PROCEDURES, AND BECAUSE THE FIRM FAILED TO PROVIDE THE SUPERVISORY REVIEW THAT ITS PROCEDURES SUBSEQUENTLY REQUIRED, SWAPS COULD BE OPENED AND CLOSED IN A FEW DAYS' TIME, AT PRICES THAT ALLOWED MARKET RISK TO BE MINIMIZED. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 12/08/2011 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 500,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE IT IS CENSURED AND FINED $500,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE IT IS CENSURED AND FINED $500,000.
regulatory · block 8PDF pages 174–175
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 7,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE IT IS CENSURED AND FINED $7,000.
Other filed details
Description of allegations — filed text
NASD RULE 3340: FOR THE PERIOD BETWEEN JULY 1, 2007 THROUGH DECEMBER 31, 2007, THE FIRM DIRECTLY AND/OR INDIRECTLY EFFECTED 35 TRANSACTIONS IN SECURITIES WHILE A TRADING HALT WAS IN EFFECT WITH RESPECT TO EACH OF THE SECURITIES.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE IT IS CENSURED AND FINED $7,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 12/16/2011 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2008012707301 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: UNSPECIFIED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): NASD RULE 3340: FOR THE PERIOD BETWEEN JULY 1, 2007 THROUGH DECEMBER 31, 2007, THE FIRM DIRECTLY AND/OR INDIRECTLY EFFECTED 35 TRANSACTIONS IN SECURITIES WHILE A TRADING HALT WAS IN EFFECT WITH RESPECT TO EACH OF THE SECURITIES. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 12/16/2011 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 7,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE IT IS CENSURED AND FINED $7,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE IT IS CENSURED AND FINED $7,000.
regulatory · block 9PDF pages 176–178
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 1,000,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
(CONTINUED FROM SECTION 7. ABOVE) THE FIRM ALSO PLACED LANGUAGE IN THE PROMISSORY NOTES USED IN THE ATP PROGRAM THAT STATED THAT ACTIONS TO RECOVER AMOUNTS DUE UNDER THE NOTES COULD BE BROUGHT ONLY IN NEW YORK STATE COURT. IN THESE WAYS, THE FIRM DESIGNED THE ATP PROGRAM TO ALLOW IT TO PURSUE RECOVERY OF AMOUNTS DUE FROM THE ATP LOANS THROUGH ITS AFFILIATE IN EXPEDITED PROCEEDINGS IN NEW YORK COURT, AND THUS TO AVOID THE FIRM'S REQUIREMENT TO ARBITRATE DISPUTES WITH ITS ASSOCIATED PERSONS.
Other filed details
Description of allegations — filed text
FINRA RULES 2010, 13200(A): IN JANUARY 2009, THE FIRM IMPLEMENTED ADVISOR TRANSITION PROGRAM (ATP) TO RETAIN HIGH PRODUCING REGISTERED REPRESENTATIVES DURING THE PERIOD WHEN THE FIRM WAS ACQUIRED BY BANK OF AMERICA CORPORATION. THE FIRM STRUCTURED THE ATP PROGRAM TO ALLOW IT TO AVOID COMPLYING WITH ITS OBLIGATION TO ARBITRATE DISPUTES WITH ITS ASSOCIATED PERSONS CONCERNING ATP PAYMENTS. THE ATP PAYMENTS WERE DOCUMENTED SO THAT THE PROMISSORY NOTES STATED THAT THE LOANS WERE BEING MADE TO THE REGISTERED REPRESENTATIVES BY A NON-REGISTERED AFFILIATE OF THE FIRM. HOWEVER, THE FUNDING FOR THE ATP LOANS WAS ACTUALLY PROVIDED TO THE FIRM BY ITS PARENT COMPANY, AND NOT BY THE NON-REGISTERED AFFILIATE OF THE FIRM. THE FUNDS WERE PROVIDED BY THE PARENT COMPANY TO AN ACCOUNT AT THE FIRM IN THE NAME OF THE FIRM'S AFFILIATE, WHICH IN TURN MADE A PAYABLE ENTRY ON ITS BOOKS FOR THE AMOUNT OF THE ATP FUNDING. THE LOANS WERE SERVICED BY THE FIRM. EACH OF THE REGISTERED REPRESENTATIVES WHO RECEIVED AN ATP LOAN WAS REQUIRED TO SIGN A PROMISSORY NOTE. IN THE PROMISSORY NOTE, THE REGISTERED REPRESENTATIVE AGREED TO REPAY THE BALANCE DUE ON THE LOAN TO THE FIRM'S AFFILIATE WHEN THE REGISTERED REPRESENTATIVE'S EMPLOYMENT WITH THE FIRM TERMINATED. THE PROMISSORY NOTES WERE DRAFTED BY THE FIRM AND STATED THAT ANY ACTIONS REGARDING THE NOTE, INCLUDING ACTIONS TO RECOVER AMOUNTS DUE UNDER THE NOTE, SHALL BE BROUGHT SOLELY IN THE SUPREME COURT OF THE STATE OF NEW YORK IN NEW YORK COUNTY. THE NOTES ALSO REQUIRED REGISTERED REPRESENTATIVES TO CONSENT TO THE JURISDICTION OF THE NEW YORK STATE COURTS FOR ANY ACTION OR PROCEEDING RELATING TO THE NOTE. OTHER THAN THE PROMISSORY NOTE, THE FIRM'S REGISTERED REPRESENTATIVES HAD NO RELATIONSHIP WITH THE AFFILIATE OF THE FIRM. THE LANGUAGE DESCRIBED WAS INCLUDED IN THE PROMISSORY NOTES SO THE FIRM COULD PURSUE COLLECTIONS OF AMOUNTS DUE UNDER THE LOANS THROUGH THE FIRM'S AFFILIATE IN EXPEDITED PROCEEDINGS IN NEW YORK STATE COURT. NEW YORK LAW SPECIFICALLY PROVIDES FOR SUCH PROCEEDINGS FOR NON-PAYMENT OF MONEY AMOUNTS DUE AND GREATLY LIMITS DEFENDANTS' ABILITY TO ASSERT COUNTERCLAIMS IN SUCH ACTIONS. IN 2009, A NUMBER OF REGISTERED REPRESENTATIVES WHO HAD RECEIVED ATP LOANS LEFT THE FIRM, OR WERE TERMINATED BY THE FIRM, AND FAILED TO REPAY AMOUNTS DUE UNDER THE ATP. TO PURSUE COLLECTION OF OUTSTANDING ATP LOAN BALANCES FROM THOSE REGISTERED REPRESENTATIVES, THE FIRM FILED SUMMARY COLLECTION PROCEEDINGS IN NEW YORK STATE COURT IN THE NAME OF THE FIRM'S AFFILIATE. BETWEEN JANUARY 2009 AND NOVEMBER 2009, THE FIRM FILED OVER 90 SUCH ACTIONS IN NEW YORK STATE COURT. THESE PROCEEDINGS INVOLVED DISPUTES BETWEEN THE FIRM AND THE REGISTERED REPRESENTATIVES RELATING TO THE BUSINESS ACTIVITIES OF BOTH THE FIRM AND THE REPRESENTATIVES. AS SUCH, RULE 13200(A) OF FINRA'S CODE OF ARBITRATION PROCEDURE REQUIRED THAT THE PROCEEDINGS BE BROUGHT AS ARBITRATION PROCEEDINGS, AND NOT AS EXPEDITED PROCEEDINGS IN NEW YORK STATE COURT. THE FIRM DESIGNED THE ATP PROGRAM TO AVOID INSTITUTING ARBITRATION PROCEEDINGS TO COLLECT AMOUNTS DUE FROM REGISTERED REPRESENTATIVES WHO HAD LEFT THE FIRM. THE FIRM STRUCTURED THE PROGRAM SO IT APPEARED THAT THE FUNDS FOR THE ATP LOANS CAME FROM AN AFFILIATE OF THE FIRM, A NON-REGISTERED AFFILIATE, AND NOT FROM THE FIRM ITSELF. (CONTINUED IN SECTION 13 BELOW)
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE THE FIRM IS CENSURED AND FINED $1,000,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 01/25/2012 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2009020188101 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: PROMISSORY NOTES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): FINRA RULES 2010, 13200(A): IN JANUARY 2009, THE FIRM IMPLEMENTED ADVISOR TRANSITION PROGRAM (ATP) TO RETAIN HIGH PRODUCING REGISTERED REPRESENTATIVES DURING THE PERIOD WHEN THE FIRM WAS ACQUIRED BY BANK OF AMERICA CORPORATION. THE FIRM STRUCTURED THE ATP PROGRAM TO ALLOW IT TO AVOID COMPLYING WITH ITS OBLIGATION TO ARBITRATE DISPUTES WITH ITS ASSOCIATED PERSONS CONCERNING ATP PAYMENTS. THE ATP PAYMENTS WERE DOCUMENTED SO THAT THE PROMISSORY NOTES STATED THAT THE LOANS WERE BEING MADE TO THE REGISTERED REPRESENTATIVES BY A NON-REGISTERED AFFILIATE OF THE FIRM. HOWEVER, THE FUNDING FOR THE ATP LOANS WAS ACTUALLY PROVIDED TO THE FIRM BY ITS PARENT COMPANY, AND NOT BY THE NON-REGISTERED AFFILIATE OF THE FIRM. THE FUNDS WERE PROVIDED BY THE PARENT COMPANY TO AN ACCOUNT AT THE FIRM IN THE NAME OF THE FIRM'S AFFILIATE, WHICH IN TURN MADE A PAYABLE ENTRY ON ITS BOOKS FOR THE AMOUNT OF THE ATP FUNDING. THE LOANS WERE SERVICED BY THE FIRM. EACH OF THE REGISTERED REPRESENTATIVES WHO RECEIVED AN ATP LOAN WAS REQUIRED TO SIGN A PROMISSORY NOTE. IN THE PROMISSORY NOTE, THE REGISTERED REPRESENTATIVE AGREED TO REPAY THE BALANCE DUE ON THE LOAN TO THE FIRM'S AFFILIATE WHEN THE REGISTERED REPRESENTATIVE'S EMPLOYMENT WITH THE FIRM TERMINATED. THE PROMISSORY NOTES WERE DRAFTED BY THE FIRM AND STATED THAT ANY ACTIONS REGARDING THE NOTE, INCLUDING ACTIONS TO RECOVER AMOUNTS DUE UNDER THE NOTE, SHALL BE BROUGHT SOLELY IN THE SUPREME COURT OF THE STATE OF NEW YORK IN NEW YORK COUNTY. THE NOTES ALSO REQUIRED REGISTERED REPRESENTATIVES TO CONSENT TO THE JURISDICTION OF THE NEW YORK STATE COURTS FOR ANY ACTION OR PROCEEDING RELATING TO THE NOTE. OTHER THAN THE PROMISSORY NOTE, THE FIRM'S REGISTERED REPRESENTATIVES HAD NO RELATIONSHIP WITH THE AFFILIATE OF THE FIRM. THE LANGUAGE DESCRIBED WAS INCLUDED IN THE PROMISSORY NOTES SO THE FIRM COULD PURSUE COLLECTIONS OF AMOUNTS DUE UNDER THE LOANS THROUGH THE FIRM'S AFFILIATE IN EXPEDITED PROCEEDINGS IN NEW YORK STATE COURT. NEW YORK LAW SPECIFICALLY PROVIDES FOR SUCH PROCEEDINGS FOR NON-PAYMENT OF MONEY AMOUNTS DUE AND GREATLY LIMITS DEFENDANTS' ABILITY TO ASSERT COUNTERCLAIMS IN SUCH ACTIONS. IN 2009, A NUMBER OF REGISTERED REPRESENTATIVES WHO HAD RECEIVED ATP LOANS LEFT THE FIRM, OR WERE TERMINATED BY THE FIRM, AND FAILED TO REPAY AMOUNTS DUE UNDER THE ATP. TO PURSUE COLLECTION OF OUTSTANDING ATP LOAN BALANCES FROM THOSE REGISTERED REPRESENTATIVES, THE FIRM FILED SUMMARY COLLECTION PROCEEDINGS IN NEW YORK STATE COURT IN THE NAME OF THE FIRM'S AFFILIATE. BETWEEN JANUARY 2009 AND NOVEMBER 2009, THE FIRM FILED OVER 90 SUCH ACTIONS IN NEW YORK STATE COURT. THESE PROCEEDINGS INVOLVED DISPUTES BETWEEN THE FIRM AND THE REGISTERED REPRESENTATIVES RELATING TO THE BUSINESS ACTIVITIES OF BOTH THE FIRM AND THE REPRESENTATIVES. AS SUCH, RULE 13200(A) OF FINRA'S CODE OF ARBITRATION PROCEDURE REQUIRED THAT THE PROCEEDINGS BE BROUGHT AS ARBITRATION PROCEEDINGS, AND NOT AS EXPEDITED PROCEEDINGS IN NEW YORK STATE COURT. THE FIRM DESIGNED THE ATP PROGRAM TO AVOID INSTITUTING ARBITRATION PROCEEDINGS TO COLLECT AMOUNTS DUE FROM REGISTERED REPRESENTATIVES WHO HAD LEFT THE FIRM. THE FIRM STRUCTURED THE PROGRAM SO IT APPEARED THAT THE FUNDS FOR THE ATP LOANS CAME FROM AN AFFILIATE OF THE FIRM, A NON-REGISTERED AFFILIATE, AND NOT FROM THE FIRM ITSELF. (CONTINUED IN SECTION 13 BELOW) 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 01/25/2012 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 1,000,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE THE FIRM IS CENSURED AND FINED $1,000,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). (CONTINUED FROM SECTION 7. ABOVE) THE FIRM ALSO PLACED LANGUAGE IN THE PROMISSORY NOTES USED IN THE ATP PROGRAM THAT STATED THAT ACTIONS TO RECOVER AMOUNTS DUE UNDER THE NOTES COULD BE BROUGHT ONLY IN NEW YORK STATE COURT. IN THESE WAYS, THE FIRM DESIGNED THE ATP PROGRAM TO ALLOW IT TO PURSUE RECOVERY OF AMOUNTS DUE FROM THE ATP LOANS THROUGH ITS AFFILIATE IN EXPEDITED PROCEEDINGS IN NEW YORK COURT, AND THUS TO AVOID THE FIRM'S REQUIREMENT TO ARBITRATE DISPUTES WITH ITS ASSOCIATED PERSONS.
regulatory · block 10PDF pages 178–179
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 12,500.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $12,500.
Other filed details
Description of allegations — filed text
NASD RULES 6230(B), 6230(C)(6) - MERRILL LYNCH FAILED TO REPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE (TRACE) TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES THAT IT WAS REQUIRED TO REPORT, AND THE FIRM FAILED TO REPORT TO TRACE THE CORRECT CONTRA-PARTY'S IDENTIFIER FOR TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $12,500.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 01/25/2012 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2008016382201 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: TRACE-ELIGIBLE SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): NASD RULES 6230(B), 6230(C)(6) - MERRILL LYNCH FAILED TO REPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE (TRACE) TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES THAT IT WAS REQUIRED TO REPORT, AND THE FIRM FAILED TO REPORT TO TRACE THE CORRECT CONTRA-PARTY'S IDENTIFIER FOR TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 01/25/2012 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 12,500.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $12,500. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $12,500.
regulatory · block 11PDF pages 179–181
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 10,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, BANC OF AMERICA SECURITIES LLC ENTERED INTO A LETTER OF ACCEPTANCE, WAIVER AND CONSENT WITH FINRA IN WHICH IT AGREED TO A CENSURE AND A FINE OF $10,000.00.
Other filed details
Description of allegations — filed text
DURING THE PERIOD FROM APRIL 1, 2009 THROUGH JUNE 30, 2009 (THE "REVIEW PERIOD"), FINRA ALLEGED THAT BANC OF AMERICA SECURITIES LLC (WHICH MERGED INTO APPLICANT ON NOVEMBER 1, 2010) FAILED TO REPORT TO TRACE 4,429 TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES WITHIN 15 MINUTES OF THE TIME OF EXECUTION. THESE LATE TRANSACTIONS CONSTITUTED 5.31% OF THE TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES THAT BANC OF AMERICA SECURITIES LLC REPORTED TO TRACE DURING THE REVIEW PERIOD (83,335). FINRA ALLEGED THE CONDUCT DESCRIBED IN THIS ITEM 7 CONSTITUTED SEPARATE AND DISTINCT VIOLATIONS OF FINRA RULE 6730 AND A PATTERN OR PRACTICE OF LATE REPORTING WITHOUT EXCEPTIONAL CIRCUMSTANCES IN VIOLATION OF FINRA RULE 2010.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, BANC OF AMERICA SECURITIES LLC ENTERED INTO A LETTER OF ACCEPTANCE, WAIVER AND CONSENT WITH FINRA IN WHICH IT AGREED TO A CENSURE AND A FINE OF $10,000.00.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 01/03/2012 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 20090191679-01 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Debt - Corporate Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): DURING THE PERIOD FROM APRIL 1, 2009 THROUGH JUNE 30, 2009 (THE "REVIEW PERIOD"), FINRA ALLEGED THAT BANC OF AMERICA SECURITIES LLC (WHICH MERGED INTO APPLICANT ON NOVEMBER 1, 2010) FAILED TO REPORT TO TRACE 4,429 TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES WITHIN 15 MINUTES OF THE TIME OF EXECUTION. THESE LATE TRANSACTIONS CONSTITUTED 5.31% OF THE TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES THAT BANC OF AMERICA SECURITIES LLC REPORTED TO TRACE DURING THE REVIEW PERIOD (83,335). FINRA ALLEGED THE CONDUCT DESCRIBED IN THIS ITEM 7 CONSTITUTED SEPARATE AND DISTINCT VIOLATIONS OF FINRA RULE 6730 AND A PATTERN OR PRACTICE OF LATE REPORTING WITHOUT EXCEPTIONAL CIRCUMSTANCES IN VIOLATION OF FINRA RULE 2010. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 01/03/2012 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 10,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, BANC OF AMERICA SECURITIES LLC ENTERED INTO A LETTER OF ACCEPTANCE, WAIVER AND CONSENT WITH FINRA IN WHICH IT AGREED TO A CENSURE AND A FINE OF $10,000.00. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, BANC OF AMERICA SECURITIES LLC ENTERED INTO A LETTER OF ACCEPTANCE, WAIVER AND CONSENT WITH FINRA IN WHICH IT AGREED TO A CENSURE AND A FINE OF $10,000.00.
regulatory · block 12PDF pages 181–183
- Regulator name — filed text
- ILLINOIS SECURITIES DEPARTMENT ("DEPARTMENT")
- Monetary/Fine Amount — filed text
- $ 1,578,320.87
- How was matter resolved — filed text
- Settled
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE RESPONDENTS AGREED TO A SERIES OF UNDERTAKINGS DESIGNED TO PROVIDE RELIEF TO ELIGIBLE INVESTORS. THE RESPONDENTS, THROUGH THEIR AFFILIATE BLUE RIDGE, HAVE OFFERED TO PURCHASE AT PAR PLUS ACCRUED AND UNPAID INTEREST OR DIVIDENDS FROM ELIGIBLE INVESTORS CERTAIN ARS THAT HAVE FAILED AT AUCTION. THE RESPONDENTS HAVE ALSO AGREED TO USE REASONABLE EFFORTS TO IDENTIFY ELIGIBLE INVESTORS WHO SOLD CERTAIN ARS BELOW PAR, AND TO PAY SUCH INVESTORS THE DIFFERENCE BETWEEN PAR AND THE PRICE AT WHICH THEY SOLD THE SECURITIES. IN ADDITION, THE RESPONDENTS ARE ENDEAVORING TO IDENTIFY ELIGIBLE INVESTORS WHO TOOK OUT CERTAIN LOANS FROM THE RESPONDENTS THAT WERE SECURED BY ARS THAT WERE NOT SUCCESSFULLY AUCTIONING AT THE TIME OF THE LOAN, AND REIMBURSE THEM TO THE EXTENT THAT THE INTEREST RATE ON THE LOANS EXCEEDED THE INTEREST PAID ON THE ARS. THE RESPONDENTS HAVE ALSO AGREED TO PARTICIPATE IN A SPECIAL ARBITRATION PROCESS FOR THE PURPOSE OF ARBITRATING ANY ELIGIBLE INVESTOR'S CONSEQUENTIAL DAMAGES CLAIM ARISING FROM THE INABILITY TO SELL CERTAIN ARS. FURTHERMORE, THE RESPONDENTS AGREED TO REFUND CERTAIN REFINANCING FEES TO MUNICIPAL AUCTION RATE ISSUERS THAT ISSUED SUCH ARS THROUGH THE RESPONDENTS. THE RESPONDENTS HAVE ALSO UNDERTAKEN TO MAKE THEIR BEST EFFORTS TO WORK WITH ISSUERS AND OTHER INTERESTED PARTIES TO SEEK TO PROVIDE LIQUIDITY SOLUTIONS FOR INSTITUTIONAL INVESTORS THAT ARE NOT CONSIDERED "ELIGIBLE INVESTORS."
Other filed details
Description of allegations — filed text
THE DEPARTMENT ALLEGED THAT MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (AS SUCCESSOR BY MERGER TO BANC OF AMERICA SECURITIES LLC AND BANC OF AMERICA INVESTMENT SERVICES, INC.) (COLLECTIVELY, "RESPONDENTS") INAPPROPRIATELY MARKETED AND SOLD AUCTION RATE SECURITIES ("ARS") WITHOUT ADEQUATELY INFORMING CERTAIN OF THEIR CUSTOMERS OF THE INCREASED RISKS OF ILLIQUIDITY ASSOCIATED WITH ARS. THE DEPARTMENT ALLEGED THAT, THROUGH THIS CONDUCT, THE RESPONDENTS ENGAGED IN DISHONEST AND UNETHICAL PRACTICES IN THE OFFER AND SALE OF SECURITIES AND FAILED TO SUPERVISE THEIR AGENTS.
Sanction detail — filed text
THE RESPONDENTS HAVE PAID $1,578,320.87 TO THE STATE OF ILLINOIS REPRESENTING ILLINOIS'S PORTION OF A TOTAL CIVIL PENALTY OF $50,000,000 THAT WILL BE DISTRIBUTED AMONG THE STATES AND U.S. TERRITORIES THAT ENTER INTO SIMILAR ADMINISTRATIVE OR CIVIL CONSENT ORDERS RELATED TO ARS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
ILLINOIS SECURITIES DEPARTMENT ("DEPARTMENT")
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CEASE AND DESIST; UNDERTAKING
3.
Date Initiated (MM/DD/YYYY):
01/10/2012
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
08-00204
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
AUCTION RATE SECURITIES
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE DEPARTMENT ALLEGED THAT MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (AS SUCCESSOR BY MERGER TO BANC OF AMERICA
SECURITIES LLC AND BANC OF AMERICA INVESTMENT SERVICES, INC.) (COLLECTIVELY, "RESPONDENTS") INAPPROPRIATELY MARKETED AND SOLD
AUCTION RATE SECURITIES ("ARS") WITHOUT ADEQUATELY INFORMING CERTAIN OF THEIR CUSTOMERS OF THE INCREASED RISKS OF ILLIQUIDITY
ASSOCIATED WITH ARS. THE DEPARTMENT ALLEGED THAT, THROUGH THIS CONDUCT, THE RESPONDENTS ENGAGED IN DISHONEST AND UNETHICAL
PRACTICES IN THE OFFER AND SALE OF SECURITIES AND FAILED TO SUPERVISE THEIR AGENTS.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Settled
11. Resolution Date (MM/DD/YYYY):
01/10/2012
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 1,578,320.87
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
CERTAIN UNDERTAKINGS (SEE 13 BELOW). THE RESPONDENTS HAVE ALSO, THROUGH THEIR AFFILIATE BLUE RIDGE INVESTMENTS, L.L.C. ("BLUE
RIDGE"), OFFERED TO PURCHASE AT PAR PLUS ACCRUED AND UNPAID INTEREST OR DIVIDENDS FROM "ELIGIBLE INVESTORS," AS DEFINED IN
THE ADMINISTRATIVE CONSENT ORDER ("ORDER"), CERTAIN ARS THAT HAVE FAILED AT AUCTION, AND HAVE SUBSTANTIALLY COMPLETED THE
PURCHASE OF THOSE ARS.
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE RESPONDENTS HAVE PAID $1,578,320.87 TO THE STATE OF ILLINOIS REPRESENTING ILLINOIS'S PORTION OF A TOTAL CIVIL PENALTY OF
$50,000,000 THAT WILL BE DISTRIBUTED AMONG THE STATES AND U.S. TERRITORIES THAT ENTER INTO SIMILAR ADMINISTRATIVE OR CIVIL
CONSENT ORDERS RELATED TO ARS.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE RESPONDENTS AGREED TO A SERIES OF UNDERTAKINGS DESIGNED TO PROVIDE RELIEF TO
ELIGIBLE INVESTORS. THE RESPONDENTS, THROUGH THEIR AFFILIATE BLUE RIDGE, HAVE OFFERED TO PURCHASE AT PAR PLUS ACCRUED AND UNPAID
INTEREST OR DIVIDENDS FROM ELIGIBLE INVESTORS CERTAIN ARS THAT HAVE FAILED AT AUCTION. THE RESPONDENTS HAVE ALSO AGREED TO USE
REASONABLE EFFORTS TO IDENTIFY ELIGIBLE INVESTORS WHO SOLD CERTAIN ARS BELOW PAR, AND TO PAY SUCH INVESTORS THE DIFFERENCE
BETWEEN PAR AND THE PRICE AT WHICH THEY SOLD THE SECURITIES. IN ADDITION, THE RESPONDENTS ARE ENDEAVORING TO IDENTIFY ELIGIBLE
INVESTORS WHO TOOK OUT CERTAIN LOANS FROM THE RESPONDENTS THAT WERE SECURED BY ARS THAT WERE NOT SUCCESSFULLY AUCTIONING AT
THE TIME OF THE LOAN, AND REIMBURSE THEM TO THE EXTENT THAT THE INTEREST RATE ON THE LOANS EXCEEDED THE INTEREST PAID ON THE ARS.
THE RESPONDENTS HAVE ALSO AGREED TO PARTICIPATE IN A SPECIAL ARBITRATION PROCESS FOR THE PURPOSE OF ARBITRATING ANY ELIGIBLE
INVESTOR'S CONSEQUENTIAL DAMAGES CLAIM ARISING FROM THE INABILITY TO SELL CERTAIN ARS. FURTHERMORE, THE RESPONDENTS AGREED TO
REFUND CERTAIN REFINANCING FEES TO MUNICIPAL AUCTION RATE ISSUERS THAT ISSUED SUCH ARS THROUGH THE RESPONDENTS. THE
RESPONDENTS HAVE ALSO UNDERTAKEN TO MAKE THEIR BEST EFFORTS TO WORK WITH ISSUERS AND OTHER INTERESTED PARTIES TO SEEK TO
PROVIDE LIQUIDITY SOLUTIONS FOR INSTITUTIONAL INVESTORS THAT ARE NOT CONSIDERED "ELIGIBLE INVESTORS."regulatory · block 13PDF pages 183–185
- Regulator name — filed text
- IDAHO DEPARTMENT OF FINANCE
- Monetary/Fine Amount — filed text
- $ 352,050.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
UNDER THE TERMS OF THE SETTLEMENT, MLPFS AGREED TO CERTAIN UNDERTAKINGS, INCLUDING ESTABLISHING AND MAINTAINING A TRADE MONITORING SYSTEM AND FILING A REPORT WITH THE DEPARTMENT DESCRIBING CERTAIN MONITORING IMPROVEMENTS.
Other filed details
Description of allegations — filed text
THE IDAHO DEPARTMENT OF FINANCE (DEPARTMENT), ALLEGED THAT IN CONNECTION WITH THE SALE OF SECURITIES IN IDAHO BY CERTAIN MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS) CLIENT ASSOCIATES (CAS) WHO WERE NOT REGISTERED IN IDAHO, MLPFS FAILED TO ESTABLISH AN ADEQUATE SYSTEM TO MONITOR THE REGISTRATION STATUS OF PERSONS ACCEPTING CLIENT ORDERS, WHICH CONSTITUTED A FAILURE TO ESTABLISH, MAINTAIN, AND ENFORCE WRITTEN SUPERVISORY PROCEDURES AS REQUIRED BY IDAPA 12.01.08.105.01, AND FAILED TO REQUIRE ITS CAS TO BE REGISTERED IN THE APPROPRIATE JURISDICTIONS, WHICH CONSTITUTED A FAILURE TO ENFORCE ITS ESTABLISHED WRITTEN PROCEDURES IN VIOLATION OF IDAPA 12.01.08.105.03.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, MLPFS ENTERED INTO A SETTLEMENT WITH THE DEPARTMENT, IN WHICH IT AGREED TO CEASE AND DESIST FROM ENGAGING IN THE SALE OF SECURITIES IN IDAHO THROUGH UNREGISTERED AGENTS AND TO COMPLY WITH CERTAIN UNDERTAKINGS. MLPFS AGREED TO PAY THE DEPARTMENT $352,050.00, AS PART OF A TOTAL PAYMENT, CONSISTING OF FINES, PENALTIES AND ANY OTHER MONETARY SANCTIONS, OF $26,563,094.50 THAT WILL BE ALLOCATED AMONG THE 50 STATES, THE DISTRICT OF COLUMBIA, PUERTO RICO, AND THE U.S. VIRGIN ISLANDS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) IDAHO DEPARTMENT OF FINANCE 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CEASE AND DESIST 3. Date Initiated (MM/DD/YYYY): 01/20/2012 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2011-7-17 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: SALE OF SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE IDAHO DEPARTMENT OF FINANCE (DEPARTMENT), ALLEGED THAT IN CONNECTION WITH THE SALE OF SECURITIES IN IDAHO BY CERTAIN MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS) CLIENT ASSOCIATES (CAS) WHO WERE NOT REGISTERED IN IDAHO, MLPFS FAILED TO ESTABLISH AN ADEQUATE SYSTEM TO MONITOR THE REGISTRATION STATUS OF PERSONS ACCEPTING CLIENT ORDERS, WHICH CONSTITUTED A FAILURE TO ESTABLISH, MAINTAIN, AND ENFORCE WRITTEN SUPERVISORY PROCEDURES AS REQUIRED BY IDAPA 12.01.08.105.01, AND FAILED TO REQUIRE ITS CAS TO BE REGISTERED IN THE APPROPRIATE JURISDICTIONS, WHICH CONSTITUTED A FAILURE TO ENFORCE ITS ESTABLISHED WRITTEN PROCEDURES IN VIOLATION OF IDAPA 12.01.08.105.03. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Consent 11. Resolution Date (MM/DD/YYYY): 01/20/2012 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 352,050.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKINGS. Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, MLPFS ENTERED INTO A SETTLEMENT WITH THE DEPARTMENT, IN WHICH IT AGREED TO CEASE AND DESIST FROM ENGAGING IN THE SALE OF SECURITIES IN IDAHO THROUGH UNREGISTERED AGENTS AND TO COMPLY WITH CERTAIN UNDERTAKINGS. MLPFS AGREED TO PAY THE DEPARTMENT $352,050.00, AS PART OF A TOTAL PAYMENT, CONSISTING OF FINES, PENALTIES AND ANY OTHER MONETARY SANCTIONS, OF $26,563,094.50 THAT WILL BE ALLOCATED AMONG THE 50 STATES, THE DISTRICT OF COLUMBIA, PUERTO RICO, AND THE U.S. VIRGIN ISLANDS. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). UNDER THE TERMS OF THE SETTLEMENT, MLPFS AGREED TO CERTAIN UNDERTAKINGS, INCLUDING ESTABLISHING AND MAINTAINING A TRADE MONITORING SYSTEM AND FILING A REPORT WITH THE DEPARTMENT DESCRIBING CERTAIN MONITORING IMPROVEMENTS.
regulatory · block 14PDF pages 185–187
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 55,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $55,000 FOR MSRB RULE VIOLATIONS. THE FIRM HAS ALREADY PAID RESTITUTION TO THE CUSTOMERS INVOLVED WITH THE TRANSACTIONS.
Other filed details
Description of allegations — filed text
MSRB RULES G-17, G-30(A) - BANC OF AMERICA INVESTMENT SERVICES, INC. (WHICH WAS MERGED WITH AND INTO MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ON OCTOBER 23, 2009) PURCHASED MUNICIPAL SECURITIES FOR ITS OWN ACCOUNT FROM A CUSTOMER AND/OR SOLD MUNICIPAL SECURITIES FOR ITS OWN ACCOUNT TO A CUSTOMER AT AN AGGREGATE PRICE (INCLUDING ANY MARKDOWN OR MARKUP) THAT WAS NOT FAIR AND REASONABLE, TAKING INTO CONSIDERATION ALL RELEVANT FACTORS, INCLUDING THE BEST JUDGMENT OF THE BROKER, DEALER OR MUNICIPAL SECURITIES DEALER AS TO THE FAIR MARKET VALUE OF THE SECURITIES AT THE TIME OF THE TRANSACTION AND OF ANY SECURITIES EXCHANGED OR TRADED IN CONNECTION WITH THE TRANSACTION, THE EXPENSE INVOLVED IN EFFECTING THE TRANSACTION, THE FACT THAT THE BROKER, DEALER OR MUNICIPAL SECURITIES DEALER IS ENTITLED TO A PROFIT, AND THE TOTAL DOLLAR AMOUNT OF THE TRANSACTION.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $55,000 FOR MSRB RULE VIOLATIONS. THE FIRM HAS ALREADY PAID RESTITUTION TO THE CUSTOMERS INVOLVED WITH THE TRANSACTIONS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 02/03/2012 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2009018104101 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Debt - Municipal Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): MSRB RULES G-17, G-30(A) - BANC OF AMERICA INVESTMENT SERVICES, INC. (WHICH WAS MERGED WITH AND INTO MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ON OCTOBER 23, 2009) PURCHASED MUNICIPAL SECURITIES FOR ITS OWN ACCOUNT FROM A CUSTOMER AND/OR SOLD MUNICIPAL SECURITIES FOR ITS OWN ACCOUNT TO A CUSTOMER AT AN AGGREGATE PRICE (INCLUDING ANY MARKDOWN OR MARKUP) THAT WAS NOT FAIR AND REASONABLE, TAKING INTO CONSIDERATION ALL RELEVANT FACTORS, INCLUDING THE BEST JUDGMENT OF THE BROKER, DEALER OR MUNICIPAL SECURITIES DEALER AS TO THE FAIR MARKET VALUE OF THE SECURITIES AT THE TIME OF THE TRANSACTION AND OF ANY SECURITIES EXCHANGED OR TRADED IN CONNECTION WITH THE TRANSACTION, THE EXPENSE INVOLVED IN EFFECTING THE TRANSACTION, THE FACT THAT THE BROKER, DEALER OR MUNICIPAL SECURITIES DEALER IS ENTITLED TO A PROFIT, AND THE TOTAL DOLLAR AMOUNT OF THE TRANSACTION. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 02/03/2012 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 55,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: NA Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $55,000 FOR MSRB RULE VIOLATIONS. THE FIRM HAS ALREADY PAID RESTITUTION TO THE CUSTOMERS INVOLVED WITH THE TRANSACTIONS. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $55,000 FOR MSRB RULE VIOLATIONS. THE FIRM HAS ALREADY PAID RESTITUTION TO THE CUSTOMERS INVOLVED WITH THE TRANSACTIONS.
regulatory · block 15PDF pages 187–189
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 35,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $35,000 FOR MSRB RULE VIOLATIONS.
Other filed details
Description of allegations — filed text
MSRB RULES G-8, G-14 - MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED FAILED TO REPORT INFORMATION REGARDING PURCHASE AND SALE TRANSACTIONS EFFECTED IN MUNICIPAL SECURITIES TO THE REAL-TIME TRANSACTION REPORTING SYSTEM (RTRS) IN THE MANNER PRESCRIBED BY RULE G-14 RTRS PROCEDURES AND THE RTRS USERS MANUAL; THE FIRM FAILED TO REPORT THE CORRECT TRADE TIME TO THE RTRS IN MUNICIPAL SECURITIES TRANSACTION REPORTS AND FAILED TO REPORT INFORMATION FOR THE TRANSACTIONS WITHIN 15 MINUTES OF TRADE TIME TO AN RTRS PORTAL. THE FIRM FAILED TO SHOW THE CORRECT EXECUTION TIME ON THE MEMORANDUM OF TRANSACTIONS IN MUNICIPAL SECURITIES FOR THE ACCOUNT OF THE FIRM EXECUTED WITH ANOTHER BROKER-DEALER.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $35,000 FOR MSRB RULE VIOLATIONS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 02/15/2012 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2009018644401 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Debt - Municipal Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): MSRB RULES G-8, G-14 - MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED FAILED TO REPORT INFORMATION REGARDING PURCHASE AND SALE TRANSACTIONS EFFECTED IN MUNICIPAL SECURITIES TO THE REAL-TIME TRANSACTION REPORTING SYSTEM (RTRS) IN THE MANNER PRESCRIBED BY RULE G-14 RTRS PROCEDURES AND THE RTRS USERS MANUAL; THE FIRM FAILED TO REPORT THE CORRECT TRADE TIME TO THE RTRS IN MUNICIPAL SECURITIES TRANSACTION REPORTS AND FAILED TO REPORT INFORMATION FOR THE TRANSACTIONS WITHIN 15 MINUTES OF TRADE TIME TO AN RTRS PORTAL. THE FIRM FAILED TO SHOW THE CORRECT EXECUTION TIME ON THE MEMORANDUM OF TRANSACTIONS IN MUNICIPAL SECURITIES FOR THE ACCOUNT OF THE FIRM EXECUTED WITH ANOTHER BROKER-DEALER. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 02/15/2012 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 35,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $35,000 FOR MSRB RULE VIOLATIONS. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $35,000 FOR MSRB RULE VIOLATIONS.
regulatory · block 16PDF pages 189–191
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 25,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (AS SUCCESSOR TO BANC OF AMERICA SECURITIES LLC) ENTERED INTO A LETTER OF ACCEPTANCE, WAIVER AND CONSENT WITH FINRA IN WHICH IT AGREED TO A CENSURE AND A FINE OF $25,000.00.
Other filed details
Description of allegations — filed text
DURING THE PERIOD FROM SEPTEMBER 1, 2008 THROUGH DECEMBER 31, 2008 (THE "REVIEW PERIOD"), FINRA ALLEGED THAT BANC OF AMERICA SECURITIES LLC (WHICH MERGED INTO MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED) ON NOVEMBER 1, 2010) FAILED WITHIN 90 SECONDS AFTER EXECUTION, TO TRANSMIT TO THE FINRA/NASDAQ TRADE REPORTING FACILITY ("FINRA/NASDAQ TRF") 3,075 LATE SALE REPORTS OF TRANSACTIONS IN DESIGNATED SECURITIES. THE CONDUCT DESCRIBED CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF NASD RULE 4632(A) (FOR CONDUCT PRIOR TO DECEMBER 15, 2008) AND FINRA RULE 6380(A) (FOR CONDUCT ON OR AFTER DECEMBER 15, 2008) AND A PATTERN OR PRACTICE OF LATE REPORTING WITHOUT EXCEPTIONAL CIRCUMSTANCES IN VIOLATION OF NASD RULE 2110 (FOR CONDUCT PRIOR TO DECEMBER 15, 2008) AND FINRA RULE 2110 (FOR CONDUCT ON OR AFTER DECEMBER 15, 2008).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (AS SUCCESSOR TO BANC OF AMERICA SECURITIES LLC) ENTERED INTO A LETTER OF ACCEPTANCE, WAIVER AND CONSENT WITH FINRA IN WHICH IT AGREED TO A CENSURE AND A FINE OF $25,000.00.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
FINRA
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE
3.
Date Initiated (MM/DD/YYYY):
02/10/2012
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
20090170380-01
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Equity Listed (Common & Preferred Stock)
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
DURING THE PERIOD FROM SEPTEMBER 1, 2008 THROUGH DECEMBER 31, 2008 (THE "REVIEW PERIOD"), FINRA ALLEGED THAT BANC OF AMERICA
SECURITIES LLC (WHICH MERGED INTO MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED) ON NOVEMBER 1, 2010) FAILED WITHIN 90
SECONDS AFTER EXECUTION, TO TRANSMIT TO THE FINRA/NASDAQ TRADE REPORTING FACILITY ("FINRA/NASDAQ TRF") 3,075 LATE SALE REPORTS OF
TRANSACTIONS IN DESIGNATED SECURITIES. THE CONDUCT DESCRIBED CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF NASD RULE 4632(A)
(FOR CONDUCT PRIOR TO DECEMBER 15, 2008) AND FINRA RULE 6380(A) (FOR CONDUCT ON OR AFTER DECEMBER 15, 2008) AND A PATTERN OR
PRACTICE OF LATE REPORTING WITHOUT EXCEPTIONAL CIRCUMSTANCES IN VIOLATION OF NASD RULE 2110 (FOR CONDUCT PRIOR TO DECEMBER 15,
2008) AND FINRA RULE 2110 (FOR CONDUCT ON OR AFTER DECEMBER 15, 2008).
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
02/10/2012
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 25,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (AS SUCCESSOR TO BANC OF
AMERICA SECURITIES LLC) ENTERED INTO A LETTER OF ACCEPTANCE, WAIVER AND CONSENT WITH FINRA IN WHICH IT AGREED TO A CENSURE
AND A FINE OF $25,000.00.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (AS SUCCESSOR TO BANC OF AMERICA
SECURITIES LLC) ENTERED INTO A LETTER OF ACCEPTANCE, WAIVER AND CONSENT WITH FINRA IN WHICH IT AGREED TO A CENSURE AND A FINE OF
$25,000.00.regulatory · block 17PDF pages 191–192
- Regulator name — filed text
- ALASKA DEPARTMENT OF COMMERCE, COMMUNITY, AND ECONOMIC DEVELOPMENT, DIVISION OF BANKING AND SECURITIES
- Monetary/Fine Amount — filed text
- $ 295,450.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
UNDER THE TERMS OF THE SETTLEMENT, MLPFS AGREED TO CERTAIN UNDERTAKINGS, INCLUDING ESTABLISHING AND MAINTAINING A TRADE MONITORING SYSTEM AND FILING A REPORT WITH THE DIVISION DESCRIBING CERTAIN MONITORING IMPROVEMENTS.
Other filed details
Description of allegations — filed text
THE ALASKA DEPARTMENT OF COMMERCE, COMMUNITY, AND ECONOMIC DEVELOPMENT, DIVISION OF BANKING AND SECURITIES (DIVISION), ALLEGED THAT IN CONNECTION WITH THE SALE OF SECURITIES IN ALASKA BY CERTAIN MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS) CLIENT ASSOCIATES (CAS) WHO WERE NOT REGISTERED IN ALASKA, MLPFS FAILED TO ESTABLISH AN ADEQUATE SYSTEM TO MONITOR THE REGISTRATION STATUS OF PERSONS ACCEPTING CLIENT ORDERS, WHICH CONSTITUTED A VIOLATION OF AS 45.55.05(K), FAILED TO REQUIRE ITS CAS TO BE REGISTERED IN THE APPROPRIATE JURISDICTIONS, WHICH CONSTITUTED A FAILURE TO ENFORCE ITS ESTABLISHED WRITTEN PROCEDURES AND FAILURE TO REASONABLY SUPERVISE ITS AGENTS IN VIOLATION OF AS 45.55.060(B)(1), VIOLATED THE AGENT REGISTRATION PROVISIONS OF AS 45.55.030(A) AND (B), AND SOLD SECURITIES IN ALASKA THROUGH UNREGISTERED CAS IN VIOLATION OF AS 45.55.030 (A) AND (B).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, MLPFS ENTERED INTO A SETTLEMENT WITH THE DIVISION, IN WHICH IT AGREED TO CEASE AND DESIST FROM ENGAGING IN THE SALE OF SECURITIES IN ALASKA THROUGH UNREGISTERED AGENTS AND TO COMPLY WITH CERTAIN UNDERTAKINGS. MLPFS AGREED TO PAY THE DIVISION $295,450.00, AS PART OF A TOTAL PAYMENT, CONSISTING OF FINES, PENALTIES AND ANY OTHER MONETARY SANCTIONS, OF $26,563,094.50 THAT WILL BE ALLOCATED AMONG THE 50 STATES, THE DISTRICT OF COLUMBIA, PUERTO RICO, AND THE U.S. VIRGIN ISLANDS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) ALASKA DEPARTMENT OF COMMERCE, COMMUNITY, AND ECONOMIC DEVELOPMENT, DIVISION OF BANKING AND SECURITIES 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CEASE AND DESIST 3. Date Initiated (MM/DD/YYYY): 01/30/2012 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: ORDER NO. 11-000815-01-S 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: SALE OF SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE ALASKA DEPARTMENT OF COMMERCE, COMMUNITY, AND ECONOMIC DEVELOPMENT, DIVISION OF BANKING AND SECURITIES (DIVISION), ALLEGED THAT IN CONNECTION WITH THE SALE OF SECURITIES IN ALASKA BY CERTAIN MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS) CLIENT ASSOCIATES (CAS) WHO WERE NOT REGISTERED IN ALASKA, MLPFS FAILED TO ESTABLISH AN ADEQUATE SYSTEM TO MONITOR THE REGISTRATION STATUS OF PERSONS ACCEPTING CLIENT ORDERS, WHICH CONSTITUTED A VIOLATION OF AS 45.55.05(K), FAILED TO REQUIRE ITS CAS TO BE REGISTERED IN THE APPROPRIATE JURISDICTIONS, WHICH CONSTITUTED A FAILURE TO ENFORCE ITS ESTABLISHED WRITTEN PROCEDURES AND FAILURE TO REASONABLY SUPERVISE ITS AGENTS IN VIOLATION OF AS 45.55.060(B)(1), VIOLATED THE AGENT REGISTRATION PROVISIONS OF AS 45.55.030(A) AND (B), AND SOLD SECURITIES IN ALASKA THROUGH UNREGISTERED CAS IN VIOLATION OF AS 45.55.030 (A) AND (B). 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Consent 11. Resolution Date (MM/DD/YYYY): 01/30/2012 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 295,450.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKINGS. Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, MLPFS ENTERED INTO A SETTLEMENT WITH THE DIVISION, IN WHICH IT AGREED TO CEASE AND DESIST FROM ENGAGING IN THE SALE OF SECURITIES IN ALASKA THROUGH UNREGISTERED AGENTS AND TO COMPLY WITH CERTAIN UNDERTAKINGS. MLPFS AGREED TO PAY THE DIVISION $295,450.00, AS PART OF A TOTAL PAYMENT, CONSISTING OF FINES, PENALTIES AND ANY OTHER MONETARY SANCTIONS, OF $26,563,094.50 THAT WILL BE ALLOCATED AMONG THE 50 STATES, THE DISTRICT OF COLUMBIA, PUERTO RICO, AND THE U.S. VIRGIN ISLANDS. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). UNDER THE TERMS OF THE SETTLEMENT, MLPFS AGREED TO CERTAIN UNDERTAKINGS, INCLUDING ESTABLISHING AND MAINTAINING A TRADE MONITORING SYSTEM AND FILING A REPORT WITH THE DIVISION DESCRIBING CERTAIN MONITORING IMPROVEMENTS.
regulatory · block 18PDF pages 192–194
- Regulator name — filed text
- AMERICAN STOCK EXCHANGE
- Monetary/Fine Amount — filed text
- $ 50,000.00
- How was matter resolved — filed text
- Decision
Action status / disposition — filed text
**3/29/12** A REVIEW OF THIS DECISION MAY BE REQUESTED ONLY BY A MEMBER OF THE NYSE ENTITIES IDENTIFIED IN NYSE RULE 476(G) WITHIN 25 DAYS FROM THE DATE OF THIS LETTER. IF A REVIEW OF THE DECISION IS REQUESTED, YOU WILL BE PROMPTLY NOTIFIED. IF NO REVIEW IS REQUESTED, THE DECISION WILL BECOME FINAL AT THE CLOSE OF BUSINESS ON APRIL 25, 2012. 04/27/2012**DECISION BECAME FINAL AS OF THE CLOSE OF BUSINESS, APRIL 25, 2012.
Other filed details
Description of allegations — filed text
STIPULATION OF FACTS AND CONSENT TO PENALTY FILED BY THE LEGAL SECTION OF THE MARKET REGULATION DEPARTMENT AT FINRA AND PENDING NYSE AMEX: CONSENTED TO FINDINGS: FOR THE SOLE PURPOSE OF SETTLING THIS DISCIPLINARY PROCEEDING, WITHOUT ADJUDICATION OF ANY ISSUES OF LAW OR FACT, AND WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED STIPULATED THAT IT: 1. VIOLATED REGULATION SHO RULE 203 (B)(3) DURING THE PERIOD OF JANUARY 2006 THROUGH JUNE 2008, BY FAILING TO CLOSE OUT 22 FAIL TO DELIVER POSITIONS IN FOUR SEPARATE SECURITIES, THAT EXISTED BETWEEN 14 DAYS TO 50 DAYS. 2. VIOLATED AMEX RULE 324, DURING THE PERIOD OF NOVEMBER 19, 2007 THROUGH DECEMBER 27, 2007, BY INCORRECTLY BOOKING A TRADE, WHICH CAUSED THE FIRM TO MAINTAIN INACCURATE RECORDS AND REPORT INACCURATE INFORMATION TO THE NATIONAL SECURITIES CLEARING CORPORATION. 3. VIOLATED AMEX RULE 320 DURING THE PERIOD OF JANUARY 2006 THROUGH JUNE 2008, BY FAILING TO IMPLEMENT AND MAINTAIN ADEQUATE PROCEDURES OF SUPERVISION AND CONTROL, INCLUDING A SEPARATE SYSTEM FOLLOW-UP AND REVIEW, REASONABLY DESIGNED FOR COMPLIANCE WITH REG SHO RULE 203(B)(3). STIPULATED SANCTION: CENSURE AND FINE IN THE AMOUNT OF $50,000
Sanction detail — filed text
**3/29/12** DECISION NO. 12-AMEX-2 ISSUED BY NYSE AMEX HEARING BOARD: DECISION: VIOLATED REGULATION SHO RULE 203(B)(3) BY FAILING TO CLOSE OUT 22 FAIL-TO-DELIVER POSITIONS IN FOUR SEPERATE SECURITIES THAT EXISTED BETWEEN 14 DAYS TO 50 DAYS; VIOLATED AMEX RULE 324 BY INCORRECTLY BOOKING A TRADE, WHICH CAUSED THE FIRM TO MAINTAIN INACCURATE RECORDS AND REPORT INACCURATE INFORMATION TO THE NATIONAL SECURITIES CLEARING CORPORATION; AND VIOLATED AMEX RULE 320 BY FAILING TO IMPLEMENT AND MAINTAIN ADEQUATE PROCEDURES OF SUPERVISION AND CONTROL, INCLUDING A SEPERATE SYSTEM FOR FOLLOW-UP AND REVIEW, REASONABLY DESIGNED FOR COMPLIANCE WITH REGULATION SHO RULE 203(B)(3). CONSENT TO CENSURE AND $50,000 FINE.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) AMERICAN STOCK EXCHANGE 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 02/17/2012 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 12-AMEX-2 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: N/A 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): STIPULATION OF FACTS AND CONSENT TO PENALTY FILED BY THE LEGAL SECTION OF THE MARKET REGULATION DEPARTMENT AT FINRA AND PENDING NYSE AMEX: CONSENTED TO FINDINGS: FOR THE SOLE PURPOSE OF SETTLING THIS DISCIPLINARY PROCEEDING, WITHOUT ADJUDICATION OF ANY ISSUES OF LAW OR FACT, AND WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED STIPULATED THAT IT: 1. VIOLATED REGULATION SHO RULE 203 (B)(3) DURING THE PERIOD OF JANUARY 2006 THROUGH JUNE 2008, BY FAILING TO CLOSE OUT 22 FAIL TO DELIVER POSITIONS IN FOUR SEPARATE SECURITIES, THAT EXISTED BETWEEN 14 DAYS TO 50 DAYS. 2. VIOLATED AMEX RULE 324, DURING THE PERIOD OF NOVEMBER 19, 2007 THROUGH DECEMBER 27, 2007, BY INCORRECTLY BOOKING A TRADE, WHICH CAUSED THE FIRM TO MAINTAIN INACCURATE RECORDS AND REPORT INACCURATE INFORMATION TO THE NATIONAL SECURITIES CLEARING CORPORATION. 3. VIOLATED AMEX RULE 320 DURING THE PERIOD OF JANUARY 2006 THROUGH JUNE 2008, BY FAILING TO IMPLEMENT AND MAINTAIN ADEQUATE PROCEDURES OF SUPERVISION AND CONTROL, INCLUDING A SEPARATE SYSTEM FOLLOW-UP AND REVIEW, REASONABLY DESIGNED FOR COMPLIANCE WITH REG SHO RULE 203(B)(3). STIPULATED SANCTION: CENSURE AND FINE IN THE AMOUNT OF $50,000 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Decision 11. Resolution Date (MM/DD/YYYY): 04/25/2012 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 50,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: **3/29/12** DECISION NO. 12-AMEX-2 ISSUED BY NYSE AMEX HEARING BOARD: DECISION: VIOLATED REGULATION SHO RULE 203(B)(3) BY FAILING TO CLOSE OUT 22 FAIL-TO-DELIVER POSITIONS IN FOUR SEPERATE SECURITIES THAT EXISTED BETWEEN 14 DAYS TO 50 DAYS; VIOLATED AMEX RULE 324 BY INCORRECTLY BOOKING A TRADE, WHICH CAUSED THE FIRM TO MAINTAIN INACCURATE RECORDS AND REPORT INACCURATE INFORMATION TO THE NATIONAL SECURITIES CLEARING CORPORATION; AND VIOLATED AMEX RULE 320 BY FAILING TO IMPLEMENT AND MAINTAIN ADEQUATE PROCEDURES OF SUPERVISION AND CONTROL, INCLUDING A SEPERATE SYSTEM FOR FOLLOW-UP AND REVIEW, REASONABLY DESIGNED FOR COMPLIANCE WITH REGULATION SHO RULE 203(B)(3). CONSENT TO CENSURE AND $50,000 FINE. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). **3/29/12** A REVIEW OF THIS DECISION MAY BE REQUESTED ONLY BY A MEMBER OF THE NYSE ENTITIES IDENTIFIED IN NYSE RULE 476(G) WITHIN 25 DAYS FROM THE DATE OF THIS LETTER. IF A REVIEW OF THE DECISION IS REQUESTED, YOU WILL BE PROMPTLY NOTIFIED. IF NO REVIEW IS REQUESTED, THE DECISION WILL BECOME FINAL AT THE CLOSE OF BUSINESS ON APRIL 25, 2012. 04/27/2012**DECISION BECAME FINAL AS OF THE CLOSE OF BUSINESS, APRIL 25, 2012.
regulatory · block 19PDF pages 194–196
- Regulator name — filed text
- STATE OF ILLINOIS, SECRETARY OF STATE, SECURITIES DEPARTMENT
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, MLPFS ENTERED INTO A SETTLEMENT RESULTING IN A CONSENT ORDER IN WHICH IT AGREED TO PAY $25,900,000 IN RESTITUTION AND $30,000 IN REPAYMENT OF EXPENSES.
Other filed details
Description of allegations — filed text
THE STATE OF ILLINOIS, SECRETARY OF STATE, SECURITIES DEPARTMENT (THE "DEPARTMENT") ALLEGED THAT, PURSUANT TO THE ILLINOIS SECURITIES LAW OF 1953 (THE "ACT"), SECTION 8.E.1(M), MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MLPFS") WAS SUBJECT TO SUSPENSION AND REVOCATION OF ITS REGISTRATION AS A DEALER, ALLEGEDLY FOR FAILING REASONABLY TO SUPERVISE A FORMER EMPLOYEE PURSUANT TO SECTION 8.E.1(E)(I) AND (IV) OF THE ACT, RESULTING IN THAT FORMER EMPLOYEE'S ALLEGED VIOLATIONS OF SECTION 12.A, F AND I OF THE ACT.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, MLPFS ENTERED INTO A SETTLEMENT WITH THE DEPARTMENT RESULTING IN A CONSENT ORDER IN WHICH MLPFS AGREED TO PAY $25,900,000 INTO A FUND TO PROVIDE RESTITUTION TO MITIGATE AND OFFSET ANY POTENTIAL LOSSES OR INJURIES RESULTING FROM THE ACTIONS OF A FORMER EMPLOYEE. THE FUND IS BEING ADMINISTERED BY AN INDEPENDENT THIRD PARTY ADMINISTRATOR. $30,000 WAS ALSO PAID AS REPAYMENT TO THE STATE FOR THE COST OF THE INVESTIGATION. ALL MONIES WERE PAID ON FEBRUARY 17, 2012.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
STATE OF ILLINOIS, SECRETARY OF STATE, SECURITIES DEPARTMENT
2.
Principal Sanction:
Restitution
Other Sanctions:
REIMBURSEMENT OF COST OF INVESTIGATION.
3.
Date Initiated (MM/DD/YYYY):
01/30/2012
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
FILE NO. 0900049
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
UNIVERSAL VARIABLE LIFE INSURANCE POLICIES
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE STATE OF ILLINOIS, SECRETARY OF STATE, SECURITIES DEPARTMENT (THE "DEPARTMENT") ALLEGED THAT, PURSUANT TO THE ILLINOIS
SECURITIES LAW OF 1953 (THE "ACT"), SECTION 8.E.1(M), MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MLPFS") WAS SUBJECT TO
SUSPENSION AND REVOCATION OF ITS REGISTRATION AS A DEALER, ALLEGEDLY FOR FAILING REASONABLY TO SUPERVISE A FORMER EMPLOYEE
PURSUANT TO SECTION 8.E.1(E)(I) AND (IV) OF THE ACT, RESULTING IN THAT FORMER EMPLOYEE'S ALLEGED VIOLATIONS OF SECTION 12.A, F AND I OF
THE ACT.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Consent
11. Resolution Date (MM/DD/YYYY):
02/10/2012
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
$25,900,000 IN RESTITUTION AND $30,000 REPAYMENT OF THE COST OF THE INVESTIGATION.
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, MLPFS ENTERED INTO A SETTLEMENT WITH THE
DEPARTMENT RESULTING IN A CONSENT ORDER IN WHICH MLPFS AGREED TO PAY $25,900,000 INTO A FUND TO PROVIDE RESTITUTION TO
MITIGATE AND OFFSET ANY POTENTIAL LOSSES OR INJURIES RESULTING FROM THE ACTIONS OF A FORMER EMPLOYEE. THE FUND IS BEING
ADMINISTERED BY AN INDEPENDENT THIRD PARTY ADMINISTRATOR. $30,000 WAS ALSO PAID AS REPAYMENT TO THE STATE FOR THE COST OF
THE INVESTIGATION. ALL MONIES WERE PAID ON FEBRUARY 17, 2012.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, MLPFS ENTERED INTO A SETTLEMENT RESULTING IN A CONSENT
ORDER IN WHICH IT AGREED TO PAY $25,900,000 IN RESTITUTION AND $30,000 IN REPAYMENT OF EXPENSES.regulatory · block 20PDF pages 196–198
- Regulator name — filed text
- STATE OF NEW HAMPSHIRE BUREAU OF SECURITIES REGULATION ("BUREAU")
- Monetary/Fine Amount — filed text
- $ 447,039.74
- How was matter resolved — filed text
- Settled
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE RESPONDENTS AGREED TO A SERIES OF UNDERTAKINGS DESIGNED TO PROVIDE RELIEF TO ELIGIBLE INVESTORS. THE RESPONDENTS, THROUGH THEIR AFFILIATE BLUE RIDGE, HAVE OFFERED TO PURCHASE AT PAR PLUS ACCRUED AND UNPAID INTEREST OR DIVIDENDS FROM ELIGIBLE INVESTORS CERTAIN ARS THAT HAVE FAILED AT AUCTION. THE RESPONDENTS HAVE ALSO AGREED TO USE REASONABLE EFFORTS TO IDENTIFY ELIGIBLE INVESTORS WHO SOLD CERTAIN ARS BELOW PAR, AND TO PAY SUCH INVESTORS THE DIFFERENCE BETWEEN PAR AND THE PRICE AT WHICH THEY SOLD THE SECURITIES. IN ADDITION, THE RESPONDENTS ARE ENDEAVORING TO IDENTIFY ELIGIBLE INVESTORS WHO TOOK OUT CERTAIN LOANS FROM THE RESPONDENTS THAT WERE SECURED BY ARS THAT WERE NOT SUCCESSFULLY AUCTIONING AT THE TIME OF THE LOAN, AND REIMBURSE THEM TO THE EXTENT THAT THE INTEREST RATE ON THE LOANS EXCEEDED THE INTEREST PAID ON THE ARS. THE RESPONDENTS HAVE ALSO AGREED TO PARTICIPATE IN A SPECIAL ARBITRATION PROCESS FOR THE PURPOSE OF ARBITRATING ANY ELIGIBLE INVESTOR'S CONSEQUENTIAL DAMAGES CLAIM ARISING FROM THE INABILITY TO SELL CERTAIN ARS. FURTHERMORE, THE RESPONDENTS AGREED TO REFUND CERTAIN REFINANCING FEES TO MUNICIPAL AUCTION RATE ISSUERS THAT ISSUED SUCH ARS THROUGH THE RESPONDENTS. THE RESPONDENTS HAVE ALSO UNDERTAKEN TO MAKE THEIR BEST EFFORTS TO WORK WITH ISSUERS AND OTHER INTERESTED PARTIES TO SEEK TO PROVIDE LIQUIDITY SOLUTIONS FOR INSTITUTIONAL INVESTORS THAT ARE NOT CONSIDERED "ELIGIBLE INVESTORS."
Other filed details
Description of allegations — filed text
THE BUREAU ALLEGED THAT MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (AS SUCCESSOR BY MERGER TO BANC OF AMERICA SECURITIES LLC AND BANC OF AMERICA INVESTMENT SERVICES, INC.) (COLLECTIVELY, "RESPONDENTS") INAPPROPRIATELY MARKETED AND SOLD AUCTION RATE SECURITIES ("ARS") WITHOUT ADEQUATELY INFORMING CERTAIN OF THEIR CUSTOMERS OF THE INCREASED RISKS OF ILLIQUIDITY ASSOCIATED WITH ARS. THE BUREAU ALLEGED THAT, THROUGH THIS CONDUCT, THE RESPONDENTS ENGAGED IN DISHONEST AND UNETHICAL PRACTICES IN THE OFFER AND SALE OF SECURITIES AND FAILED TO SUPERVISE THEIR AGENTS.
Sanction detail — filed text
THE RESPONDENTS HAVE PAID $447,039.74 TO THE STATE OF NEW HAMPSHIRE REPRESENTING NEW HAMPSHIRE'S PORTION OF A TOTAL CIVIL PENALTY OF $50,000,000 THAT WILL BE DISTRIBUTED AMONG THE STATES AND U.S. TERRITORIES THAT ENTER INTO SIMILAR ADMINISTRATIVE OR CIVIL CONSENT ORDERS RELATED TO ARS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
STATE OF NEW HAMPSHIRE BUREAU OF SECURITIES REGULATION ("BUREAU")
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CEASE AND DESIST; UNDERTAKING
3.
Date Initiated (MM/DD/YYYY):
04/12/2012
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
I-2009000004
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
AUCTION RATE SECURITIES
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE BUREAU ALLEGED THAT MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (AS SUCCESSOR BY MERGER TO BANC OF AMERICA SECURITIES
LLC AND BANC OF AMERICA INVESTMENT SERVICES, INC.) (COLLECTIVELY, "RESPONDENTS") INAPPROPRIATELY MARKETED AND SOLD AUCTION RATE
SECURITIES ("ARS") WITHOUT ADEQUATELY INFORMING CERTAIN OF THEIR CUSTOMERS OF THE INCREASED RISKS OF ILLIQUIDITY ASSOCIATED WITH
ARS. THE BUREAU ALLEGED THAT, THROUGH THIS CONDUCT, THE RESPONDENTS ENGAGED IN DISHONEST AND UNETHICAL PRACTICES IN THE OFFER
AND SALE OF SECURITIES AND FAILED TO SUPERVISE THEIR AGENTS.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Settled
11. Resolution Date (MM/DD/YYYY):
04/12/2012
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 447,039.74
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
CERTAIN UNDERTAKINGS (SEE 13 BELOW). THE RESPONDENTS HAVE ALSO, THROUGH THEIR AFFILIATE BLUE RIDGE INVESTMENTS, L.L.C. ("BLUE
RIDGE"), OFFERED TO PURCHASE AT PAR PLUS ACCRUED AND UNPAID INTEREST OR DIVIDENDS FROM "ELIGIBLE INVESTORS," AS DEFINED IN
THE ADMINISTRATIVE CONSENT ORDER ("ORDER"), CERTAIN ARS THAT HAVE FAILED AT AUCTION, AND HAVE SUBSTANTIALLY COMPLETED THE
PURCHASE OF THOSE ARS.
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE RESPONDENTS HAVE PAID $447,039.74 TO THE STATE OF NEW HAMPSHIRE REPRESENTING NEW HAMPSHIRE'S PORTION OF A TOTAL CIVIL
PENALTY OF $50,000,000 THAT WILL BE DISTRIBUTED AMONG THE STATES AND U.S. TERRITORIES THAT ENTER INTO SIMILAR ADMINISTRATIVE OR
CIVIL CONSENT ORDERS RELATED TO ARS.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE RESPONDENTS AGREED TO A SERIES OF UNDERTAKINGS DESIGNED TO PROVIDE RELIEF TO
ELIGIBLE INVESTORS. THE RESPONDENTS, THROUGH THEIR AFFILIATE BLUE RIDGE, HAVE OFFERED TO PURCHASE AT PAR PLUS ACCRUED AND UNPAID
INTEREST OR DIVIDENDS FROM ELIGIBLE INVESTORS CERTAIN ARS THAT HAVE FAILED AT AUCTION. THE RESPONDENTS HAVE ALSO AGREED TO USE
REASONABLE EFFORTS TO IDENTIFY ELIGIBLE INVESTORS WHO SOLD CERTAIN ARS BELOW PAR, AND TO PAY SUCH INVESTORS THE DIFFERENCE
BETWEEN PAR AND THE PRICE AT WHICH THEY SOLD THE SECURITIES. IN ADDITION, THE RESPONDENTS ARE ENDEAVORING TO IDENTIFY ELIGIBLE
INVESTORS WHO TOOK OUT CERTAIN LOANS FROM THE RESPONDENTS THAT WERE SECURED BY ARS THAT WERE NOT SUCCESSFULLY AUCTIONING AT
THE TIME OF THE LOAN, AND REIMBURSE THEM TO THE EXTENT THAT THE INTEREST RATE ON THE LOANS EXCEEDED THE INTEREST PAID ON THE ARS.
THE RESPONDENTS HAVE ALSO AGREED TO PARTICIPATE IN A SPECIAL ARBITRATION PROCESS FOR THE PURPOSE OF ARBITRATING ANY ELIGIBLE
INVESTOR'S CONSEQUENTIAL DAMAGES CLAIM ARISING FROM THE INABILITY TO SELL CERTAIN ARS. FURTHERMORE, THE RESPONDENTS AGREED TO
REFUND CERTAIN REFINANCING FEES TO MUNICIPAL AUCTION RATE ISSUERS THAT ISSUED SUCH ARS THROUGH THE RESPONDENTS. THE
RESPONDENTS HAVE ALSO UNDERTAKEN TO MAKE THEIR BEST EFFORTS TO WORK WITH ISSUERS AND OTHER INTERESTED PARTIES TO SEEK TO
PROVIDE LIQUIDITY SOLUTIONS FOR INSTITUTIONAL INVESTORS THAT ARE NOT CONSIDERED "ELIGIBLE INVESTORS."regulatory · block 21PDF pages 198–200
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 10,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $10,000.
Other filed details
Description of allegations — filed text
SEC RULE 611(C) OF REGULATION NMS - MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, DUE TO A CODING ERROR IN ITS SMART ORDER ROUTING TECHNOLOGY, IMPROPERLY ROUNDED PROTECTED MARKET SUB-PENNY QUOTES PRICED TO THREE OR MORE DECIMAL PLACES, CAUSING THE FIRM TO IMPROPERLY ROUTE INTERMARKET SWEEP ORDERS (ISOS) ON A NUMBER OF OCCASIONS AND, IN SOME INSTANCES, TRADE THROUGH PROTECTED QUOTES. AS A RESULT, THE FIRM FAILED TO TAKE REASONABLE STEPS TO ESTABLISH THAT THE INTERMARKET SWEEP ORDERS IT ROUTED IN SUB-PENNY QUOTES MET THE DEFINITIONAL REQUIREMENTS SET FORTH IN RULE 600(B)(30) OF REGULATION NMS.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $10,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 05/09/2012 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 20080123505-01 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: UNSPECIFIED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): SEC RULE 611(C) OF REGULATION NMS - MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, DUE TO A CODING ERROR IN ITS SMART ORDER ROUTING TECHNOLOGY, IMPROPERLY ROUNDED PROTECTED MARKET SUB-PENNY QUOTES PRICED TO THREE OR MORE DECIMAL PLACES, CAUSING THE FIRM TO IMPROPERLY ROUTE INTERMARKET SWEEP ORDERS (ISOS) ON A NUMBER OF OCCASIONS AND, IN SOME INSTANCES, TRADE THROUGH PROTECTED QUOTES. AS A RESULT, THE FIRM FAILED TO TAKE REASONABLE STEPS TO ESTABLISH THAT THE INTERMARKET SWEEP ORDERS IT ROUTED IN SUB-PENNY QUOTES MET THE DEFINITIONAL REQUIREMENTS SET FORTH IN RULE 600(B)(30) OF REGULATION NMS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 05/09/2012 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 10,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $10,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $10,000.
regulatory · block 22PDF pages 200–202
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 17,500.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED, FINED $17,500 FOR MSRB RULE VIOLATIONS AND ORDERED TO PAY $7,425.35, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS. A REGISTERED FIRM PRINCIPAL SHALL SUBMIT SATISFACTORY PROOF OF PAYMENT OF THE RESTITUTION, OR OF REASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECT RESTITUTION TO FINRA NO LATER THAN 120 DAYS AFTER ACCEPTANCE OF THIS AWC. ANY UNDISTRIBUTED RESTITUTION AND INTEREST SHALL BE FORWARDED TO THE APPROPRIATE ESCHEAT, UNCLAIMED PROPERTY OR ABANDONED PROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER LAST RESIDED.
Other filed details
Description of allegations — filed text
MSRB RULES G-17, G-30(A) - MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED SOLD MUNICIPAL SECURITIES FOR ITS OWN ACCOUNT TO CUSTOMERS AT AN AGGREGATE PRICE THAT WAS NOT FAIR AND REASONABLE, TAKING INTO CONSIDERATION ALL RELEVANT FACTORS, INCLUDING THE BEST JUDGMENT OF THE BROKER, DEALER OR MUNICIPAL SECURITIES DEALER AS TO THE FAIR MARKET VALUE OF THE SECURITIES AT THE TIME OF THE TRANSACTION AND OF ANY SECURITIES EXCHANGED OR TRADED IN CONNECTION WITH THE TRANSACTION, THE EXPENSE INVOLVED IN EFFECTING THE TRANSACTION, THE FACT THAT THE BROKER, DEALER, OR MUNICIPAL SECURITIES DEALER IS ENTITLED TO A PROFIT, AND THE TOTAL DOLLAR AMOUNT OF THE TRANSACTION.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED, FINED $17,500 FOR MSRB RULE VIOLATIONS AND ORDERED TO PAY $7,425.35, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS. A REGISTERED FIRM PRINCIPAL SHALL SUBMIT SATISFACTORY PROOF OF PAYMENT OF THE RESTITUTION, OR OF REASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECT RESTITUTION TO FINRA NO LATER THAN 120 DAYS AFTER ACCEPTANCE OF THIS AWC. ANY UNDISTRIBUTED RESTITUTION AND INTEREST SHALL BE FORWARDED TO THE APPROPRIATE ESCHEAT, UNCLAIMED PROPERTY OR ABANDONED PROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER LAST RESIDED.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: RESTITUTION; CENSURE 3. Date Initiated (MM/DD/YYYY): 05/16/2012 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2008014732601 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Debt - Municipal Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): MSRB RULES G-17, G-30(A) - MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED SOLD MUNICIPAL SECURITIES FOR ITS OWN ACCOUNT TO CUSTOMERS AT AN AGGREGATE PRICE THAT WAS NOT FAIR AND REASONABLE, TAKING INTO CONSIDERATION ALL RELEVANT FACTORS, INCLUDING THE BEST JUDGMENT OF THE BROKER, DEALER OR MUNICIPAL SECURITIES DEALER AS TO THE FAIR MARKET VALUE OF THE SECURITIES AT THE TIME OF THE TRANSACTION AND OF ANY SECURITIES EXCHANGED OR TRADED IN CONNECTION WITH THE TRANSACTION, THE EXPENSE INVOLVED IN EFFECTING THE TRANSACTION, THE FACT THAT THE BROKER, DEALER, OR MUNICIPAL SECURITIES DEALER IS ENTITLED TO A PROFIT, AND THE TOTAL DOLLAR AMOUNT OF THE TRANSACTION. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 05/16/2012 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 17,500.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED, FINED $17,500 FOR MSRB RULE VIOLATIONS AND ORDERED TO PAY $7,425.35, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS. A REGISTERED FIRM PRINCIPAL SHALL SUBMIT SATISFACTORY PROOF OF PAYMENT OF THE RESTITUTION, OR OF REASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECT RESTITUTION TO FINRA NO LATER THAN 120 DAYS AFTER ACCEPTANCE OF THIS AWC. ANY UNDISTRIBUTED RESTITUTION AND INTEREST SHALL BE FORWARDED TO THE APPROPRIATE ESCHEAT, UNCLAIMED PROPERTY OR ABANDONED PROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER LAST RESIDED. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED, FINED $17,500 FOR MSRB RULE VIOLATIONS AND ORDERED TO PAY $7,425.35, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS. A REGISTERED FIRM PRINCIPAL SHALL SUBMIT SATISFACTORY PROOF OF PAYMENT OF THE RESTITUTION, OR OF REASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECT RESTITUTION TO FINRA NO LATER THAN 120 DAYS AFTER ACCEPTANCE OF THIS AWC. ANY UNDISTRIBUTED RESTITUTION AND INTEREST SHALL BE FORWARDED TO THE APPROPRIATE ESCHEAT, UNCLAIMED PROPERTY OR ABANDONED PROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER LAST RESIDED.
regulatory · block 23PDF pages 202–204
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 450,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $450,000.
Other filed details
Description of allegations — filed text
FINRA RULE 2010, NASD RULES 2110, 3010 - MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED OFFERED A WIDE RANGE OF STRUCTURED PRODUCTS TO RETAIL CUSTOMERS. FOR MORE THAN THREE YEARS, FIRM CUSTOMERS EFFECTED APPROXIMATELY 650,000 STRUCTURED-PRODUCT PURCHASES, OF WHICH GREATER THAN 50 PERCENT INVOLVED STRUCTURED-PRODUCT OFFERINGS ISSUED BY THE FIRM'S PARENT COMPANY. THE FIRM RELIED ON AUTOMATED EXCEPTION-BASED REPORTING SYSTEMS TO FLAG TRANSACTIONS AND/OR ACCOUNTS THAT MET CERTAIN PRE-DEFINED CRITERIA. THE VARIOUS REPORTING SYSTEMS EMPLOYED BY THE FIRM ARE UTILIZED BY DEDICATED REVIEW UNITS OR TEAMS CHARGED WITH FOLLOW-UP INVESTIGATION OF EXCEPTIONS REPORTED. OF THE SEVERAL EXCEPTION-BASED REPORTING SYSTEMS UTILIZED BY THE FIRM, NONE, PRIOR TO MARCH 1, 2009, SPECIFICALLY MONITORED FOR POTENTIALLY UNSUITABLE CONCENTRATION LEVELS IN STRUCTURED PRODUCTS IN CUSTOMER ACCOUNTS.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $450,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 06/11/2012 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2010022011901 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: STRUCTURED PRODUCTS 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): FINRA RULE 2010, NASD RULES 2110, 3010 - MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED OFFERED A WIDE RANGE OF STRUCTURED PRODUCTS TO RETAIL CUSTOMERS. FOR MORE THAN THREE YEARS, FIRM CUSTOMERS EFFECTED APPROXIMATELY 650,000 STRUCTURED-PRODUCT PURCHASES, OF WHICH GREATER THAN 50 PERCENT INVOLVED STRUCTURED-PRODUCT OFFERINGS ISSUED BY THE FIRM'S PARENT COMPANY. THE FIRM RELIED ON AUTOMATED EXCEPTION-BASED REPORTING SYSTEMS TO FLAG TRANSACTIONS AND/OR ACCOUNTS THAT MET CERTAIN PRE-DEFINED CRITERIA. THE VARIOUS REPORTING SYSTEMS EMPLOYED BY THE FIRM ARE UTILIZED BY DEDICATED REVIEW UNITS OR TEAMS CHARGED WITH FOLLOW-UP INVESTIGATION OF EXCEPTIONS REPORTED. OF THE SEVERAL EXCEPTION-BASED REPORTING SYSTEMS UTILIZED BY THE FIRM, NONE, PRIOR TO MARCH 1, 2009, SPECIFICALLY MONITORED FOR POTENTIALLY UNSUITABLE CONCENTRATION LEVELS IN STRUCTURED PRODUCTS IN CUSTOMER ACCOUNTS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 06/11/2012 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 450,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $450,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $450,000.
regulatory · block 24PDF pages 204–206
- Regulator name — filed text
- NASDAQ STOCK MARKET
- Monetary/Fine Amount — filed text
- $ 12,500.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $12,500.
Other filed details
Description of allegations — filed text
NASDAQ RULES 4613(E), 4755(A)(4) - MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED FAILED TO REASONABLY AVOID DISPLAYING AND ENGAGED IN A PATTERN OR PRACTICE OF DISPLAYING QUOTATIONS THAT LOCKED OR CROSSED A PROTECTED QUOTATION, IN THAT, IT ENTERED INTERMARKET SWEEP ORDERS INTO THE NASDAQ SINGLE BOOK EXECUTION SYSTEM THAT LOCKED OR CROSSED A QUOTATION PREVIOUSLY DISSEMINATED PURSUANT TO AN EFFECTIVE NATIONAL MARKET SYSTEM PLAN AND FAILED TO SIMULTANEOUSLY ROUTE AN INTERMARKET SWEEP ORDER TO EXECUTE AGAINST THE FULL DISPLAYED SIZE OF THE LOCKED OR CROSSED QUOTE.
Sanction detail — filed text
p y WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $12,500.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to y g g y y y ( ) the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) NASDAQ STOCK MARKET 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 06/01/2012 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2009018958801 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: NASDAQ SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): NASDAQ RULES 4613(E), 4755(A)(4) - MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED FAILED TO REASONABLY AVOID DISPLAYING AND ENGAGED IN A PATTERN OR PRACTICE OF DISPLAYING QUOTATIONS THAT LOCKED OR CROSSED A PROTECTED QUOTATION, IN THAT, IT ENTERED INTERMARKET SWEEP ORDERS INTO THE NASDAQ SINGLE BOOK EXECUTION SYSTEM THAT LOCKED OR CROSSED A QUOTATION PREVIOUSLY DISSEMINATED PURSUANT TO AN EFFECTIVE NATIONAL MARKET SYSTEM PLAN AND FAILED TO SIMULTANEOUSLY ROUTE AN INTERMARKET SWEEP ORDER TO EXECUTE AGAINST THE FULL DISPLAYED SIZE OF THE LOCKED OR CROSSED QUOTE. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 06/01/2012 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 12,500.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: p y WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $12,500. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $12,500.
regulatory · block 25PDF pages 206–208
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 2,800,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
ALLEGATIONS CONTINUED: THE FIRM FAILED TO DELIVER CERTAIN PROXIES AND VOTING MATERIALS IN ACCORDANCE WITH CUSTOMER DIRECTIVES. IT FAILED TO ENFORCE ITS PROCEDURES REQUIRING THE PROCESSING OF A PROXY MISMATCH REPORT AND THE CORRECTION OF INFORMATION IDENTIFIED IN THE REPORT. THE FIRM IMPROPERLY AGGREGATED PROXIES AND A THIRD-PARTY VENDOR CAUSED PROXIES TO BE MISDIRECTED BECAUSE IT RELIED ON OUTDATED AND INCORRECT PROXY-DELIVERY DESIGNATIONS. THE FIRM FAILED TO SEND MARGIN RISK DISCLOSURE STATEMENTS TO CUSTOMERS BECAUSE A CODING ISSUE INCORRECTLY BLOCKED THE DELIVERY OF ITS WELCOME KIT TO CUSTOMERS. THE FIRM IDENTIFIED OVER 16,000 CUSTOMERS ON THE MONEY MANAGER PLATFORM WHO DID NOT RECEIVE ITS BUSINESS CONTINUITY PLAN BECAUSE THE WELCOME KIT WAS SUPPRESSED. IN DETERMINING THE APPROPRIATE SANCTIONS, FINRA CONSIDERED THE FIRM'S INTERNAL REVIEW THROUGH WHICH IT SELF-IDENTIFIED THESE VIOLATIONS, THE REMEDIAL MEASURES IT TOOK TO CORRECT ITS SYSTEM AND PROCEDURES, AND ITS EFFORTS TO PROVIDE REMEDIATION TO CUSTOMERS. WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $2,800,000.
Other filed details
Description of allegations — filed text
SECTIONS 10, 17(A) OF THE SECURITIES EXCHANGE ACT, SEC RULES 10B-10(A), 10B-10(A)(2), 17A-3, 17A-4, FINRA RULES 2010, 2251(A), 2264, 4370, NASD RULES 2110, 2230, 2260(A), 2341, 3010, 3510(E) - MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, CONTRARY TO APPLICABLE CUSTOMER DISCLOSURES OR APPLICABLE PROGRAM INVESTMENT GUIDELINES, RELIED ON IMPROPERLY CODED DATA IN ITS SECURITIES MASTER DATABASE, WHICH CAUSED IT TO CHARGE FEES ON CERTAIN INELIGIBLE SECURITIES WHICH TYPICALLY WERE SECURITIES AFFILIATED WITH THE FIRM SO IT OVERCHARGED CUSTOMERS A TOTAL OF $9,460,351. WHEN CALCULATING THE REMEDIATION FOR THE THREE INVESTMENT ADVISORY PROGRAMS, IT DISCOVERED THAT ITS BILLING SYSTEM FOR TWO OF THEM DID NOT PROPERLY IDENTIFY ACCOUNTS HOLDING 100% FIXED INCOME SECURITIES TO ENSURE THAT THE LOWER FIXED INCOME FEE SCHEDULE WAS APPLIED AND FOR THE THIRD, THE FEE SCHEDULE WAS DETERMINED BY THE CHOSEN INVESTMENT STRATEGY AT THE TIME OF CUSTOMER ENROLLMENT AND DID NOT MONITOR CHANGES IN INVESTMENT STRATEGY TO DETERMINE WHETHER THE MORE FAVORABLE FIXED INCOME FEE SHOULD APPLY. THE FIRM OVERCHARGED CUSTOMERS IN THE PROGRAMS $6,782,576 BY NOT BILLING AT THE APPLICABLE FIXED INCOME FEE SCHEDULE. THE BILLING PROCESS FOR ONE PROGRAM ERRONEOUSLY ALLOWED FOR FLAT RATE BILLING TO EXCEED THE MAXIMUM TIERED FEE RATE SO THAT IT OVERCHARGED CUSTOMERS $3,486,846. THE FIRM OFFERED NO-LOAD MUTUAL FUNDS FOR CUSTOMER RETIREMENT ACCOUNTS IN SEVERAL INVESTMENT PROGRAMS BUT ITS REBATING PROCESS DID NOT TAKE INTO ACCOUNT THAT LOAD FUNDS AND NO-LOAD FUNDS WERE TREATED DIFFERENTLY WHEN COLLECTING SUBACCOUNTING AND 12B-1 FEES FROM THE MUTUAL FUND COMPANIES. THE FIRM DID NOT REBATE $1,987,752 IN SUB-ACCOUNTING FEES ON NO-LOAD FUND TRANSACTIONS FOR CUSTOMER ACCOUNTS. FOR SOME PROGRAMS, THE CONTRACT AND DISCLOSURE DOCUMENTS STATED THAT THE FEE RATE APPLIED WOULD BE BASED ON THE AGGREGATE VALUE OF THE ASSETS IN ALL THE CUSTOMER'S PROGRAM ACCOUNTS BUT THE FIRM DID NOT ALWAYS AUTOMATICALLY UPDATE THE ACCOUNTS' ASSET VALUES WHICH RESULTED IN CUSTOMERS NOT RECEIVING THE APPROPRIATE FEE DISCOUNT. THE FIRM OVERCHARGED CUSTOMER ACCOUNTS, RESULTING IN EXCESS FEES OF $8,061,426. THE FIRM ALLOWED A NEW ACCOUNT TO BE AGGREGATED WITH AN EXISTING GROUP OF ACCOUNTS AND HAVE A FLAT RATE APPLY BASED ON TOTAL ASSET LEVELS BUT THE FIRM'S SYSTEM ERRONEOUSLY APPLIED THE SAME FLAT RATE. THE FIRM OVERCHARGED CUSTOMER ACCOUNTS A TOTAL OF $565,372. NEW CUSTOMER ACCOUNTS IN ONE PROGRAM WERE OPENED USING DOCUMENTS REFLECTING A LOWER FEE SCHEDULE BUT WERE PLACED IN A HIGHER FEE SCHEDULE SO THE CUSTOMERS WERE IMPROPERLY CHARGED $1,123,386 IN HIGHER FEES. IN ONE PROGRAM, CUSTOMERS WERE CHARGED AN ESTIMATED $706,660 IN WIRE TRANSFER FEES EVEN THOUGH DOCUMENTS HAD NOT ADEQUATELY DISCLOSED SUCH CHARGES. AS A RESULT OF THESE SUPERVISORY FAILURES, THE FIRM CHARGED CUSTOMER ACCOUNTS UNWARRANTED FEES TOTALING AT LEAST $32,174,369. THE FIRM HAS COMPLETED REMEDIATION WITH INTEREST OF AFFECTED CUSTOMERS. FOR OVER FOUR YEARS, THE FIRM FAILED TO DELIVER TRADE CONFIRMATIONS FOR OVER 10 MILLION TRANSACTIONS TO CUSTOMER ACCOUNTS AS REQUIRED UNDER THE EXCHANGE ACT AND FAILED TO SEND TRADE CONFIRMATIONS TO CUSTOMERS BECAUSE OF CODING ERRORS AND OTHER DEFICIENCIES THAT WERE NOT PROMPTLY REMEDIED AND LASTED OVER SEVERAL YEARS. FOR APPROXIMATELY NINE YEARS, THE FIRM FAILED TO STATE, OR INACCURATELY STATED, IN TRADE CONFIRMATIONS OR ACCOUNT STATEMENTS THAT IT SENT FOR AT LEAST SEVEN MILLION TRANSACTIONS, WHETHER IT ACTED AS AN AGENT, DUAL AGENT, OR A PRINCIPAL FOR THE TRANSACTION. [CONTINUED IN COMMENT SECTION]
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $2,800,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 06/21/2012 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2008014187701 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: INVESTMENT ADVISORY PROGRAMS 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): SECTIONS 10, 17(A) OF THE SECURITIES EXCHANGE ACT, SEC RULES 10B-10(A), 10B-10(A)(2), 17A-3, 17A-4, FINRA RULES 2010, 2251(A), 2264, 4370, NASD RULES 2110, 2230, 2260(A), 2341, 3010, 3510(E) - MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, CONTRARY TO APPLICABLE CUSTOMER DISCLOSURES OR APPLICABLE PROGRAM INVESTMENT GUIDELINES, RELIED ON IMPROPERLY CODED DATA IN ITS SECURITIES MASTER DATABASE, WHICH CAUSED IT TO CHARGE FEES ON CERTAIN INELIGIBLE SECURITIES WHICH TYPICALLY WERE SECURITIES AFFILIATED WITH THE FIRM SO IT OVERCHARGED CUSTOMERS A TOTAL OF $9,460,351. WHEN CALCULATING THE REMEDIATION FOR THE THREE INVESTMENT ADVISORY PROGRAMS, IT DISCOVERED THAT ITS BILLING SYSTEM FOR TWO OF THEM DID NOT PROPERLY IDENTIFY ACCOUNTS HOLDING 100% FIXED INCOME SECURITIES TO ENSURE THAT THE LOWER FIXED INCOME FEE SCHEDULE WAS APPLIED AND FOR THE THIRD, THE FEE SCHEDULE WAS DETERMINED BY THE CHOSEN INVESTMENT STRATEGY AT THE TIME OF CUSTOMER ENROLLMENT AND DID NOT MONITOR CHANGES IN INVESTMENT STRATEGY TO DETERMINE WHETHER THE MORE FAVORABLE FIXED INCOME FEE SHOULD APPLY. THE FIRM OVERCHARGED CUSTOMERS IN THE PROGRAMS $6,782,576 BY NOT BILLING AT THE APPLICABLE FIXED INCOME FEE SCHEDULE. THE BILLING PROCESS FOR ONE PROGRAM ERRONEOUSLY ALLOWED FOR FLAT RATE BILLING TO EXCEED THE MAXIMUM TIERED FEE RATE SO THAT IT OVERCHARGED CUSTOMERS $3,486,846. THE FIRM OFFERED NO-LOAD MUTUAL FUNDS FOR CUSTOMER RETIREMENT ACCOUNTS IN SEVERAL INVESTMENT PROGRAMS BUT ITS REBATING PROCESS DID NOT TAKE INTO ACCOUNT THAT LOAD FUNDS AND NO-LOAD FUNDS WERE TREATED DIFFERENTLY WHEN COLLECTING SUBACCOUNTING AND 12B-1 FEES FROM THE MUTUAL FUND COMPANIES. THE FIRM DID NOT REBATE $1,987,752 IN SUB-ACCOUNTING FEES ON NO-LOAD FUND TRANSACTIONS FOR CUSTOMER ACCOUNTS. FOR SOME PROGRAMS, THE CONTRACT AND DISCLOSURE DOCUMENTS STATED THAT THE FEE RATE APPLIED WOULD BE BASED ON THE AGGREGATE VALUE OF THE ASSETS IN ALL THE CUSTOMER'S PROGRAM ACCOUNTS BUT THE FIRM DID NOT ALWAYS AUTOMATICALLY UPDATE THE ACCOUNTS' ASSET VALUES WHICH RESULTED IN CUSTOMERS NOT RECEIVING THE APPROPRIATE FEE DISCOUNT. THE FIRM OVERCHARGED CUSTOMER ACCOUNTS, RESULTING IN EXCESS FEES OF $8,061,426. THE FIRM ALLOWED A NEW ACCOUNT TO BE AGGREGATED WITH AN EXISTING GROUP OF ACCOUNTS AND HAVE A FLAT RATE APPLY BASED ON TOTAL ASSET LEVELS BUT THE FIRM'S SYSTEM ERRONEOUSLY APPLIED THE SAME FLAT RATE. THE FIRM OVERCHARGED CUSTOMER ACCOUNTS A TOTAL OF $565,372. NEW CUSTOMER ACCOUNTS IN ONE PROGRAM WERE OPENED USING DOCUMENTS REFLECTING A LOWER FEE SCHEDULE BUT WERE PLACED IN A HIGHER FEE SCHEDULE SO THE CUSTOMERS WERE IMPROPERLY CHARGED $1,123,386 IN HIGHER FEES. IN ONE PROGRAM, CUSTOMERS WERE CHARGED AN ESTIMATED $706,660 IN WIRE TRANSFER FEES EVEN THOUGH DOCUMENTS HAD NOT ADEQUATELY DISCLOSED SUCH CHARGES. AS A RESULT OF THESE SUPERVISORY FAILURES, THE FIRM CHARGED CUSTOMER ACCOUNTS UNWARRANTED FEES TOTALING AT LEAST $32,174,369. THE FIRM HAS COMPLETED REMEDIATION WITH INTEREST OF AFFECTED CUSTOMERS. FOR OVER FOUR YEARS, THE FIRM FAILED TO DELIVER TRADE CONFIRMATIONS FOR OVER 10 MILLION TRANSACTIONS TO CUSTOMER ACCOUNTS AS REQUIRED UNDER THE EXCHANGE ACT AND FAILED TO SEND TRADE CONFIRMATIONS TO CUSTOMERS BECAUSE OF CODING ERRORS AND OTHER DEFICIENCIES THAT WERE NOT PROMPTLY REMEDIED AND LASTED OVER SEVERAL YEARS. FOR APPROXIMATELY NINE YEARS, THE FIRM FAILED TO STATE, OR INACCURATELY STATED, IN TRADE CONFIRMATIONS OR ACCOUNT STATEMENTS THAT IT SENT FOR AT LEAST SEVEN MILLION TRANSACTIONS, WHETHER IT ACTED AS AN AGENT, DUAL AGENT, OR A PRINCIPAL FOR THE TRANSACTION. [CONTINUED IN COMMENT SECTION] 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 06/21/2012 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 2,800,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $2,800,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). ALLEGATIONS CONTINUED: THE FIRM FAILED TO DELIVER CERTAIN PROXIES AND VOTING MATERIALS IN ACCORDANCE WITH CUSTOMER DIRECTIVES. IT FAILED TO ENFORCE ITS PROCEDURES REQUIRING THE PROCESSING OF A PROXY MISMATCH REPORT AND THE CORRECTION OF INFORMATION IDENTIFIED IN THE REPORT. THE FIRM IMPROPERLY AGGREGATED PROXIES AND A THIRD-PARTY VENDOR CAUSED PROXIES TO BE MISDIRECTED BECAUSE IT RELIED ON OUTDATED AND INCORRECT PROXY-DELIVERY DESIGNATIONS. THE FIRM FAILED TO SEND MARGIN RISK DISCLOSURE STATEMENTS TO CUSTOMERS BECAUSE A CODING ISSUE INCORRECTLY BLOCKED THE DELIVERY OF ITS WELCOME KIT TO CUSTOMERS. THE FIRM IDENTIFIED OVER 16,000 CUSTOMERS ON THE MONEY MANAGER PLATFORM WHO DID NOT RECEIVE ITS BUSINESS CONTINUITY PLAN BECAUSE THE WELCOME KIT WAS SUPPRESSED. IN DETERMINING THE APPROPRIATE SANCTIONS, FINRA CONSIDERED THE FIRM'S INTERNAL REVIEW THROUGH WHICH IT SELF-IDENTIFIED THESE VIOLATIONS, THE REMEDIAL MEASURES IT TOOK TO CORRECT ITS SYSTEM AND PROCEDURES, AND ITS EFFORTS TO PROVIDE REMEDIATION TO CUSTOMERS. WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $2,800,000.
regulatory · block 26PDF pages 208–210
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 50,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM (AS SUCCESSOR BY MERGER TO BAIS) CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $50,000.
Other filed details
Description of allegations — filed text
SECTIONS 10B-10(A) OF THE SECURITIES EXCHANGE ACT AND NASD RULES 2230 AND 2110 - BETWEEN MAY 2003 AND JUNE 2006, BANC OF AMERICA INVESTMENT SERVICES, INC. ("BAIS") (WHICH MERGED INTO MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ON OCTOBER 23, 2009) FAILED TO SEND CONTEMPORANEOUS TRADE CONFIRMATIONS TO CUSTOMERS ENROLLED IN ONE OF ITS INVESTMENT PROGRAMS. SPECIFICALLY, BAIS FAILED TO SEND IMMEDIATE TRADE CONFIRMATIONS TO APPROXIMATELY 2,702 CUSTOMER ACCOUNTS IN THE ADVISED VERSION (NON- DISCRETIONARY) OF ITS CONSULTING SERVICES FUND STRATEGIES PROGRAM, WHICH AFFECTED APPROXIMATELY 23,450 TRANSACTIONS AND APPROXIMATELY $323,475,815 DOLLARS IN ASSETS. ACCORDINGLY, BAIS VIOLATED EXCHANGE ACT 10B-10(A) AND NASD RULES 2230 AND 2110 BY FAILING TO DELIVER REQUIRED TRADE CONFIRMATIONS TO CERTAIN CUSTOMERS.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM (AS SUCCESSOR BY MERGER TO BAIS) CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $50,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
FINRA
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE
3.
Date Initiated (MM/DD/YYYY):
06/21/2012
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
2008014187702
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
INVESTMENT ADVISORY PROGRAMS
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
SECTIONS 10B-10(A) OF THE SECURITIES EXCHANGE ACT AND NASD RULES 2230 AND 2110 - BETWEEN MAY 2003 AND JUNE 2006, BANC OF AMERICA
INVESTMENT SERVICES, INC. ("BAIS") (WHICH MERGED INTO MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ON OCTOBER 23, 2009)
FAILED TO SEND CONTEMPORANEOUS TRADE CONFIRMATIONS TO CUSTOMERS ENROLLED IN ONE OF ITS INVESTMENT PROGRAMS. SPECIFICALLY, BAIS
FAILED TO SEND IMMEDIATE TRADE CONFIRMATIONS TO APPROXIMATELY 2,702 CUSTOMER ACCOUNTS IN THE ADVISED VERSION (NON-
DISCRETIONARY) OF ITS CONSULTING SERVICES FUND STRATEGIES PROGRAM, WHICH AFFECTED APPROXIMATELY 23,450 TRANSACTIONS AND
APPROXIMATELY $323,475,815 DOLLARS IN ASSETS. ACCORDINGLY, BAIS VIOLATED EXCHANGE ACT 10B-10(A) AND NASD RULES 2230 AND 2110 BY
FAILING TO DELIVER REQUIRED TRADE CONFIRMATIONS TO CERTAIN CUSTOMERS.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
06/21/2012
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 50,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM (AS SUCCESSOR BY MERGER TO BAIS) CONSENTED TO THE DESCRIBED SANCTIONS
AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $50,000.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM (AS SUCCESSOR BY MERGER TO BAIS) CONSENTED TO THE DESCRIBED SANCTIONS AND TO
THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $50,000.regulatory · block 27PDF pages 210–212
- Regulator name — filed text
- STATE OF NEW YORK OFFICE OF THE ATTORNEY GENERAL
- Monetary/Fine Amount — filed text
- $ 875,670.00
- How was matter resolved — filed text
- Settled
Action status / disposition — filed text
UNDER THE TERMS OF THE SETTLEMENT, MLPFS AGREED TO CERTAIN UNDERTAKINGS, INCLUDING ESTABLISHING AND MAINTAINING A TRADE MONITORING SYSTEM AND FILING A REPORT WITH THE NYAG DESCRIBING CERTAIN MONITORING IMPROVEMENTS.
Other filed details
Description of allegations — filed text
THE STATE OF NEW YORK OFFICE OF THE ATTORNEY GENERAL (NYAG) ALLEGED THAT IN CONNECTION WITH THE SALE OF SECURITIES IN NEW YORK BY CERTAIN MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS) CLIENT ASSOCIATES (CAS) WHO WERE NOT REGISTERED IN NEW YORK, MLPFS FAILED TO ESTABLISH AN ADEQUATE SYSTEM TO MONITOR THE REGISTRATION STATUS OF CAS ACCEPTING CLIENT ORDERS, FAILED TO HAVE ADEQUATE WRITTEN PROCEDURES AND TO ENFORCE ITS ESTABLISHED PROCEDURES REASONABLY DESIGNED TO PREVENT AND DETECT VIOLATIONS OF THE LAW, AND SOLD SECURITIES IN NEW YORK THROUGH UNREGISTERED SALESMEN.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, MLPFS ENTERED INTO A SETTLEMENT WITH THE NYAG, IN WHICH IT AGREED TO CEASE AND DESIST FROM ENGAGING IN THE SALE OF SECURITIES IN NEW YORK THROUGH PERSONS NOT REGISTERED WITH THE NYAG, TO COMPLY WITH THE PROVISIONS OF, AND NOT ENGAGE IN ANY ACTS IN VIOLATION OF GBL SECTIONS 359-E OR 359-F AND TO COMPLY WITH CERTAIN UNDERTAKINGS. MLPFS AGREED TO PAY THE NYAG $875,670.00, AS PART OF A TOTAL PAYMENT, CONSISTING OF FINES, PENALTIES AND ANY OTHER MONETARY SANCTIONS, OF $26,563,094.50 THAT WILL BE ALLOCATED AMONG THE 50 STATES, THE DISTRICT OF COLUMBIA, PUERTO RICO, AND THE U.S. VIRGIN ISLANDS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) STATE OF NEW YORK OFFICE OF THE ATTORNEY GENERAL 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CEASE AND DESIST; UNDERTAKING; REIMBURSEMENT OF COST OF INVESTIGATION. 3. Date Initiated (MM/DD/YYYY): 05/02/2012 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: AOD #12-011 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: SALE OF SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE STATE OF NEW YORK OFFICE OF THE ATTORNEY GENERAL (NYAG) ALLEGED THAT IN CONNECTION WITH THE SALE OF SECURITIES IN NEW YORK BY CERTAIN MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS) CLIENT ASSOCIATES (CAS) WHO WERE NOT REGISTERED IN NEW YORK, MLPFS FAILED TO ESTABLISH AN ADEQUATE SYSTEM TO MONITOR THE REGISTRATION STATUS OF CAS ACCEPTING CLIENT ORDERS, FAILED TO HAVE ADEQUATE WRITTEN PROCEDURES AND TO ENFORCE ITS ESTABLISHED PROCEDURES REASONABLY DESIGNED TO PREVENT AND DETECT VIOLATIONS OF THE LAW, AND SOLD SECURITIES IN NEW YORK THROUGH UNREGISTERED SALESMEN. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Settled 11. Resolution Date (MM/DD/YYYY): 05/02/2012 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 875,670.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKINGS Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, MLPFS ENTERED INTO A SETTLEMENT WITH THE NYAG, IN WHICH IT AGREED TO CEASE AND DESIST FROM ENGAGING IN THE SALE OF SECURITIES IN NEW YORK THROUGH PERSONS NOT REGISTERED WITH THE NYAG, TO COMPLY WITH THE PROVISIONS OF, AND NOT ENGAGE IN ANY ACTS IN VIOLATION OF GBL SECTIONS 359-E OR 359-F AND TO COMPLY WITH CERTAIN UNDERTAKINGS. MLPFS AGREED TO PAY THE NYAG $875,670.00, AS PART OF A TOTAL PAYMENT, CONSISTING OF FINES, PENALTIES AND ANY OTHER MONETARY SANCTIONS, OF $26,563,094.50 THAT WILL BE ALLOCATED AMONG THE 50 STATES, THE DISTRICT OF COLUMBIA, PUERTO RICO, AND THE U.S. VIRGIN ISLANDS. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). UNDER THE TERMS OF THE SETTLEMENT, MLPFS AGREED TO CERTAIN UNDERTAKINGS, INCLUDING ESTABLISHING AND MAINTAINING A TRADE MONITORING SYSTEM AND FILING A REPORT WITH THE NYAG DESCRIBING CERTAIN MONITORING IMPROVEMENTS.
regulatory · block 28PDF pages 212–213
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 450,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $450,000. THE FIRM HAS REPAID ALL THE AFFECTED CUSTOMERS.
Other filed details
Description of allegations — filed text
FINRA RULE 2010, NASD RULES 2110, 3010, 3012(A)(2)(B)(I) - MERRILL LYNCH'S SUPERVISORY CONTROL SYSTEM FAILED TO INCLUDE A POLICY OR PROCEDURE REQUIRING A REVIEW TO DETECT OR PREVENT MULTIPLE TRANSMITTALS OF FUNDS FROM MULTIPLE CUSTOMERS GOING TO THE SAME THIRD PARTY ACCOUNTS. THE FIRM'S SYSTEM FAILED TO INCLUDE EXCEPTION REPORTS THAT WOULD HAVE IDENTIFIED MULTIPLE CUSTOMER WIRES GOING TO THE SAME THIRD PARTY ACCOUNT. CONSEQUENTLY, THE FIRM FAILED TO DETECT THAT A REGISTERED REPRESENTATIVE HAD INITIATED FUND TRANSFERS TOTALING APPROXIMATELY $887,931 OUT OF CUSTOMER ACCOUNTS TO BANK ACCOUNTS HE APPARENTLY CONTROLLED. THE REGISTERED REPRESENTATIVE HAS BEEN BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $450,000. THE FIRM HAS REPAID ALL THE AFFECTED CUSTOMERS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 08/03/2012 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2010022652202 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: WIRE TRANSFERS 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): FINRA RULE 2010, NASD RULES 2110, 3010, 3012(A)(2)(B)(I) - MERRILL LYNCH'S SUPERVISORY CONTROL SYSTEM FAILED TO INCLUDE A POLICY OR PROCEDURE REQUIRING A REVIEW TO DETECT OR PREVENT MULTIPLE TRANSMITTALS OF FUNDS FROM MULTIPLE CUSTOMERS GOING TO THE SAME THIRD PARTY ACCOUNTS. THE FIRM'S SYSTEM FAILED TO INCLUDE EXCEPTION REPORTS THAT WOULD HAVE IDENTIFIED MULTIPLE CUSTOMER WIRES GOING TO THE SAME THIRD PARTY ACCOUNT. CONSEQUENTLY, THE FIRM FAILED TO DETECT THAT A REGISTERED REPRESENTATIVE HAD INITIATED FUND TRANSFERS TOTALING APPROXIMATELY $887,931 OUT OF CUSTOMER ACCOUNTS TO BANK ACCOUNTS HE APPARENTLY CONTROLLED. THE REGISTERED REPRESENTATIVE HAS BEEN BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 08/03/2012 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 450,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $450,000. THE FIRM HAS REPAID ALL THE AFFECTED CUSTOMERS. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $450,000. THE FIRM HAS REPAID ALL THE AFFECTED CUSTOMERS.
regulatory · block 29PDF pages 213–215
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 37,500.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE IT IS CENSURED AND FINED $37,500.
Other filed details
Description of allegations — filed text
SEC RULE 611(A)(1) OF REGULATION NMS, NASD RULE 4632(A): THE FIRM FAILED TO ENFORCE ITS WRITTEN POLICIES AND PROCEDURES THAT WERE REASONABLY DESIGNED TO PREVENT TRADE-THROUGHS OF PROTECTED QUOTATIONS IN NMS STOCKS THAT DO NOT FALL WITHIN ANY APPLICABLE EXCEPTION, AND IF RELYING ON AN EXCEPTION, ARE REASONABLY DESIGNED TO ASSURE COMPLIANCE WITH THE TERMS OF THE EXCEPTION. THE FIRM INCORRECTLY REPORTED APPROXIMATELY 400 ORDERS-REPRESENTED BY 14,706 TRADES-TO ACT AS TRADE-THROUGH EXEMPT WHEN THE TRADES DID NOT QUALIFY FOR AN EXEMPTION FROM SEC RULE 611 OF REGULATION NMS.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE IT IS CENSURED AND FINED $37,500.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 08/21/2012 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2008012898601 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: UNSPECIFIED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): SEC RULE 611(A)(1) OF REGULATION NMS, NASD RULE 4632(A): THE FIRM FAILED TO ENFORCE ITS WRITTEN POLICIES AND PROCEDURES THAT WERE REASONABLY DESIGNED TO PREVENT TRADE-THROUGHS OF PROTECTED QUOTATIONS IN NMS STOCKS THAT DO NOT FALL WITHIN ANY APPLICABLE EXCEPTION, AND IF RELYING ON AN EXCEPTION, ARE REASONABLY DESIGNED TO ASSURE COMPLIANCE WITH THE TERMS OF THE EXCEPTION. THE FIRM INCORRECTLY REPORTED APPROXIMATELY 400 ORDERS-REPRESENTED BY 14,706 TRADES-TO ACT AS TRADE-THROUGH EXEMPT WHEN THE TRADES DID NOT QUALIFY FOR AN EXEMPTION FROM SEC RULE 611 OF REGULATION NMS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 08/21/2012 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 37,500.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE IT IS CENSURED AND FINED $37,500. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE IT IS CENSURED AND FINED $37,500.
regulatory · block 30PDF pages 215–217
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 400,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE, THE FIRM IS CENSURED, FINED $400,000, WHICH INCLUDES DISGORGEMENT OF COMMISSION RECEIVED OF $47,190.03 AND REQUIRED TO PAY $130,718, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS ON OR BEFORE THE DATE THIS AWC IS ACCEPTED BY FINRA. BY LETTER DATED AUGUST 14, 2012, THE FIRM PROVIDED DOCUMENTATION ESTABLISHING THAT IT PAID $130,718 IN RESTITUTION, PLUS $21,174.11 IN INTEREST, CONSISTENT WITH THE TERMS OF THE AWC.
Other filed details
Description of allegations — filed text
FINRA RULE 2010,NASD RULES 2110, 2310, 3010(A) AND (B): A FORMER BROKER OF THE FIRM RECOMMENDED HIS CUSTOMERS ENGAGE IN A PATTERN OF UNSUITABLE SHORT-TERM CLOSED-END FUNDS (CEF) AND UNIT INVESTMENT TRUSTS (UIT) TRADING. MOST OF THE BROKER'S SHORT-TERM TRANSACTIONS INVOLVED CLOSED-END FUNDS PURCHASED AT INITIAL PUBLIC OFFERING, WITH THE SALES CHARGES TO THE CUSTOMER BUILT INTO THE OFFERING PRICE. EVEN THOUGH CEFS AND UITS GENERALLY WERE INTENDED AS LONGER-TERM INVESTMENTS, THE BROKER RECOMMENDED THAT SOME OF THESE CUSTOMERS SELL THEIR ENTIRE POSITIONS AS SOON AS TWO MONTHS AFTER PURCHASE. MOST OF THE SHORT-TERM CEF TRANSACTIONS INVOLVED SWITCHING, WHEREBY THE BROKER GENERATED FUNDS TO PURCHASE ONE CEF OR UIT BY SELLING ANOTHER CEF, WITH THE CUSTOMER GAINING LITTLE OR NO ECONOMIC BENEFIT FROM THE EXCHANGE. THE FIRM, THROUGH THE BROKER, MADE THESE RECOMMENDATIONS TO PURCHASE AND SELL CEFS AND UITS ON A SHORT-TERM BASIS WITHOUT HAVING REASONABLE GROUNDS FOR BELIEVING THE RECOMMENDATIONS WERE SUITABLE IN VIEW OF THE FREQUENCY AND SIZE OF THE TRANSACTIONS AND EACH CUSTOMER'S INVESTMENT OBJECTIVES, FINANCIAL SITUATION, AND NEEDS. THE FIRM, THROUGH THE BROKER, MADE UNSUITABLE RECOMMENDATIONS, INCONSISTENT WITH THE CUSTOMERS' INVESTMENT OBJECTIVES, TO SEVEN CUSTOMERS THAT THEY OPEN MARGIN ACCOUNTS AND USE MARGIN TO BUY AND SELL SECURITIES. THESE CUSTOMERS PAID IN AGGREGATE OVER $70,000 IN MARGIN INTEREST. THE FIRM FAILED TO DETECT THAT THE BROKER WAS ENGAGING IN A PATTERN OF UNSUITABLE SHORT-TERM TRADING OF CEFS AND UITS AND SUITABLE TRANSACTIONS ON MARGIN. THE FIRM APPROVED EACH OF THE BROKER'S SHORT-TERM CEF AND UIT TRANSACTIONS, FAILING TO IDENTIFY THE TRANSACTIONS AS UNSUITABLE. IN ADDITION, THE FIRM FAILED TO RESPOND ADEQUATELY TO EXCEPTION REPORTS AND INFORMATION SUGGESTING THAT THE BROKER WAS ENGAGED IN A PATTERN OF UNSUITABLE USE OF MARGIN IN TRADE SECURITIES AND DID NOT SPEAK WITH ANY OF THE CUSTOMERS ABOUT THE SHORT-TERM TRADING OR MARGIN ACTIVITY UNTIL THE CUSTOMERS BEGAN TO COMPLAIN. IN SOME CASES THE FIRM RELIED UPON THE BROKER'S SELF-SERVING EXPLANATIONS FOR THE TRANSACTIONS WITHOUT CONDUCTING FURTHER INVESTIGATION. THE FIRM LACKED ADEQUATE SUPERVISORY SYSTEMS AND PROCEDURES TO SUPERVISE UIT TRANSACTIONS, INCLUDING SYSTEMS AND PROCEDURES TO MONITOR SHORT-TERM UIT TRANSACTIONS AND SWITCHES. WHILE THE FIRM HAD A SUPERVISORY SYSTEM FOR CERTAIN SHORT-TERM CEF LIQUIDATIONS, IT DID NOT HAVE A SIMILAR SYSTEM FOR UIT REDEMPTIONS. THE FIRM'S WRITTEN SUPERVISORY PROCEDURES FOR UITS WERE ALSO DEFICIENT, BY FAILING TO PROVIDE GUIDANCE TO REGISTERED REPRESENTATIVES OR PRINCIPALS ON SUITABILITY FACTORS TO CONSIDER IN PURCHASING, SELLING, OR SWITCHING UITS.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE, THE FIRM IS CENSURED, FINED $400,000, WHICH INCLUDES DISGORGEMENT OF COMMISSION RECEIVED OF $47,190.03 AND REQUIRED TO PAY $130,718, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS ON OR BEFORE THE DATE THIS AWC IS ACCEPTED BY FINRA. BY LETTER DATED AUGUST 14, 2012, THE FIRM PROVIDED DOCUMENTATION ESTABLISHING THAT IT PAID $130,718 IN RESTITUTION, PLUS $21,174.11 IN INTEREST, CONSISTENT WITH THE TERMS OF THE AWC.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE DISGORGEMENT RESTITUTION 3. Date Initiated (MM/DD/YYYY): 08/29/2012 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2009018601702 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Unit Investment Trust(s) Other Product Types: CLOSED END FUNDS 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): FINRA RULE 2010,NASD RULES 2110, 2310, 3010(A) AND (B): A FORMER BROKER OF THE FIRM RECOMMENDED HIS CUSTOMERS ENGAGE IN A PATTERN OF UNSUITABLE SHORT-TERM CLOSED-END FUNDS (CEF) AND UNIT INVESTMENT TRUSTS (UIT) TRADING. MOST OF THE BROKER'S SHORT-TERM TRANSACTIONS INVOLVED CLOSED-END FUNDS PURCHASED AT INITIAL PUBLIC OFFERING, WITH THE SALES CHARGES TO THE CUSTOMER BUILT INTO THE OFFERING PRICE. EVEN THOUGH CEFS AND UITS GENERALLY WERE INTENDED AS LONGER-TERM INVESTMENTS, THE BROKER RECOMMENDED THAT SOME OF THESE CUSTOMERS SELL THEIR ENTIRE POSITIONS AS SOON AS TWO MONTHS AFTER PURCHASE. MOST OF THE SHORT-TERM CEF TRANSACTIONS INVOLVED SWITCHING, WHEREBY THE BROKER GENERATED FUNDS TO PURCHASE ONE CEF OR UIT BY SELLING ANOTHER CEF, WITH THE CUSTOMER GAINING LITTLE OR NO ECONOMIC BENEFIT FROM THE EXCHANGE. THE FIRM, THROUGH THE BROKER, MADE THESE RECOMMENDATIONS TO PURCHASE AND SELL CEFS AND UITS ON A SHORT-TERM BASIS WITHOUT HAVING REASONABLE GROUNDS FOR BELIEVING THE RECOMMENDATIONS WERE SUITABLE IN VIEW OF THE FREQUENCY AND SIZE OF THE TRANSACTIONS AND EACH CUSTOMER'S INVESTMENT OBJECTIVES, FINANCIAL SITUATION, AND NEEDS. THE FIRM, THROUGH THE BROKER, MADE UNSUITABLE RECOMMENDATIONS, INCONSISTENT WITH THE CUSTOMERS' INVESTMENT OBJECTIVES, TO SEVEN CUSTOMERS THAT THEY OPEN MARGIN ACCOUNTS AND USE MARGIN TO BUY AND SELL SECURITIES. THESE CUSTOMERS PAID IN AGGREGATE OVER $70,000 IN MARGIN INTEREST. THE FIRM FAILED TO DETECT THAT THE BROKER WAS ENGAGING IN A PATTERN OF UNSUITABLE SHORT-TERM TRADING OF CEFS AND UITS AND SUITABLE TRANSACTIONS ON MARGIN. THE FIRM APPROVED EACH OF THE BROKER'S SHORT-TERM CEF AND UIT TRANSACTIONS, FAILING TO IDENTIFY THE TRANSACTIONS AS UNSUITABLE. IN ADDITION, THE FIRM FAILED TO RESPOND ADEQUATELY TO EXCEPTION REPORTS AND INFORMATION SUGGESTING THAT THE BROKER WAS ENGAGED IN A PATTERN OF UNSUITABLE USE OF MARGIN IN TRADE SECURITIES AND DID NOT SPEAK WITH ANY OF THE CUSTOMERS ABOUT THE SHORT-TERM TRADING OR MARGIN ACTIVITY UNTIL THE CUSTOMERS BEGAN TO COMPLAIN. IN SOME CASES THE FIRM RELIED UPON THE BROKER'S SELF-SERVING EXPLANATIONS FOR THE TRANSACTIONS WITHOUT CONDUCTING FURTHER INVESTIGATION. THE FIRM LACKED ADEQUATE SUPERVISORY SYSTEMS AND PROCEDURES TO SUPERVISE UIT TRANSACTIONS, INCLUDING SYSTEMS AND PROCEDURES TO MONITOR SHORT-TERM UIT TRANSACTIONS AND SWITCHES. WHILE THE FIRM HAD A SUPERVISORY SYSTEM FOR CERTAIN SHORT-TERM CEF LIQUIDATIONS, IT DID NOT HAVE A SIMILAR SYSTEM FOR UIT REDEMPTIONS. THE FIRM'S WRITTEN SUPERVISORY PROCEDURES FOR UITS WERE ALSO DEFICIENT, BY FAILING TO PROVIDE GUIDANCE TO REGISTERED REPRESENTATIVES OR PRINCIPALS ON SUITABILITY FACTORS TO CONSIDER IN PURCHASING, SELLING, OR SWITCHING UITS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 08/29/2012 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 400,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: $130,719, PLUS INTEREST, IN RESTITUTION Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE, THE FIRM IS CENSURED, FINED $400,000, WHICH INCLUDES DISGORGEMENT OF COMMISSION RECEIVED OF $47,190.03 AND REQUIRED TO PAY $130,718, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS ON OR BEFORE THE DATE THIS AWC IS ACCEPTED BY FINRA. BY LETTER DATED AUGUST 14, 2012, THE FIRM PROVIDED DOCUMENTATION ESTABLISHING THAT IT PAID $130,718 IN RESTITUTION, PLUS $21,174.11 IN INTEREST, CONSISTENT WITH THE TERMS OF THE AWC. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE, THE FIRM IS CENSURED, FINED $400,000, WHICH INCLUDES DISGORGEMENT OF COMMISSION RECEIVED OF $47,190.03 AND REQUIRED TO PAY $130,718, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS ON OR BEFORE THE DATE THIS AWC IS ACCEPTED BY FINRA. BY LETTER DATED AUGUST 14, 2012, THE FIRM PROVIDED DOCUMENTATION ESTABLISHING THAT IT PAID $130,718 IN RESTITUTION, PLUS $21,174.11 IN INTEREST, CONSISTENT WITH THE TERMS OF THE AWC.
regulatory · block 31PDF pages 217–219
- Regulator name — filed text
- NEW YORK STOCK EXCHANGE
- Monetary/Fine Amount — filed text
- $ 150,000.00
- How was matter resolved — filed text
- Decision
Action status / disposition — filed text
**9/13/12** UNLESS A REVIEW HAS BEEN REQUESTED BY ANY PERSON OR BODY AUTHORIZED BY NYSE RULE 476(G), THIS DECISION WILL BECOME FINAL 25 CALENDAR DAYS AFTER NOTICE OF THE HEARING BOARD'S DETERMINATION HAS BEEN SERVED UPON THE RESPONDENTS. **10/12/12** SINCE A REVIEW OF THE DECISION OF THE HEARING BOARD WAS NOT REQUESTED, THAT DECISION BECAME FINAL AS OF THE CLOSE OF BUSINESS ON OCTOBER 9, 2012.
Other filed details
Description of allegations — filed text
**8/29/12** STIPULATION OF FACTS AND CONSENT TO PENALTY FILED BY FINRA MARKET REGULATION, LEGAL SECTION AND PENDING. NEW YORK STOCK EXCHANGE LLC: FOR THE SOLE PURPOSE OF SETTLING THIS DISCIPLINARY PROCEEDING, WITHOUT ADJUDICATION OF ANY ISSUES OF LAW OR FACT, AND WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS, THE FIRM STIPULATED THAT: 1) DURING THE PERIOD APRIL 2007 THROUGH JUNE 2011, THE FIRM VIOLATED NYSE RULE 92(A) ON TWENTY- FOUR OCCASIONS AND NYSE RULE 401/2010 ON ELEVEN OCCASIONS; 2) DURING THE PERIOD OF FEBRUARY 2008 THROUGH JUNE 2012, THE FIRM ENTERED OR CANCELLED 456 MARKET-ON-CLOSE ("MOC") OR LIMIT-ON- CLOSE ("LOC") ORDERS IN VIOLATION OF NYSE RULE 123C; AND, 3) DURING THE PERIOD OF JULY 2011 THROUGH APRIL 2012, THE FIRM VIOLATED NYSE RULE 342 IN THAT IT FAILED TO EMPLOY REASONABLE SUPERVISORY CONTROLS AND SYSTEMS WITH REGARD TO THE CANCELLATION OF MOC/LOC ORDERS. STIPULATED SANCTION: CENSURE AND FINE IN THE AMOUNT OF $150,000. ORDERS. STIPULATED SANCTION: CENSURE AND FINE IN THE AMOUNT OF $150,000.
Sanction detail — filed text
**9/13/2012**DECISION NO. 12-NYSE-7 ISSUED BY NYSE HEARING BOARD NYSE: FROM APRIL 2007 THROUGH JUNE 2011, VIOLATED NYSE RULE 92(A) ON 24 OCCASIONS, BY ENTERING A PROPRIETARY ORDER TO BUY (SELL) AN NYSE-LISTED SECURITY WHILE KNOWINGLY IN POSSESSION OF A CUSTOMER ORDER TO BUY (SELL) SUCH SECURITY THAT COULD BE EXECUTED AT THE SAME PRICE; VIOLATED NYSE RULE 401(A) AND NYSE RULE 2010 BY FAILING TO CONDUCT ITS BUSINESS AFFAIRS IN ACCORDANCE WITH PRINCIPLES OF GOOD BUSINESS PRACTICE BY NOT ADEQUATELY DOCUMENTING ON 11 OCCASIONS A CUSTOMER'S TRADE ALONG PERMISSION, AS IS REQUIRED BY NYSE RULE 92(B); FROM FEBRUARY 2008 THROUGH JUNE 2012, VIOLATED NYSE RULE 123C, FOR 456 MARKET-ON-CLOSE OR LIMIT-ON-CLOSE ORDERS, BY FAILING TO COMPLY WITH THE REQUIREMENTS GOVERNING THE ENTRY AND CANCELLATION OF MARKET-ON-CLOSE AND LIMIT-ON-CLOSE ORDERS; AND, FROM JULY 2011 THROUGH APRIL 2012, VIOLATED NYSE RULE 342 BY FAILING TO REASONABLY SUPERVISE AND IMPLEMENT ADEQUATE CONTROLS, INCLUDING A SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULES AND POLICIES WITH RESPECT TO THE CANCELLATION OF CERTAIN MARKET-ON-CLOSE AND LIMIT-ON-CLOSE ORDERS AFTER THE PRESCRIBED CUTOFF TIMES. CONSENT TO A CENSURE AND $150,000 FINE.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
NEW YORK STOCK EXCHANGE
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE
3.
Date Initiated (MM/DD/YYYY):
08/29/2012
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
12-NYSE-7
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
N/A
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
**8/29/12** STIPULATION OF FACTS AND CONSENT TO PENALTY FILED BY FINRA MARKET REGULATION, LEGAL SECTION AND PENDING. NEW YORK
STOCK EXCHANGE LLC: FOR THE SOLE PURPOSE OF SETTLING THIS DISCIPLINARY PROCEEDING, WITHOUT ADJUDICATION OF ANY ISSUES OF LAW OR
FACT, AND WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS, THE FIRM STIPULATED THAT: 1) DURING THE PERIOD APRIL 2007
THROUGH JUNE 2011, THE FIRM VIOLATED NYSE RULE 92(A) ON TWENTY- FOUR OCCASIONS AND NYSE RULE 401/2010 ON ELEVEN OCCASIONS; 2)
DURING THE PERIOD OF FEBRUARY 2008 THROUGH JUNE 2012, THE FIRM ENTERED OR CANCELLED 456 MARKET-ON-CLOSE ("MOC") OR LIMIT-ON-
CLOSE ("LOC") ORDERS IN VIOLATION OF NYSE RULE 123C; AND, 3) DURING THE PERIOD OF JULY 2011 THROUGH APRIL 2012, THE FIRM VIOLATED
NYSE RULE 342 IN THAT IT FAILED TO EMPLOY REASONABLE SUPERVISORY CONTROLS AND SYSTEMS WITH REGARD TO THE CANCELLATION OF
MOC/LOC ORDERS. STIPULATED SANCTION: CENSURE AND FINE IN THE AMOUNT OF $150,000. ORDERS. STIPULATED SANCTION: CENSURE AND FINE IN
THE AMOUNT OF $150,000.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Decision
11. Resolution Date (MM/DD/YYYY):
10/09/2012
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 150,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
**9/13/2012**DECISION NO. 12-NYSE-7 ISSUED BY NYSE HEARING BOARD NYSE: FROM APRIL 2007 THROUGH JUNE 2011, VIOLATED NYSE RULE
92(A) ON 24 OCCASIONS, BY ENTERING A PROPRIETARY ORDER TO BUY (SELL) AN NYSE-LISTED SECURITY WHILE KNOWINGLY IN POSSESSION
OF A CUSTOMER ORDER TO BUY (SELL) SUCH SECURITY THAT COULD BE EXECUTED AT THE SAME PRICE; VIOLATED NYSE RULE 401(A) AND NYSE
RULE 2010 BY FAILING TO CONDUCT ITS BUSINESS AFFAIRS IN ACCORDANCE WITH PRINCIPLES OF GOOD BUSINESS PRACTICE BY NOT
ADEQUATELY DOCUMENTING ON 11 OCCASIONS A CUSTOMER'S TRADE ALONG PERMISSION, AS IS REQUIRED BY NYSE RULE 92(B); FROM
FEBRUARY 2008 THROUGH JUNE 2012, VIOLATED NYSE RULE 123C, FOR 456 MARKET-ON-CLOSE OR LIMIT-ON-CLOSE ORDERS, BY FAILING TO
COMPLY WITH THE REQUIREMENTS GOVERNING THE ENTRY AND CANCELLATION OF MARKET-ON-CLOSE AND LIMIT-ON-CLOSE ORDERS; AND,
FROM JULY 2011 THROUGH APRIL 2012, VIOLATED NYSE RULE 342 BY FAILING TO REASONABLY SUPERVISE AND IMPLEMENT ADEQUATE
CONTROLS, INCLUDING A SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULES
AND POLICIES WITH RESPECT TO THE CANCELLATION OF CERTAIN MARKET-ON-CLOSE AND LIMIT-ON-CLOSE ORDERS AFTER THE PRESCRIBED
CUTOFF TIMES. CONSENT TO A CENSURE AND $150,000 FINE.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
**9/13/12** UNLESS A REVIEW HAS BEEN REQUESTED BY ANY PERSON OR BODY AUTHORIZED BY NYSE RULE 476(G), THIS DECISION WILL BECOME
FINAL 25 CALENDAR DAYS AFTER NOTICE OF THE HEARING BOARD'S DETERMINATION HAS BEEN SERVED UPON THE RESPONDENTS. **10/12/12**
SINCE A REVIEW OF THE DECISION OF THE HEARING BOARD WAS NOT REQUESTED, THAT DECISION BECAME FINAL AS OF THE CLOSE OF BUSINESS ON
OCTOBER 9, 2012.regulatory · block 32PDF pages 219–222
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 500,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
ALLEGATIONS CONTINUED: THE FIRM'S COMPLAINT TRACKING SYSTEM WAS INEFFECTIVE AS IT FAILED TO IDENTIFY THE HIGH VOLUME OF CUSTOMER COMPLAINTS NOT BEING ACKNOWLEDGED OR REPORTED AS REQUIRED. THE FIRM'S PROCEDURES BROKE DOWN DUE TO HUMAN ERROR AND THE REPEATED FAILURE TO IDENTIFY THE FAILURES AND THE REQUIRED FILINGS. MOREOVER, NO ONE DEPARTMENT OF THE FIRM WAS MONITORING FOR COMPLIANCE WITH THE REPORTNG AND FINRA RULES. BRIEF SUMMARY OF DETAILS: THE FIRM SELF-REPORTED THE BACKLOG COMPLIANTS TO FINRA IN NOVEMBER 2009. FOLLOWING THE JANUARY 1, 2009 MERRILL LYNCH ACQUISITION AND SUBSEQUENT CONSOLIDATIONS OF BROKER-DEALERS IN 2009 AND 2010 AS DESCRIBED ABOVE, THE FIRM RESTRUCTURED AND ENHANCED ITS POLICIES AND PROCEDURES RELATIVE TO CUSTOMER COMPLIANT REPORTING. WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $500,000.
Other filed details
Description of allegations — filed text
ARTICLE V, SECTIONS 2(A) AND 2(C), 3(A), 3(B) OF THE FINRA BY-LAWS, FINRA RULE 2010, 3010, NASD RULES 2110, 3010, 3070(F), NYSE RULES 351(A), 351(D), 401A, FINRA INCORPORATED NYSE RULES 351(A), 351(D), 401A - MERRILL LYNCH DETECTED APPROXIMATELY 1,524 BACKLOG COMPLAINTS WHEN VARIOUS FIRM DEPARTMENTS AND ANOTHER MEMBER FIRM BEGAN TO BE CONSOLIDATED INTO A COMBINED COMPLIANCE DEPARTMENT. THE FIRM HAD FAILED TO COMPLY AND/OR TIMELY COMPLY WITH ITS OBLIGATION TO MAKE CERTAIN REQUIRED FILINGS AND ACKNOWLEDGMENTS RELATIVE TO THE BACKLOG COMPLIANTS. OF THE 1,524 BACKLOG COMPLAINTS, 77 CUSTOMER COMPLAINTS REQUIRED THE FIRM TO FILE A REPORT PURSUANT TO NYSE RULE 351(A)(2) OR (A)(8) BUT 35 OF THE 77 BACKLOG COMPLAINTS WERE NEVER MADE AND 14 OF THE 77 BACKLOG COMPLAINTS WERE MADE LATE. MOST OF THE LATE FILINGS WERE AT LEAST SIX MONTHS LATE AND AS MUCH AS ONE YEAR LATE. THE FIRM'S FAILURES CONTINUED AFTER THE PERIOD OF THE BACKLOG COMPLAINTS. OF 172 POST BACKLOG COMPLAINTS REQUIRING A NYSE RULE 351(A) FILING, 26 WERE NEVER MADE AND 10 FILINGS WERE NOT TIMELY MADE. MOST UNTIMELY COMPLAINTS WERE LESS THAN 90 DAYS LATE. OF THE 1,524 BACKLOG COMPLAINTS, 1,157 WERE REQUIRED TO BE INCLUDED IN THE FIRM'S QUARTERLY FILINGS OF STATISTICAL INFORMATION. OF THE FIRM'S VIOLATIVE FILINGS: 26 WERE NEVER INCLUDED IN THE FIRM'S QUARTERLY FILINGS AND 248 OF THE 1,157 WERE NOT TIMELY INCLUDED IN THE FIRM'S QUARTERLY FILINGS. MOST OF THE UNTIMELY FILINGS WERE 90 DAYS LATE OR LESS. OF THE 1,524 BACKLOG COMPLAINTS, 1,085 REQUIRED THE FIRM TO ACKNOWLEDGE THE CUSTOMER'S COMPLAINT WITHIN 15 DAYS OF RECEIPT; OF THE 1,085, REQUIRED ACKNOWLEDGMENTS FOR 163 WERE NEVER MADE AND REQUIRED ACKNOWLEDGMENTS FOR 117 WERE MADE LATE. MOST OF THE UNTIMELY ACKNOWLEDGMENTS WERE 90 DAYS LATE OR LESS. OF THE 1,524 BACKLOG COMPLAINTS, 310 CUSTOMER COMPLAINTS REQUIRED THE FIRM TO FILE A FORM U4. OF THE 310: 12 FORM U4 FILINGS WERE NEVER MADE AND 80 WERE MADE LATE. ABOUT ONE-HALF OF THE UNTIMELY FORMS U4 WERE FILED MORE THAN 90 DAYS LATE. OF THE 1,524 BACKLOG COMPLAINTS, THE FIRM WAS REQUIRED TO FILE A FORM U5 IN 162 INSTANCES; 45 OF THE 162 REQUIRED FILINGS WERE MADE LATE. NEARLY TWO- THIRDS OF THE UNTIMELY FORMS U5 WERE FILED MORE THAN 90 DAYS LATE. DURING THE POST BACKLOG PERIOD, 344 CUSTOMER COMPLAINTS REQUIRED THE FILING OF A FORM U5. OF THESE, THE FIRM FAILED TO MAKE, OR TIMELY MAKE, 35 FILINGS. ABOUT ONE-THIRD OF THE UNTIMELY FORMS U5 WERE MORE THAN 90 DAYS LATE. THE FIRM FAILED TO FILE COPIES OF ALL NON-NASD/FINRA ARBITRATIONS AND CIVIL AND CRIMINAL COMPLAINTS RECEIVED DURING A TWO-YEAR PERIOD AND A SUBSEQUENT FOUR-MONTH PERIOD. AS WITH THE BACKLOG COMPLIANT, THE FIRM DETECTED WHEN VARIOUS FIRM DEPARTMENTS AND ANOTHER FIRM BEGAN CONSOLIDATIONS. DURING THESE TWO PERIODS, APPROXIMATLEY 214 EVENTS REQUIRED AN NASD RULE 3070(F) FILING AND THE FIRM FAILED TO MAKE 100% OF THE REQUIRED FILINGS. BETWEEN THE FIRST AND SECOND PERIODS, FOR A SPAN OF APPROXIMATELY SIX MONTHS, THE FIRM EXPERIENCED REPORTING FAILURES. THE FIRM FAILED TO FILE REQUIRED DOCUMENTS FOR 80 ARTBITRATIONS AND/OR CIVIL LITIGATIONS; THE FIRM FAILED TO FILE THE REQUIRED DOCUMENTS FOR FOUR OF THE 80 LITIGATIONS AND MADE LATE FILINGS FOR AN ADDITIONAL 14 LITIGATIONS. DURING A MORE THAN THREE-YEAR PERIOD, THE FIRM FAILED TO FILE, OR TIMELY FILE, FORMS U4 AND U5 RELATED TO THE ARBITRATIONS AND CIVIL LITIGATIONS. THE FIRM FAILED TO MAKE AND/OR TIMELY MAKE FORM U4 FILINGS FOR 28% OF ARBITRATIONS AND CIVIL LITIGATIONS AND 60% OF LITIGATIONS REQUIRING REPORTING. PERSONNEL IN THE FIRM'S INTAKE GROUP, OFFICE OF GENERAL COUNSEL WERE NOT ADEQUATELY TRAINED AND/OR SUPERVISED IN PERFORMING ASSIGNED FUNCTIONS WITH RESPECT TO CUSTOMER COMPLAINTS. [CONTINUED IN COMMENT]
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $500,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 09/24/2012 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2009020356301 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): ARTICLE V, SECTIONS 2(A) AND 2(C), 3(A), 3(B) OF THE FINRA BY-LAWS, FINRA RULE 2010, 3010, NASD RULES 2110, 3010, 3070(F), NYSE RULES 351(A), 351(D), 401A, FINRA INCORPORATED NYSE RULES 351(A), 351(D), 401A - MERRILL LYNCH DETECTED APPROXIMATELY 1,524 BACKLOG COMPLAINTS WHEN VARIOUS FIRM DEPARTMENTS AND ANOTHER MEMBER FIRM BEGAN TO BE CONSOLIDATED INTO A COMBINED COMPLIANCE DEPARTMENT. THE FIRM HAD FAILED TO COMPLY AND/OR TIMELY COMPLY WITH ITS OBLIGATION TO MAKE CERTAIN REQUIRED FILINGS AND ACKNOWLEDGMENTS RELATIVE TO THE BACKLOG COMPLIANTS. OF THE 1,524 BACKLOG COMPLAINTS, 77 CUSTOMER COMPLAINTS REQUIRED THE FIRM TO FILE A REPORT PURSUANT TO NYSE RULE 351(A)(2) OR (A)(8) BUT 35 OF THE 77 BACKLOG COMPLAINTS WERE NEVER MADE AND 14 OF THE 77 BACKLOG COMPLAINTS WERE MADE LATE. MOST OF THE LATE FILINGS WERE AT LEAST SIX MONTHS LATE AND AS MUCH AS ONE YEAR LATE. THE FIRM'S FAILURES CONTINUED AFTER THE PERIOD OF THE BACKLOG COMPLAINTS. OF 172 POST BACKLOG COMPLAINTS REQUIRING A NYSE RULE 351(A) FILING, 26 WERE NEVER MADE AND 10 FILINGS WERE NOT TIMELY MADE. MOST UNTIMELY COMPLAINTS WERE LESS THAN 90 DAYS LATE. OF THE 1,524 BACKLOG COMPLAINTS, 1,157 WERE REQUIRED TO BE INCLUDED IN THE FIRM'S QUARTERLY FILINGS OF STATISTICAL INFORMATION. OF THE FIRM'S VIOLATIVE FILINGS: 26 WERE NEVER INCLUDED IN THE FIRM'S QUARTERLY FILINGS AND 248 OF THE 1,157 WERE NOT TIMELY INCLUDED IN THE FIRM'S QUARTERLY FILINGS. MOST OF THE UNTIMELY FILINGS WERE 90 DAYS LATE OR LESS. OF THE 1,524 BACKLOG COMPLAINTS, 1,085 REQUIRED THE FIRM TO ACKNOWLEDGE THE CUSTOMER'S COMPLAINT WITHIN 15 DAYS OF RECEIPT; OF THE 1,085, REQUIRED ACKNOWLEDGMENTS FOR 163 WERE NEVER MADE AND REQUIRED ACKNOWLEDGMENTS FOR 117 WERE MADE LATE. MOST OF THE UNTIMELY ACKNOWLEDGMENTS WERE 90 DAYS LATE OR LESS. OF THE 1,524 BACKLOG COMPLAINTS, 310 CUSTOMER COMPLAINTS REQUIRED THE FIRM TO FILE A FORM U4. OF THE 310: 12 FORM U4 FILINGS WERE NEVER MADE AND 80 WERE MADE LATE. ABOUT ONE-HALF OF THE UNTIMELY FORMS U4 WERE FILED MORE THAN 90 DAYS LATE. OF THE 1,524 BACKLOG COMPLAINTS, THE FIRM WAS REQUIRED TO FILE A FORM U5 IN 162 INSTANCES; 45 OF THE 162 REQUIRED FILINGS WERE MADE LATE. NEARLY TWO- THIRDS OF THE UNTIMELY FORMS U5 WERE FILED MORE THAN 90 DAYS LATE. DURING THE POST BACKLOG PERIOD, 344 CUSTOMER COMPLAINTS REQUIRED THE FILING OF A FORM U5. OF THESE, THE FIRM FAILED TO MAKE, OR TIMELY MAKE, 35 FILINGS. ABOUT ONE-THIRD OF THE UNTIMELY FORMS U5 WERE MORE THAN 90 DAYS LATE. THE FIRM FAILED TO FILE COPIES OF ALL NON-NASD/FINRA ARBITRATIONS AND CIVIL AND CRIMINAL COMPLAINTS RECEIVED DURING A TWO-YEAR PERIOD AND A SUBSEQUENT FOUR-MONTH PERIOD. AS WITH THE BACKLOG COMPLIANT, THE FIRM DETECTED WHEN VARIOUS FIRM DEPARTMENTS AND ANOTHER FIRM BEGAN CONSOLIDATIONS. DURING THESE TWO PERIODS, APPROXIMATLEY 214 EVENTS REQUIRED AN NASD RULE 3070(F) FILING AND THE FIRM FAILED TO MAKE 100% OF THE REQUIRED FILINGS. BETWEEN THE FIRST AND SECOND PERIODS, FOR A SPAN OF APPROXIMATELY SIX MONTHS, THE FIRM EXPERIENCED REPORTING FAILURES. THE FIRM FAILED TO FILE REQUIRED DOCUMENTS FOR 80 ARTBITRATIONS AND/OR CIVIL LITIGATIONS; THE FIRM FAILED TO FILE THE REQUIRED DOCUMENTS FOR FOUR OF THE 80 LITIGATIONS AND MADE LATE FILINGS FOR AN ADDITIONAL 14 LITIGATIONS. DURING A MORE THAN THREE-YEAR PERIOD, THE FIRM FAILED TO FILE, OR TIMELY FILE, FORMS U4 AND U5 RELATED TO THE ARBITRATIONS AND CIVIL LITIGATIONS. THE FIRM FAILED TO MAKE AND/OR TIMELY MAKE FORM U4 FILINGS FOR 28% OF ARBITRATIONS AND CIVIL LITIGATIONS AND 60% OF LITIGATIONS REQUIRING REPORTING. PERSONNEL IN THE FIRM'S INTAKE GROUP, OFFICE OF GENERAL COUNSEL WERE NOT ADEQUATELY TRAINED AND/OR SUPERVISED IN PERFORMING ASSIGNED FUNCTIONS WITH RESPECT TO CUSTOMER COMPLAINTS. [CONTINUED IN COMMENT] 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 09/24/2012 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 500,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $500,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). ALLEGATIONS CONTINUED: THE FIRM'S COMPLAINT TRACKING SYSTEM WAS INEFFECTIVE AS IT FAILED TO IDENTIFY THE HIGH VOLUME OF CUSTOMER COMPLAINTS NOT BEING ACKNOWLEDGED OR REPORTED AS REQUIRED. THE FIRM'S PROCEDURES BROKE DOWN DUE TO HUMAN ERROR AND THE REPEATED FAILURE TO IDENTIFY THE FAILURES AND THE REQUIRED FILINGS. MOREOVER, NO ONE DEPARTMENT OF THE FIRM WAS MONITORING FOR COMPLIANCE WITH THE REPORTNG AND FINRA RULES. BRIEF SUMMARY OF DETAILS: THE FIRM SELF-REPORTED THE BACKLOG COMPLIANTS TO FINRA IN NOVEMBER 2009. FOLLOWING THE JANUARY 1, 2009 MERRILL LYNCH ACQUISITION AND SUBSEQUENT CONSOLIDATIONS OF BROKER-DEALERS IN 2009 AND 2010 AS DESCRIBED ABOVE, THE FIRM RESTRUCTURED AND ENHANCED ITS POLICIES AND PROCEDURES RELATIVE TO CUSTOMER COMPLIANT REPORTING. WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $500,000.
regulatory · block 33PDF pages 222–223
- Regulator name — filed text
- ICE FUTURES U.S., INC.
- Monetary/Fine Amount — filed text
- $ 25,000.00
- How was matter resolved — filed text
- Settled
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE VIOLATION OF ANY EXCHANGE RULES, THE APPLICANT AGREED TO PAY A FINE OF $25,000 AND TO CEASE AND DESIST FROM FUTURE VIOLATIONS OF EXCHANGE RULE 6.13(A).
Other filed details
Description of allegations — filed text
THE BUSINESS CONDUCT COMMITTEE OF ICE FUTURES U.S., INC. DETERMINED THAT APPLICANT MAY HAVE VIOLATED EXCHANGE RULE 6.13(A) ON FEBRUARY 2 AND 3, 2011 BY MAINTAINING A SHORT POSITION IN COTTON NO. 2 FOR A CORPORATE AFFILIATE WHICH EXCEEDED THE NET 5,000 FUTURES EQUIVALENT ALL MONTHS POSITION LIMIT.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE VIOLATION OF ANY EXCHANGE RULES, THE APPLICANT AGREED TO PAY A FINE OF $25,000 AND TO CEASE AND DESIST FROM FUTURE VIOLATIONS OF EXCHANGE RULE 6.13(A).
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) ICE FUTURES U.S., INC. 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CEASE AND DESIST 3. Date Initiated (MM/DD/YYYY): 08/22/2012 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2011-070 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Futures - Commodity Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE BUSINESS CONDUCT COMMITTEE OF ICE FUTURES U.S., INC. DETERMINED THAT APPLICANT MAY HAVE VIOLATED EXCHANGE RULE 6.13(A) ON FEBRUARY 2 AND 3, 2011 BY MAINTAINING A SHORT POSITION IN COTTON NO. 2 FOR A CORPORATE AFFILIATE WHICH EXCEEDED THE NET 5,000 FUTURES EQUIVALENT ALL MONTHS POSITION LIMIT. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Settled 11. Resolution Date (MM/DD/YYYY): 08/22/2012 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 25,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE VIOLATION OF ANY EXCHANGE RULES, THE APPLICANT AGREED TO PAY A FINE OF $25,000 AND TO CEASE AND DESIST FROM FUTURE VIOLATIONS OF EXCHANGE RULE 6.13(A). 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE VIOLATION OF ANY EXCHANGE RULES, THE APPLICANT AGREED TO PAY A FINE OF $25,000 AND TO CEASE AND DESIST FROM FUTURE VIOLATIONS OF EXCHANGE RULE 6.13(A).
regulatory · block 34PDF pages 223–225
- Regulator name — filed text
- STATE OF NORTH CAROLINA DEPARTMENT OF THE SECRETARY OF STATE - SECURITIES DIVISION
- Monetary/Fine Amount — filed text
- $ 3,193,552.24
- How was matter resolved — filed text
- Settled
Action status / disposition — filed text
UNDER THE TERMS OF THE SETTLEMENT, MLPFS AGREED TO UNDERTAKINGS DESIGNED TO PROVIDE LIQUIDITY TO ELIGIBLE INVESTORS. MLPFS HAS OFFERED TO PURCHASE AT PAR FROM ELIGIBLE INVESTORS CERTAIN ARS THAT HAVE FAILED AT AUCTION. MLPFS HAS ALSO AGREED TO PAY THOSE ELIGIBLE INVESTORS THAT MLPFS CAN REASONABLY IDENTIFY WHO SOLD CERTAIN ARS BELOW PAR, THE DIFFERENCE BETWEEN PAR AND THE PRICE AT WHICH THEY SOLD SUCH SECURITIES. MLPFS HAS ALSO AGREED TO PARTICIPATE IN A SPECIAL ARBITRATION PROCESS FOR THE PURPOSE OF ARBITRATING ANY ELIGIBLE INVESTOR'S CONSEQUENTIAL DAMAGES CLAIM ARISING FROM THEIR INABILITY TO SELL CERTAIN ARS. FURTHERMORE, MLPFS AGREED TO REFUND REFINANCING FEES TO CERTAIN MUNICIPAL ISSUERS THAT ISSUED AND REFINANCED CERTAIN ARS THROUGH MLPFS. MLPFS WILL ALSO ENDEAVOR TO WORK WITH ISSUERS AND OTHER INTERESTED PARTIES TO PROVIDE LIQUIDITY SOLUTIONS FOR INSTITUTIONAL INVESTORS THAT PURCHASED CERTAIN ARS FROM MLPFS BUT ARE NOT CONSIDERED "ELIGIBLE INVESTORS" AND ARE NOT ENTITLED TO PARTICIPATE IN THE ARS BUYBACK UNDER THE TERMS OF THE SETTLEMENT.
Other filed details
Description of allegations — filed text
THE NORTH CAROLINA DEPARTMENT OF THE SECRETARY OF STATE, SECURITIES DIVISION (ADMINISTRATOR) ALLEGED THAT MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED'S (MLPFS) CONDUCT IN CONNECTION WITH THE MARKETING AND SALE OF AUCTION RATE SECURITIES (ARS) TO RETAIL AND OTHER CUSTOMERS WAS GROUNDS FOR ENFORCEMENT ACTION BY THE ADMINISTRATOR UNDER N.C.G.S. §§ 78A39(A)(2)(G) AND 78A 39(A1)(2)(A).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, MLPFS ENTERED INTO A SETTLEMENT WITH THE ADMINISTRATOR, IN WHICH IT AGREED TO CEASE AND DESIST FROM VIOLATING THE NORTH CAROLINA SECURITIES ACT (ACT), TO COMPLY WITH THE ACT, AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROM ELIGIBLE INVESTORS. MLPFS AGREED TO PAY THE ADMINISTRATOR A TOTAL PAYMENT OF $3,193,552.24, AS PART OF A $125,000,000.00 PENALTY THAT WILL BE ALLOCATED AT THE COMMONWEALTH OF MASSACHUSETTS AND OTHER STATES' DISCRETION TO RESOLVE ALL UNDERLYING CONDUCT RELATING TO THE SALE OF ARS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) STATE OF NORTH CAROLINA DEPARTMENT OF THE SECRETARY OF STATE - SECURITIES DIVISION 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CEASE AND DESIST; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 11/28/2012 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: FILE NO. 09SEC052 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: AUCTION RATE SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE NORTH CAROLINA DEPARTMENT OF THE SECRETARY OF STATE, SECURITIES DIVISION (ADMINISTRATOR) ALLEGED THAT MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED'S (MLPFS) CONDUCT IN CONNECTION WITH THE MARKETING AND SALE OF AUCTION RATE SECURITIES (ARS) TO RETAIL AND OTHER CUSTOMERS WAS GROUNDS FOR ENFORCEMENT ACTION BY THE ADMINISTRATOR UNDER N.C.G.S. §§ 78A39(A)(2)(G) AND 78A 39(A1)(2)(A). 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Settled 11. Resolution Date (MM/DD/YYYY): 11/28/2012 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 3,193,552.24 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKINGS Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, MLPFS ENTERED INTO A SETTLEMENT WITH THE ADMINISTRATOR, IN WHICH IT AGREED TO CEASE AND DESIST FROM VIOLATING THE NORTH CAROLINA SECURITIES ACT (ACT), TO COMPLY WITH THE ACT, AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROM ELIGIBLE INVESTORS. MLPFS AGREED TO PAY THE ADMINISTRATOR A TOTAL PAYMENT OF $3,193,552.24, AS PART OF A $125,000,000.00 PENALTY THAT WILL BE ALLOCATED AT THE COMMONWEALTH OF MASSACHUSETTS AND OTHER STATES' DISCRETION TO RESOLVE ALL UNDERLYING CONDUCT RELATING TO THE SALE OF ARS. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). UNDER THE TERMS OF THE SETTLEMENT, MLPFS AGREED TO UNDERTAKINGS DESIGNED TO PROVIDE LIQUIDITY TO ELIGIBLE INVESTORS. MLPFS HAS OFFERED TO PURCHASE AT PAR FROM ELIGIBLE INVESTORS CERTAIN ARS THAT HAVE FAILED AT AUCTION. MLPFS HAS ALSO AGREED TO PAY THOSE ELIGIBLE INVESTORS THAT MLPFS CAN REASONABLY IDENTIFY WHO SOLD CERTAIN ARS BELOW PAR, THE DIFFERENCE BETWEEN PAR AND THE PRICE AT WHICH THEY SOLD SUCH SECURITIES. MLPFS HAS ALSO AGREED TO PARTICIPATE IN A SPECIAL ARBITRATION PROCESS FOR THE PURPOSE OF ARBITRATING ANY ELIGIBLE INVESTOR'S CONSEQUENTIAL DAMAGES CLAIM ARISING FROM THEIR INABILITY TO SELL CERTAIN ARS. FURTHERMORE, MLPFS AGREED TO REFUND REFINANCING FEES TO CERTAIN MUNICIPAL ISSUERS THAT ISSUED AND REFINANCED CERTAIN ARS THROUGH MLPFS. MLPFS WILL ALSO ENDEAVOR TO WORK WITH ISSUERS AND OTHER INTERESTED PARTIES TO PROVIDE LIQUIDITY SOLUTIONS FOR INSTITUTIONAL INVESTORS THAT PURCHASED CERTAIN ARS FROM MLPFS BUT ARE NOT CONSIDERED "ELIGIBLE INVESTORS" AND ARE NOT ENTITLED TO PARTICIPATE IN THE ARS BUYBACK UNDER THE TERMS OF THE SETTLEMENT.
regulatory · block 35PDF pages 225–227
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 265,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $265,000.
Other filed details
Description of allegations — filed text
FINRA RULES 2010, 6182, 7230A(D)(6), NASD RULES 2110, 3010, 6130(D)(6). - MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED EXECUTED CROSS TRANSACTIONS THAT WERE ALSO SHORT SALES BUT REPORTED THESE TRADES TO THE FNTRF WITHOUT A SHORT SALE MODIFIER. THE FIRM EXECUTED OVER EIGHT MILLION CROSS TRANSACTIONS THAT WERE ALSO SHORT SALES, BUT REPORTED THESE TRADES TO THE FINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF)WITHOUT A SHORT SALE MODIFIER. THE FIRM FAILED TO HAVE ADEQUATE WRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH FINRA RULES 6182, 7230A(D)(6) AND NASD RULE 6130(D)(6).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $265,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 12/12/2012 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2008013213201 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: UNSPECIFIED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): FINRA RULES 2010, 6182, 7230A(D)(6), NASD RULES 2110, 3010, 6130(D)(6). - MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED EXECUTED CROSS TRANSACTIONS THAT WERE ALSO SHORT SALES BUT REPORTED THESE TRADES TO THE FNTRF WITHOUT A SHORT SALE MODIFIER. THE FIRM EXECUTED OVER EIGHT MILLION CROSS TRANSACTIONS THAT WERE ALSO SHORT SALES, BUT REPORTED THESE TRADES TO THE FINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF)WITHOUT A SHORT SALE MODIFIER. THE FIRM FAILED TO HAVE ADEQUATE WRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH FINRA RULES 6182, 7230A(D)(6) AND NASD RULE 6130(D)(6). 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 12/12/2012 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 265,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $265,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $265,000.
regulatory · block 36PDF pages 227–229
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 787,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $787,000 FOR MSRB RULE VIOLATIONS AND ORDERED TO PAY $287,200.04 IN RESTITUTION AND TO SUBMIT SATISFACTORY PROOF OF PAYMENT OF RESTITUTION OR OF REASONABLE DOCUMENTED EFFORTS TO EFFECT RESTITUTION TO THE ISSUERS LOCATED IN CALIFORNIA TO WHICH THE FIRM HAS NOT YET PROVIDED RESTITUTION.
Other filed details
Description of allegations — filed text
MSRB RULES G-17, G-27 - MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MLPF&S") AND BANC OF AMERICA SECURITIES LLC, WHICH WAS CONSOLIDATED INTO MLPF&S, WERE MEMBERS OF A MUNICIPAL SECURITIES ASSOCIATION WHICH REQUESTED THAT ITS MEMBERS MAKE UNDERWRITING ASSESSMENT PAYMENTS OF $0.01 PER BOND, AND LATER $0.02 PER BOND, WHEN THEY PARTICIPATED IN BOND ISSUANCES IN CALIFORNIA OF MORE THAN $2 MILLION IN ISSUE SIZE WITH MORE THAN TWO YEARS TO MATURITY. THE MUNICIPAL SECURITIES ASSOCIATION'S MISSION WAS TO KEEP ITS MEMBERS INFORMED OF LEGISLATIVE AND REGULATORY DEVELOPMENTS AFFECTING THE MUNICIPAL SECURITIES INDUSTRY AND TO PROVIDE A FORUM THROUGH WHICH THE MUNICIPAL SECURITIES INDUSTRY COULD REVIEW AND RESPOND TO THESE DEVELOPMENTS. THE ASSOCIATION BILLED ITS MEMBERS ON THE PER-BOND BASIS, REGARDLESS OF WHETHER THERE WAS ANY DIRECT RELATIONSHIP BETWEEN THAT BOND ISSUANCE AND THE ASSOCIATION'S ACTIVITIES, AND REGARDLESS OF WHETHER THE ASSOCIATION PROVIDED ANY SERVICES REQUIRED FOR THE UNDERWRITING. THE FIRMS PAID THE ASSOCIATION A TOTAL OF $387,455.62 FOR PARTICIPATING IN THE UNDERWRITING OF APPROXIMATELY 252 APPLICABLE TRANSACTIONS. THE FIRM OBTAINED REIMBURSEMENT FOR THE VOLUNTARY PAYMENTS FROM THE PROCEEDS OF MUNICIPAL AND STATE BOND OFFERINGS WHICH WAS UNFAIR. THE ASSESSMENTS DID NOT HAVE A DIRECT RELATIONSHIP TO ANY ACTIVITIES CONDUCTED WITH RESPECT TO EACH BOND OFFERING. THE FIRM WAS NOT REQUIRED BY ANY STATUTE OR REGULATIONS TO BE A MEMBER OF THE ASSOCIATION YET TREATED ITS ASSESSMENTS AS AN EXPENSE OF EACH TRANSACTION AND REQUESTED AND RECEIVED REIMBURSEMENT OF THE PAYMENTS FROM THE PROCEEDS OF EACH BOND OFFERING. THE FIRM LISTED THE UNDERWRITING ASSESSMENTS AS EXPENSES OF THE UNDERWRITING BUT ITS REQUESTS FOR REIMBURSEMENT WERE NOT FAIR BECAUSE THEY WERE NOT ACCOMPANIED BY ADEQUATE DISCLOSURE TO ISSUERS. THE FIRM'S PRACTICES RESULTED IN THE EXPENDITURE OF THE PROCEEDS OF MUNICIPAL AND STATE BOND OFFERINGS TO AN ORGANIZATION ENGAGED IN POLITICAL ACTIVITIES. IN RESPONSE TO A REQUEST FROM THE TREASURER OF THE STATE OF CALIFORNIA, THE FIRMS HAVE RETURNED $100,255.58 TO MULTIPLE ISSUERS AS A REFUND FOR THE UNDERWRITING ASSESSMENTS REIMBURSED FROM OFFERING PROCEEDS. THE FIRMS FAILED TO ADOPT, MAINTAIN AND ENFORCE WRITTEN SUPERVISORY PROCEDURES (WSPS) REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH MSRB RULE G-17 AS IT RELATES TO THE CONDUCT DESCRIBED HERE. THE FIRMS FAILED TO ESTABLISH REASONABLE PROCEDURES FOR REVIEWING AND DISCLOSING EXPENSES FOR MUNICIPAL SECURITIES ASSOCIATIONS FOR WHICH IT REQUESTED REIMBURSEMENT FROM THE PROCEEDS OF MUNICIPAL AND STATE OFFERINGS, AND FOR ENSURING THAT THOSE REQUESTS WERE FAIR AND ADQUATE. THE FIRMS ALSO FAILED TO ADOPT, MAINTAIN AND ENFORCE ADEQUATE SYSTEMS AND WSPS REASONABLY DESIGNED TO MONITOR HOW THE MUNICIPAL SECURITIES ASSOCIATIONS TO WHICH IT BELONGED USED THE FUNDS THAT THE FIRM PROVIDED. ADEQUATE POLICIES AND PROCEDURES WERE ESPECIALLY NECESSARY IN LIGHT OF ONE ASSOCIATION'S ENGAGEMENT IN POLITICAL ACTIVITIES.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $787,000 FOR MSRB RULE VIOLATIONS AND ORDERED TO PAY $287,200.04 IN RESTITUTION AND TO SUBMIT SATISFACTORY PROOF OF PAYMENT OF RESTITUTION OR OF REASONABLE DOCUMENTED EFFORTS TO EFFECT RESTITUTION TO THE ISSUERS LOCATED IN CALIFORNIA TO WHICH THE FIRM HAS NOT YET PROVIDED RESTITUTION. PROOF SHALL BE FORWARDED TO FINRA NO LATER THAN 120 DAYS AFTER ACCEPTANCE OF THE OFFER. IF THE FIRM CANNOT LOCATE ANY SUCH ISSUER WITHIN 120 DAYS, OR SUCH ADDITIONAL PERIOD AGREED TO BY FINRA, THE FIRM SHALL FORWARD ANY UNDISTRIBUTED RESTITUTION TO THE APPROPRIATE ESCHEAT, UNCLAIMED PROPERTY OR ABANDONED PROPERTY FUND FOR THE STATE OF CALIFORNIA. THE FIRM SHALL PROVIDE SATISFACTORY PROOF OF SUCH ACTION TO FINRA WITHIN 14 DAYS OF FORWARDING THE UNDISTRIBUTED RESTITUTION. WITHIN 180 DAYS OF THE ISSUANCE OF THIS AWC, AN OFFICER OR EQUIVALENT OF THE FIRM WILL CERTIFY IN WRITING TO FINRA THAT IT HAS COMPLETED A REVIEW OF ITS WSPS AND SYSTEMS CONCERNING COMPLIANCE WITH MSRB RULE G-17; AND IMPLEMENTED NECESSARY REVISIONS TO ENSURE THAT THEY ARE IN COMPLIANCE WITH MSRB RULE G-27.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
FINRA
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE RESTITUTION
3.
Date Initiated (MM/DD/YYYY):
12/27/2012
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
2010022049801
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Debt - Municipal
Other Product Types:
N/A
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
MSRB RULES G-17, G-27 - MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MLPF&S") AND BANC OF AMERICA SECURITIES LLC, WHICH WAS
CONSOLIDATED INTO MLPF&S, WERE MEMBERS OF A MUNICIPAL SECURITIES ASSOCIATION WHICH REQUESTED THAT ITS MEMBERS MAKE
UNDERWRITING ASSESSMENT PAYMENTS OF $0.01 PER BOND, AND LATER $0.02 PER BOND, WHEN THEY PARTICIPATED IN BOND ISSUANCES IN
CALIFORNIA OF MORE THAN $2 MILLION IN ISSUE SIZE WITH MORE THAN TWO YEARS TO MATURITY. THE MUNICIPAL SECURITIES ASSOCIATION'S
MISSION WAS TO KEEP ITS MEMBERS INFORMED OF LEGISLATIVE AND REGULATORY DEVELOPMENTS AFFECTING THE MUNICIPAL SECURITIES INDUSTRY
AND TO PROVIDE A FORUM THROUGH WHICH THE MUNICIPAL SECURITIES INDUSTRY COULD REVIEW AND RESPOND TO THESE DEVELOPMENTS. THE
ASSOCIATION BILLED ITS MEMBERS ON THE PER-BOND BASIS, REGARDLESS OF WHETHER THERE WAS ANY DIRECT RELATIONSHIP BETWEEN THAT
BOND ISSUANCE AND THE ASSOCIATION'S ACTIVITIES, AND REGARDLESS OF WHETHER THE ASSOCIATION PROVIDED ANY SERVICES REQUIRED FOR
THE UNDERWRITING. THE FIRMS PAID THE ASSOCIATION A TOTAL OF $387,455.62 FOR PARTICIPATING IN THE UNDERWRITING OF APPROXIMATELY 252
APPLICABLE TRANSACTIONS. THE FIRM OBTAINED REIMBURSEMENT FOR THE VOLUNTARY PAYMENTS FROM THE PROCEEDS OF MUNICIPAL AND STATE
BOND OFFERINGS WHICH WAS UNFAIR. THE ASSESSMENTS DID NOT HAVE A DIRECT RELATIONSHIP TO ANY ACTIVITIES CONDUCTED WITH RESPECT TO
EACH BOND OFFERING. THE FIRM WAS NOT REQUIRED BY ANY STATUTE OR REGULATIONS TO BE A MEMBER OF THE ASSOCIATION YET TREATED ITS
ASSESSMENTS AS AN EXPENSE OF EACH TRANSACTION AND REQUESTED AND RECEIVED REIMBURSEMENT OF THE PAYMENTS FROM THE PROCEEDS OF
EACH BOND OFFERING. THE FIRM LISTED THE UNDERWRITING ASSESSMENTS AS EXPENSES OF THE UNDERWRITING BUT ITS REQUESTS FOR
REIMBURSEMENT WERE NOT FAIR BECAUSE THEY WERE NOT ACCOMPANIED BY ADEQUATE DISCLOSURE TO ISSUERS. THE FIRM'S PRACTICES RESULTED
IN THE EXPENDITURE OF THE PROCEEDS OF MUNICIPAL AND STATE BOND OFFERINGS TO AN ORGANIZATION ENGAGED IN POLITICAL ACTIVITIES. IN
RESPONSE TO A REQUEST FROM THE TREASURER OF THE STATE OF CALIFORNIA, THE FIRMS HAVE RETURNED $100,255.58 TO MULTIPLE ISSUERS AS A
REFUND FOR THE UNDERWRITING ASSESSMENTS REIMBURSED FROM OFFERING PROCEEDS. THE FIRMS FAILED TO ADOPT, MAINTAIN AND ENFORCE
WRITTEN SUPERVISORY PROCEDURES (WSPS) REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH MSRB RULE G-17 AS IT RELATES TO THE
CONDUCT DESCRIBED HERE. THE FIRMS FAILED TO ESTABLISH REASONABLE PROCEDURES FOR REVIEWING AND DISCLOSING EXPENSES FOR
MUNICIPAL SECURITIES ASSOCIATIONS FOR WHICH IT REQUESTED REIMBURSEMENT FROM THE PROCEEDS OF MUNICIPAL AND STATE OFFERINGS, AND
FOR ENSURING THAT THOSE REQUESTS WERE FAIR AND ADQUATE. THE FIRMS ALSO FAILED TO ADOPT, MAINTAIN AND ENFORCE ADEQUATE SYSTEMS
AND WSPS REASONABLY DESIGNED TO MONITOR HOW THE MUNICIPAL SECURITIES ASSOCIATIONS TO WHICH IT BELONGED USED THE FUNDS THAT
THE FIRM PROVIDED. ADEQUATE POLICIES AND PROCEDURES WERE ESPECIALLY NECESSARY IN LIGHT OF ONE ASSOCIATION'S ENGAGEMENT IN
POLITICAL ACTIVITIES.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
12/27/2012
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 787,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
UNDERTAKING
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;
THEREFORE, THE FIRM IS CENSURED AND FINED $787,000 FOR MSRB RULE VIOLATIONS AND ORDERED TO PAY $287,200.04 IN RESTITUTION AND
TO SUBMIT SATISFACTORY PROOF OF PAYMENT OF RESTITUTION OR OF REASONABLE DOCUMENTED EFFORTS TO EFFECT RESTITUTION TO THE
ISSUERS LOCATED IN CALIFORNIA TO WHICH THE FIRM HAS NOT YET PROVIDED RESTITUTION. PROOF SHALL BE FORWARDED TO FINRA NO
LATER THAN 120 DAYS AFTER ACCEPTANCE OF THE OFFER. IF THE FIRM CANNOT LOCATE ANY SUCH ISSUER WITHIN 120 DAYS, OR SUCH
ADDITIONAL PERIOD AGREED TO BY FINRA, THE FIRM SHALL FORWARD ANY UNDISTRIBUTED RESTITUTION TO THE APPROPRIATE ESCHEAT,
UNCLAIMED PROPERTY OR ABANDONED PROPERTY FUND FOR THE STATE OF CALIFORNIA. THE FIRM SHALL PROVIDE SATISFACTORY PROOF OF
SUCH ACTION TO FINRA WITHIN 14 DAYS OF FORWARDING THE UNDISTRIBUTED RESTITUTION. WITHIN 180 DAYS OF THE ISSUANCE OF THIS
AWC, AN OFFICER OR EQUIVALENT OF THE FIRM WILL CERTIFY IN WRITING TO FINRA THAT IT HAS COMPLETED A REVIEW OF ITS WSPS AND
SYSTEMS CONCERNING COMPLIANCE WITH MSRB RULE G-17; AND IMPLEMENTED NECESSARY REVISIONS TO ENSURE THAT THEY ARE IN
COMPLIANCE WITH MSRB RULE G-27.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE,
THE FIRM IS CENSURED AND FINED $787,000 FOR MSRB RULE VIOLATIONS AND ORDERED TO PAY $287,200.04 IN RESTITUTION AND TO SUBMIT
SATISFACTORY PROOF OF PAYMENT OF RESTITUTION OR OF REASONABLE DOCUMENTED EFFORTS TO EFFECT RESTITUTION TO THE ISSUERS LOCATED
IN CALIFORNIA TO WHICH THE FIRM HAS NOT YET PROVIDED RESTITUTION.regulatory · block 37PDF pages 229–231
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 150,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $150,000.
Other filed details
Description of allegations — filed text
FINRA RULES 2010, 6380A, 6622(B), 6730, 7230A, 7230A(B), 7450, NASD RULES 6130, 6230, 6620(B), 6955, 6955(A) - MERRILL LYNCH TRANSMITTED REPORTABLE ORDER EVENTS (ROES) TO THE ORDER AUDIT TRAIL SYSTEM (OATS) THAT WERE REJECTED BY OATS FOR CONTENT OR SYNTAX ERRORS AND WERE REPAIRABLE BUT THE FIRM FAILED TO REPAIR SOME OF THE REJECTED ROES SO THAT IT FAILED TO TRANSMIT THEM DURING THE REVIEW PERIOD. THE FIRM TRANSMITTED EXECUTION OR COMBINED ORDER/EXECUTION REPORTS TO OATS THAT CONTAINED INACCURATE REPORTING EXCEPTION CODES; FAILED TO REPORT EXECUTION OR COMBINED ORDER/EXECUTION REPORTS; AND TRANSMITTED EXECUTION OR COMBINED ORDER/EXECUTION REPORTS TO OATS IT WAS NOT REQUIRED TO REPORT. BECAUSE OF THE INACCURATE, MISSING OR IMPROPERLY FORMATTED DATA IN A REPORTING EXCEPTION CODE, OATS WAS UNABLE TO LINK THE EXECUTION REPORTS TO THE RELATED TRADE REPORTS IN A FINRA TRADE REPORTING SYSTEM. THE FIRM TRANSMITTED REPORTS TO OATS THAT DID NOT INCLUDE THE SPECIAL HANDLING CODE NH FOR NOT HELD LIMIT ORDERS. THE FIRM FAILED TO TRANSMIT ALL OF ITS ROES TO OATS ON 380 BUSINESS DAYS FOR A SECONDARY MARKET PARTICIPANT IDENTIFIER (MPID). THE FIRM FAILED, WITHIN 90 SECONDS AFTER EXECUTION, TO TRANSMIT NUMEROUS LAST SALE REPORTS OF TRANSACTIONS IN DESIGNATED SECURITIES TO THE FINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF). THIS CONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF FINRA RULE 6380A AND A PATTERN OR PRACTICE OF LATE REPORTING WITHOUT EXCEPTIONAL CIRCUMSTANCES IN VIOLATION OF FINRA RULE 2010. THE FIRM FAILED TO ACCEPT OR DECLINE IN THE FNTRF TRANSACTIONS IN REPORTABLE SECURITIES WITHIN 20 MINUTES AFTER EXECUTION, APPROXIMATELY 49% OF ALL TRANSACTIONS THE FIRM HAD AN OBLIGATION TO ACCEPT OR DECLINE DURING THE TIME PERIOD. THIS CONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF FINRA RULE 7230A(B) AND A PATTERN OR PRACTICE OF LATE REPORTING WITHOUT EXCEPTIONAL CIRCUMSTANCES IN VIOLATION OF FINRA RULE 2010. THE FIRM FAILED TO TIMELY REPORT TO THE FNTRF BY 8:00 P.M. EASTERN TIME TRANSACTIONS THAT REQUIRED A .RX MODIFIER AND ALSO FAILED TO REPORT TRANSACTIONS WITH A .RX MODIFIER IT WAS REQUIRED TO REPORT. THE FIRM INCORRECTLY REPORTED ITSELF AS A MARKET MAKER IN LAST SALE REPORTS OF TRANSACTIONS TO THE OTC REPORTING FACILITY. THE FIRM FAILED TO REPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE (TRACE) TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES IT WAS REQUIRED TO REPORT AND ALSO REPORTED TRANSACTIONS IT WAS NOT REQUIRED TO REPORT.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $150,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 03/04/2013 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2008014636301 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Equity - OTC Other Product Types: DESIGNATED SECURITIES, REPORTABLE SECURITIES, TRACE-ELIGIBLE SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): FINRA RULES 2010, 6380A, 6622(B), 6730, 7230A, 7230A(B), 7450, NASD RULES 6130, 6230, 6620(B), 6955, 6955(A) - MERRILL LYNCH TRANSMITTED REPORTABLE ORDER EVENTS (ROES) TO THE ORDER AUDIT TRAIL SYSTEM (OATS) THAT WERE REJECTED BY OATS FOR CONTENT OR SYNTAX ERRORS AND WERE REPAIRABLE BUT THE FIRM FAILED TO REPAIR SOME OF THE REJECTED ROES SO THAT IT FAILED TO TRANSMIT THEM DURING THE REVIEW PERIOD. THE FIRM TRANSMITTED EXECUTION OR COMBINED ORDER/EXECUTION REPORTS TO OATS THAT CONTAINED INACCURATE REPORTING EXCEPTION CODES; FAILED TO REPORT EXECUTION OR COMBINED ORDER/EXECUTION REPORTS; AND TRANSMITTED EXECUTION OR COMBINED ORDER/EXECUTION REPORTS TO OATS IT WAS NOT REQUIRED TO REPORT. BECAUSE OF THE INACCURATE, MISSING OR IMPROPERLY FORMATTED DATA IN A REPORTING EXCEPTION CODE, OATS WAS UNABLE TO LINK THE EXECUTION REPORTS TO THE RELATED TRADE REPORTS IN A FINRA TRADE REPORTING SYSTEM. THE FIRM TRANSMITTED REPORTS TO OATS THAT DID NOT INCLUDE THE SPECIAL HANDLING CODE NH FOR NOT HELD LIMIT ORDERS. THE FIRM FAILED TO TRANSMIT ALL OF ITS ROES TO OATS ON 380 BUSINESS DAYS FOR A SECONDARY MARKET PARTICIPANT IDENTIFIER (MPID). THE FIRM FAILED, WITHIN 90 SECONDS AFTER EXECUTION, TO TRANSMIT NUMEROUS LAST SALE REPORTS OF TRANSACTIONS IN DESIGNATED SECURITIES TO THE FINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF). THIS CONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF FINRA RULE 6380A AND A PATTERN OR PRACTICE OF LATE REPORTING WITHOUT EXCEPTIONAL CIRCUMSTANCES IN VIOLATION OF FINRA RULE 2010. THE FIRM FAILED TO ACCEPT OR DECLINE IN THE FNTRF TRANSACTIONS IN REPORTABLE SECURITIES WITHIN 20 MINUTES AFTER EXECUTION, APPROXIMATELY 49% OF ALL TRANSACTIONS THE FIRM HAD AN OBLIGATION TO ACCEPT OR DECLINE DURING THE TIME PERIOD. THIS CONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF FINRA RULE 7230A(B) AND A PATTERN OR PRACTICE OF LATE REPORTING WITHOUT EXCEPTIONAL CIRCUMSTANCES IN VIOLATION OF FINRA RULE 2010. THE FIRM FAILED TO TIMELY REPORT TO THE FNTRF BY 8:00 P.M. EASTERN TIME TRANSACTIONS THAT REQUIRED A .RX MODIFIER AND ALSO FAILED TO REPORT TRANSACTIONS WITH A .RX MODIFIER IT WAS REQUIRED TO REPORT. THE FIRM INCORRECTLY REPORTED ITSELF AS A MARKET MAKER IN LAST SALE REPORTS OF TRANSACTIONS TO THE OTC REPORTING FACILITY. THE FIRM FAILED TO REPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE (TRACE) TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES IT WAS REQUIRED TO REPORT AND ALSO REPORTED TRANSACTIONS IT WAS NOT REQUIRED TO REPORT. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 03/04/2013 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 150,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $150,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $150,000.
regulatory · block 38PDF pages 231–233
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 65,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE IT IS CENSURED AND FINED $65,000
Other filed details
Description of allegations — filed text
SECTION 10 OF THE SECURITIES EXCHANGE ACT OF 1934, RULE 10B-10(A)(2) THEREUNDER, FINRA RULE 2010 AND NASD RULE 2230: FOLLOWING A SYSTEM MIGRATION, THE FIRM'S SYSTEMS WERE NOT PROPERLY CONFIGURED TO PASS EXECUTION CAPACITY DOWNSTREAM TO CUSTOMER CONFIRMATIONS, IN CERTAIN LIMITED SITUATIONS. WHILE EXTENSIVE PRE-IMPLEMENTATION TESTING WAS COMPLETED, DUE TO THE LIMITED NATURE OF THE CONFIGURATION ISSUE, THE PROBLEM WAS NOT DISCOVERED AND REPORTED UNTIL POST-MIGRATION. THE CONFIGURATION PROBLEM RESULTED IN 22 INSTITUTIONAL CUSTOMERS RECEIVING CONFIRMATIONS RELATED TO 13,231 NON-DOLLAR, AGENCY BLOCK EQUITY TRADES WHICH DID NOT SPECIFY THE CAPACITY. THE TOTAL CONFIRMATIONS AFFECTED WERE 39,256.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE IT IS CENSURED AND FINED $65,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 04/08/2013 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2011026254401 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: EQUITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): SECTION 10 OF THE SECURITIES EXCHANGE ACT OF 1934, RULE 10B-10(A)(2) THEREUNDER, FINRA RULE 2010 AND NASD RULE 2230: FOLLOWING A SYSTEM MIGRATION, THE FIRM'S SYSTEMS WERE NOT PROPERLY CONFIGURED TO PASS EXECUTION CAPACITY DOWNSTREAM TO CUSTOMER CONFIRMATIONS, IN CERTAIN LIMITED SITUATIONS. WHILE EXTENSIVE PRE-IMPLEMENTATION TESTING WAS COMPLETED, DUE TO THE LIMITED NATURE OF THE CONFIGURATION ISSUE, THE PROBLEM WAS NOT DISCOVERED AND REPORTED UNTIL POST-MIGRATION. THE CONFIGURATION PROBLEM RESULTED IN 22 INSTITUTIONAL CUSTOMERS RECEIVING CONFIRMATIONS RELATED TO 13,231 NON-DOLLAR, AGENCY BLOCK EQUITY TRADES WHICH DID NOT SPECIFY THE CAPACITY. THE TOTAL CONFIRMATIONS AFFECTED WERE 39,256. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 04/08/2013 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 65,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE IT IS CENSURED AND FINED $65,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE IT IS CENSURED AND FINED $65,000
regulatory · block 39PDF pages 233–235
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 1,050,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED, FINED $1,050,000.00, REQUIRED TO REVISE ITS WSPS REGARDING SUPERVISORY PROCEDURES TO BE FOLLOWED BY THE PERSON RESPONSIBLE FOR BEST EXECUTION OF NON-CONVERTIBLE PREFERRED TRANSACTIONS EXECUTED ON IT PROPRIETARY ORDER EXECUTION SYSTEM WITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BY THE NAC, AND TO PAY RESTITUTION OF $323,950.04, PLUS INTEREST, IN CONNECTION WITH THE 12,259 TRANSACTIONS.
Other filed details
Description of allegations — filed text
FINRA RULE 2010, NASD RULES 2110, 2320, 3010 - MERRILL LYNCH, PIERCE, FENNER & SMITH'S PROPRIETARY BOND MARKET ORDER EXECUTION SYSTEM HAD A FLAWED PRICING LOGIC, WITH RESPECT TO NON-CONVERTIBLE PREFERRED SECURITIES, THAT ONLY INCORPORATED THE QUOTATIONS FROM THE TWO PRIMARY EXCHANGES WHERE THE SECURITIES WERE LISTED. AS A RESULT, IN INSTANCES WHERE THERE WAS A BETTER PRICE ON A MARKET OTHER THAN THE PRIMARY LISTING EXCHANGE, THE FIRM SYSTEMATICALLY EXECUTED TRANSACTIONS IN NON-CONVERTIBLE PREFERRED SECURITIES WITH ITS CUSTOMER ON ITS PROPRIETARY ORDER EXECUTION SYSTEM AT PRICES INFERIOR TO THE NATIONAL BEST BID OR OFFER (NBBO). IN 12,259 TRANSACTIONS FOR OR WITH A CUSTOMER, THE FIRM THUS FAILED TO USE REASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER-DEALER MARKET AND FAILED TO BUY OR SELL IN SUCH MARKET SO THAT THE RESULTANT PRICE TO ITS CUSTOMER WAS AS FAVORABLE AS POSSIBLE UNDER PREVAILING MARKET CONDITIONS. THE FIRM FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDING WRITTEN SUPERVISORY PROCEDURES (WSPS) REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH THE FIRM'S BEST EXECUTION OBLIGATIONS FOR TRANSACTIONS IN NON-CONVERTIBLE PREFERRED SECURITIES EXECUTED ON ITS ORDER EXECUTION SYSTEM. THE FIRM'S SUPERVISORY SYSTEM WAS DEFICIENT IN THAT IT FAILED TO PERFORM ANY POST EXECUTION REVIEW OF NON-CONVERTIBLE PREFERRED TRANSACTIONS EXECUTED ON ITS SYSTEM TO ENSURE COMPLIANCE WITH ITS BEST EXECUTION OBLIGATIONS DESPITE THE FACT IT RECEIVED SEVERAL INQUIRY LETTERS FROM FINRA REGARDING THE RELEVANT CONDUCT. ALTHOUGH THE FIRM TOOK SOME REMEDIAL MEASURES INTENDED TO ADDRESS ISSUES RAISED BY FINRA, IT FAILED TO IDENTIFY THE FLAWED PRICING LOGIC UNTIL A LATER DATE. APPROXIMATELY 2,200 TRANSACTIONS WERE IDENTIFIED ON FINRA'S BEST EXECUTION REPORT CARDS AVAILABLE TO THE FIRM FOR OVER THREE YEARS. DESPITE THESE RED FLAGS, THE FIRM FAILED TO PERFORM ANY MEANINGFUL SUPERVISORY REVIEW FOR BEST EXECUTION OF NON-CONVERTIBLE PREFERRED TRANSACTIONS EXECUTED ON ITS PROPRIETARY SYSTEM. THE FIRM'S WSPS WERE NOT ADEQUATE FOR ALMOST THREE YEARS IN THAT THEY DID NOT DESCRIBE THE SUPERVISORY STEPS TO BE TAKEN BY THE PERSON RESPONSIBLE FOR A BEST EXECUTION SUPERVISORY REVIEW OF NON-CONVERTIBLE PREFERRED TRANSACTIONS EXECUTED ON ITS PROPRIETARY SYSTEM. FOR TWO YEARS, THE FIRM'S WSPS DID NOT PROVIDE FOR THE PERSON OR PERSONS RESPONSIBLE FOR ENSURING COMPLIANCE WITH THE APPLICABLE RULES; A STATEMENT OF THE SUPERVISORY STEPS TO BE TAKEN BY THAT PERSON; A STATEMENT AS TO HOW OFTEN SUCH PERSON SHOULD TAKE SUCH STEPS; AND A STATEMENT AS TO HOW THE COMPLETION OF SUPERVISORY REVIEWS SHOULD BE DOCUMENTED.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED, FINED $1,050,000.00, REQUIRED TO REVISE ITS WSPS REGARDING SUPERVISORY PROCEDURES TO BE FOLLOWED BY THE PERSON RESPONSIBLE FOR BEST EXECUTION OF NON-CONVERTIBLE PREFERRED TRANSACTIONS EXECUTED ON ITS PROPRIETARY ORDER EXECUTION SYSTEM WITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BY THE NAC, AND TO PAY RESTITUTION OF $323,950.04, PLUS INTEREST, IN CONNECTION WITH THE 12,259 TRANSACTIONS. A REGISTERED FIRM PRINCIPAL SHALL SUBMIT SATISFACTORY PROOF OF PAYMENT OF THE RESTITUTION, OR OF REASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECT RESTITUTION TO FINRA NO LATER THAN 120 DAYS AFTER ACCEPTANCE OF THIS AWC. ANY UNDISTRIBUTED RESTITUTION AND INTEREST SHALL BE FORWARDED TO THE APPROPRIATE ESCHEAT, UNCLAIMED PROPERTY OR ABANDONED PROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER LAST RESIDED.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: RESTITUTION CENSURE 3. Date Initiated (MM/DD/YYYY): 04/02/2013 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2008014584701 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Equity Listed (Common & Preferred Stock) Other Product Types: NON-CONVERTIBLE PREFERRED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): FINRA RULE 2010, NASD RULES 2110, 2320, 3010 - MERRILL LYNCH, PIERCE, FENNER & SMITH'S PROPRIETARY BOND MARKET ORDER EXECUTION SYSTEM HAD A FLAWED PRICING LOGIC, WITH RESPECT TO NON-CONVERTIBLE PREFERRED SECURITIES, THAT ONLY INCORPORATED THE QUOTATIONS FROM THE TWO PRIMARY EXCHANGES WHERE THE SECURITIES WERE LISTED. AS A RESULT, IN INSTANCES WHERE THERE WAS A BETTER PRICE ON A MARKET OTHER THAN THE PRIMARY LISTING EXCHANGE, THE FIRM SYSTEMATICALLY EXECUTED TRANSACTIONS IN NON-CONVERTIBLE PREFERRED SECURITIES WITH ITS CUSTOMER ON ITS PROPRIETARY ORDER EXECUTION SYSTEM AT PRICES INFERIOR TO THE NATIONAL BEST BID OR OFFER (NBBO). IN 12,259 TRANSACTIONS FOR OR WITH A CUSTOMER, THE FIRM THUS FAILED TO USE REASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER-DEALER MARKET AND FAILED TO BUY OR SELL IN SUCH MARKET SO THAT THE RESULTANT PRICE TO ITS CUSTOMER WAS AS FAVORABLE AS POSSIBLE UNDER PREVAILING MARKET CONDITIONS. THE FIRM FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDING WRITTEN SUPERVISORY PROCEDURES (WSPS) REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH THE FIRM'S BEST EXECUTION OBLIGATIONS FOR TRANSACTIONS IN NON-CONVERTIBLE PREFERRED SECURITIES EXECUTED ON ITS ORDER EXECUTION SYSTEM. THE FIRM'S SUPERVISORY SYSTEM WAS DEFICIENT IN THAT IT FAILED TO PERFORM ANY POST EXECUTION REVIEW OF NON-CONVERTIBLE PREFERRED TRANSACTIONS EXECUTED ON ITS SYSTEM TO ENSURE COMPLIANCE WITH ITS BEST EXECUTION OBLIGATIONS DESPITE THE FACT IT RECEIVED SEVERAL INQUIRY LETTERS FROM FINRA REGARDING THE RELEVANT CONDUCT. ALTHOUGH THE FIRM TOOK SOME REMEDIAL MEASURES INTENDED TO ADDRESS ISSUES RAISED BY FINRA, IT FAILED TO IDENTIFY THE FLAWED PRICING LOGIC UNTIL A LATER DATE. APPROXIMATELY 2,200 TRANSACTIONS WERE IDENTIFIED ON FINRA'S BEST EXECUTION REPORT CARDS AVAILABLE TO THE FIRM FOR OVER THREE YEARS. DESPITE THESE RED FLAGS, THE FIRM FAILED TO PERFORM ANY MEANINGFUL SUPERVISORY REVIEW FOR BEST EXECUTION OF NON-CONVERTIBLE PREFERRED TRANSACTIONS EXECUTED ON ITS PROPRIETARY SYSTEM. THE FIRM'S WSPS WERE NOT ADEQUATE FOR ALMOST THREE YEARS IN THAT THEY DID NOT DESCRIBE THE SUPERVISORY STEPS TO BE TAKEN BY THE PERSON RESPONSIBLE FOR A BEST EXECUTION SUPERVISORY REVIEW OF NON-CONVERTIBLE PREFERRED TRANSACTIONS EXECUTED ON ITS PROPRIETARY SYSTEM. FOR TWO YEARS, THE FIRM'S WSPS DID NOT PROVIDE FOR THE PERSON OR PERSONS RESPONSIBLE FOR ENSURING COMPLIANCE WITH THE APPLICABLE RULES; A STATEMENT OF THE SUPERVISORY STEPS TO BE TAKEN BY THAT PERSON; A STATEMENT AS TO HOW OFTEN SUCH PERSON SHOULD TAKE SUCH STEPS; AND A STATEMENT AS TO HOW THE COMPLETION OF SUPERVISORY REVIEWS SHOULD BE DOCUMENTED. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 04/02/2013 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 1,050,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED, FINED $1,050,000.00, REQUIRED TO REVISE ITS WSPS REGARDING SUPERVISORY PROCEDURES TO BE FOLLOWED BY THE PERSON RESPONSIBLE FOR BEST EXECUTION OF NON-CONVERTIBLE PREFERRED TRANSACTIONS EXECUTED ON ITS PROPRIETARY ORDER EXECUTION SYSTEM WITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BY THE NAC, AND TO PAY RESTITUTION OF $323,950.04, PLUS INTEREST, IN CONNECTION WITH THE 12,259 TRANSACTIONS. A REGISTERED FIRM PRINCIPAL SHALL SUBMIT SATISFACTORY PROOF OF PAYMENT OF THE RESTITUTION, OR OF REASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECT RESTITUTION TO FINRA NO LATER THAN 120 DAYS AFTER ACCEPTANCE OF THIS AWC. ANY UNDISTRIBUTED RESTITUTION AND INTEREST SHALL BE FORWARDED TO THE APPROPRIATE ESCHEAT, UNCLAIMED PROPERTY OR ABANDONED PROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER LAST RESIDED. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED, FINED $1,050,000.00, REQUIRED TO REVISE ITS WSPS REGARDING SUPERVISORY PROCEDURES TO BE FOLLOWED BY THE PERSON RESPONSIBLE FOR BEST EXECUTION OF NON-CONVERTIBLE PREFERRED TRANSACTIONS EXECUTED ON IT PROPRIETARY ORDER EXECUTION SYSTEM WITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BY THE NAC, AND TO PAY RESTITUTION OF $323,950.04, PLUS INTEREST, IN CONNECTION WITH THE 12,259 TRANSACTIONS.
regulatory · block 40PDF pages 235–238
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 900,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE IT IS CENSURED, FINED $900,000 AND MUST PAY RESTITUTION TO CUSTOMERS IN THE AMOUNT OF $1,095,680.83. A REGISTERED PRINCIPAL ON BEHALF OF THE FIRM SHALL SUBMIT SATISFACTORY PROOF OF PAYMENT OF RESTITUTION OR OF REASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECT RESTITUTION TO FINRA NO LATER THAN 120 DAYS AFTER ACCEPTANCE OF THE AWC. IF FOR ANY REASON THE FIRM CANNOT LOCATE ANY OF THE CUSTOMERS RECEIVING RESTITUTION AFTER REASONABLE AND DOCUMENTED EFFORTS WITHIN 120 DAYS FROM THE DATE THE AWC IS ACCEPTED, OR SUCH ADDITIONAL PERIOD AGREED TO BY FINRA, THE FIRM SHALL FORWARD ANY UNDISTRIBUTED RESTITUTION AND INTEREST TO THE APPROPRIATE ESCHEAT, UNCLAIMED PROPERTY OR ABANDONED PROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER IS LAST KNOWN TO HAVE RESIDED. THE FIRM SHALL PROVIDE SATISFACTORY PROOF OF SUCH ACTION TO FINRA WITHIN 14 DAYS OF FORWARDING THE UNDISTRIBUTED RESTITUTION AND INTEREST TO THE APPROPRIATE STATE AUTHORITY.
Other filed details
Description of allegations — filed text
THIS ACTION RELATES TO CONDUCT THAT OCCURRED AT BANC OF AMERICA INVESTMENT SERVICES, INC. (CRD #16361). MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED IS NAMED AS A RESPONDENT SOLELY AS SUCCESSOR IN LIABILITY FOR BANC OF AMERICA INVESTMENT SERVICES, INC. ("BAIS"). FINRA RULE 2010, NASD RULES 2110, 2310, 3010: BAIS REGISTERED REPRESENTATIVES MADE RECOMMENDATIONS THAT CUSTOMERS PURCHASE FLOATING RATE LOAN FUNDS THAT WERE UNSUITABLE FOR THOSE CUSTOMERS IN LIGHT OF THEIR FINANCIAL SITUATIONS AND NEEDS. IN PARTICULAR, BAIS MADE NUMEROUS RECOMMENDATIONS TO PURCHASE FLOATING RATE LOAN FUNDS TO CUSTOMERS WHOSE RISK TOLERANCES, OTHER ASSETS, AND INVESTMENT OBJECTIVES WERE INCONSISTENT WITH THE RISKS AND FEATURES OF FLOATING RATE LOAN FUNDS. THE FLOATING RATE LOAN FUNDS SOLD BY BAIS WERE SUBJECT TO SIGNIFICANT CREDIT AND LIQUIDITY RISKS. CONSEQUENTLY, THESE FUNDS WERE NOT TYPICALLY SUITABLE FOR INVESTORS WITH CONSERVATIVE RISK TOLERANCES OR THOSE CUSTOMERS WHO WERE SEEKING TO PRESERVE PRINCIPAL, PARTICULARLY WHEN THOSE CUSTOMERS' PURCHASES CONSTITUTED A LARGE PERCENTAGE OF THEIR INVESTABLE ASSETS OR LIQUID NET WORTH. MOREOVER, FLOATING RATE LOAN FUNDS, PARTICULARLY THOSE WITH RESTRICTIVE REDEMPTION POLICIES, WERE NOT TYPICALLY SUITABLE FOR INVESTORS WITH SHORT TIME HORIZONS. IN SPITE OF THESE FEATURES OF FLOATING RATE FUNDS, BAIS REPRESENTATIVES RECOMMENDED FLOATING RATE FUND INVESTMENTS TO NUMEROUS CUSTOMERS FOR WHOM THE INVESTMENTS WERE UNSUITABLE IN LIGHT OF THE CUSTOMERS' FINANCIAL SITUATIONS, RISK TOLERANCES, AND INVESTMENT OBJECTIVES. BETWEEN LATE 2007 AND EARLY 2009, THE NET ASSET VALUE OF THE TYPICAL FLOATING RATE LOAN FUNDS DECLINED SUBSTANTIALLY. SINCE THAT TIME, THE NET ASSET VALUE OF THE TYPICAL FLOATING RATE LOAN FUND HAS PARTIALLY RECOVERED. HOWEVER, MANY BAIS CUSTOMERS FOR WHOM THE FLOATING RATE LOAN FUND INVESTMENT WAS UNSUITABLE SOLD THEIR HOLDINGS IN FLOATING RATE LOAN FUNDS AND INCURRED LOSSES. AS A RESULT, BAIS CUSTOMERS SUFFERED LOSSES IN THE TOTAL AMOUNT OF $1,095,680.83 CAUSED BY THE UNSUITABLE TRANSACTIONS IN FLOATING RATE LOAN FUNDS RECOMMENDED BY THE FIRM. BAIS DID NOT ESTABLISH AND MAINTAIN A SYSTEM FOR SUPERVISING ITS SALES OF FLOATING RATE LOAN FUNDS THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE SUITABILITY REQUIREMENTS OF NASD AND FINRA RULES. BAIS FAILED TO IMPLEMENT PROCEDURES REASONABLY DESIGNED TO ENSURE THAT ITS SALES OF FLOATING RATE LOAN FUNDS WERE SUITABLE FOR ITS CUSTOMERS, EVEN AS THE MARKET FOR FLOATING RATE LOAN FUNDS CHANGED SIGNIFICANTLY. IN ADDITION, BAIS FAILED TO ENSURE THAT IT IMPLEMENTED APPROPRIATE SYSTEMS TO FLAG POTENTIALLY UNSUITABLE TRANSACTIONS IN FLOATING RATE LOAN FUNDS. BAIS ALSO FAILED TO PROVIDE SUFFICIENT GUIDANCE ABOUT FLOATING RATE LOAN FUNDS TO REGISTERED REPRESENTATIVES AND THEIR SUPERVISORS. BAIS FAILED TO ADEQUATELY TRAIN ITS REGISTERED PERSONS ABOUT THE CREDIT AND LIQUIDITY RISKS ASSOCIATED WITH FLOATING RATE FUNDS, OR THE CUSTOMERS FOR WHOM SUCH FUNDS WOULD BE SUITABLE.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE IT IS CENSURED, FINED $900,000 AND MUST PAY RESTITUTION TO CUSTOMERS IN THE AMOUNT OF $1,095,680.83. A REGISTERED PRINCIPAL ON BEHALF OF THE FIRM SHALL SUBMIT SATISFACTORY PROOF OF PAYMENT OF RESTITUTION OR OF REASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECT RESTITUTION TO FINRA NO LATER THAN 120 DAYS AFTER ACCEPTANCE OF THE AWC. IF FOR ANY REASON THE FIRM CANNOT LOCATE ANY OF THE CUSTOMERS RECEIVING RESTITUTION AFTER REASONABLE AND DOCUMENTED EFFORTS WITHIN 120 DAYS FROM THE DATE THE AWC IS ACCEPTED, OR SUCH ADDITIONAL PERIOD AGREED TO BY FINRA, THE FIRM SHALL FORWARD ANY UNDISTRIBUTED RESTITUTION AND INTEREST TO THE APPROPRIATE ESCHEAT, UNCLAIMED PROPERTY OR ABANDONED PROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER IS LAST KNOWN TO HAVE RESIDED. THE FIRM SHALL PROVIDE SATISFACTORY PROOF OF SUCH ACTION TO FINRA WITHIN 14 DAYS OF FORWARDING THE UNDISTRIBUTED RESTITUTION AND INTEREST TO THE APPROPRIATE STATE AUTHORITY.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
FINRA
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE; RESTITUTION
3.
Date Initiated (MM/DD/YYYY):
06/03/2013
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
2008014763601
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
FLOATING RATE LOAN FUNDS
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THIS ACTION RELATES TO CONDUCT THAT OCCURRED AT BANC OF AMERICA INVESTMENT SERVICES, INC. (CRD #16361). MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED IS NAMED AS A RESPONDENT SOLELY AS SUCCESSOR IN LIABILITY FOR BANC OF AMERICA INVESTMENT SERVICES,
INC. ("BAIS"). FINRA RULE 2010, NASD RULES 2110, 2310, 3010: BAIS REGISTERED REPRESENTATIVES MADE RECOMMENDATIONS THAT CUSTOMERS
PURCHASE FLOATING RATE LOAN FUNDS THAT WERE UNSUITABLE FOR THOSE CUSTOMERS IN LIGHT OF THEIR FINANCIAL SITUATIONS AND NEEDS. IN
PARTICULAR, BAIS MADE NUMEROUS RECOMMENDATIONS TO PURCHASE FLOATING RATE LOAN FUNDS TO CUSTOMERS WHOSE RISK TOLERANCES,
OTHER ASSETS, AND INVESTMENT OBJECTIVES WERE INCONSISTENT WITH THE RISKS AND FEATURES OF FLOATING RATE LOAN FUNDS. THE FLOATING
RATE LOAN FUNDS SOLD BY BAIS WERE SUBJECT TO SIGNIFICANT CREDIT AND LIQUIDITY RISKS. CONSEQUENTLY, THESE FUNDS WERE NOT TYPICALLY
SUITABLE FOR INVESTORS WITH CONSERVATIVE RISK TOLERANCES OR THOSE CUSTOMERS WHO WERE SEEKING TO PRESERVE PRINCIPAL,
PARTICULARLY WHEN THOSE CUSTOMERS' PURCHASES CONSTITUTED A LARGE PERCENTAGE OF THEIR INVESTABLE ASSETS OR LIQUID NET WORTH.
MOREOVER, FLOATING RATE LOAN FUNDS, PARTICULARLY THOSE WITH RESTRICTIVE REDEMPTION POLICIES, WERE NOT TYPICALLY SUITABLE FOR
INVESTORS WITH SHORT TIME HORIZONS. IN SPITE OF THESE FEATURES OF FLOATING RATE FUNDS, BAIS REPRESENTATIVES RECOMMENDED FLOATING
RATE FUND INVESTMENTS TO NUMEROUS CUSTOMERS FOR WHOM THE INVESTMENTS WERE UNSUITABLE IN LIGHT OF THE CUSTOMERS' FINANCIAL
SITUATIONS, RISK TOLERANCES, AND INVESTMENT OBJECTIVES. BETWEEN LATE 2007 AND EARLY 2009, THE NET ASSET VALUE OF THE TYPICAL
FLOATING RATE LOAN FUNDS DECLINED SUBSTANTIALLY. SINCE THAT TIME, THE NET ASSET VALUE OF THE TYPICAL FLOATING RATE LOAN FUND HAS
PARTIALLY RECOVERED. HOWEVER, MANY BAIS CUSTOMERS FOR WHOM THE FLOATING RATE LOAN FUND INVESTMENT WAS UNSUITABLE SOLD THEIR
HOLDINGS IN FLOATING RATE LOAN FUNDS AND INCURRED LOSSES. AS A RESULT, BAIS CUSTOMERS SUFFERED LOSSES IN THE TOTAL AMOUNT OF
$1,095,680.83 CAUSED BY THE UNSUITABLE TRANSACTIONS IN FLOATING RATE LOAN FUNDS RECOMMENDED BY THE FIRM. BAIS DID NOT ESTABLISH
AND MAINTAIN A SYSTEM FOR SUPERVISING ITS SALES OF FLOATING RATE LOAN FUNDS THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE
WITH THE SUITABILITY REQUIREMENTS OF NASD AND FINRA RULES. BAIS FAILED TO IMPLEMENT PROCEDURES REASONABLY DESIGNED TO ENSURE
THAT ITS SALES OF FLOATING RATE LOAN FUNDS WERE SUITABLE FOR ITS CUSTOMERS, EVEN AS THE MARKET FOR FLOATING RATE LOAN FUNDS
CHANGED SIGNIFICANTLY. IN ADDITION, BAIS FAILED TO ENSURE THAT IT IMPLEMENTED APPROPRIATE SYSTEMS TO FLAG POTENTIALLY UNSUITABLE
TRANSACTIONS IN FLOATING RATE LOAN FUNDS. BAIS ALSO FAILED TO PROVIDE SUFFICIENT GUIDANCE ABOUT FLOATING RATE LOAN FUNDS TO
REGISTERED REPRESENTATIVES AND THEIR SUPERVISORS. BAIS FAILED TO ADEQUATELY TRAIN ITS REGISTERED PERSONS ABOUT THE CREDIT AND
LIQUIDITY RISKS ASSOCIATED WITH FLOATING RATE FUNDS, OR THE CUSTOMERS FOR WHOM SUCH FUNDS WOULD BE SUITABLE.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
06/03/2013
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 900,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;
THEREFORE IT IS CENSURED, FINED $900,000 AND MUST PAY RESTITUTION TO CUSTOMERS IN THE AMOUNT OF $1,095,680.83. A REGISTERED
PRINCIPAL ON BEHALF OF THE FIRM SHALL SUBMIT SATISFACTORY PROOF OF PAYMENT OF RESTITUTION OR OF REASONABLE AND DOCUMENTED
EFFORTS UNDERTAKEN TO EFFECT RESTITUTION TO FINRA NO LATER THAN 120 DAYS AFTER ACCEPTANCE OF THE AWC. IF FOR ANY REASON THE
FIRM CANNOT LOCATE ANY OF THE CUSTOMERS RECEIVING RESTITUTION AFTER REASONABLE AND DOCUMENTED EFFORTS WITHIN 120 DAYS
FROM THE DATE THE AWC IS ACCEPTED, OR SUCH ADDITIONAL PERIOD AGREED TO BY FINRA, THE FIRM SHALL FORWARD ANY UNDISTRIBUTED
RESTITUTION AND INTEREST TO THE APPROPRIATE ESCHEAT, UNCLAIMED PROPERTY OR ABANDONED PROPERTY FUND FOR THE STATE IN WHICH
THE CUSTOMER IS LAST KNOWN TO HAVE RESIDED. THE FIRM SHALL PROVIDE SATISFACTORY PROOF OF SUCH ACTION TO FINRA WITHIN 14
DAYS OF FORWARDING THE UNDISTRIBUTED RESTITUTION AND INTEREST TO THE APPROPRIATE STATE AUTHORITY.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE
IT IS CENSURED, FINED $900,000 AND MUST PAY RESTITUTION TO CUSTOMERS IN THE AMOUNT OF $1,095,680.83. A REGISTERED PRINCIPAL ON
BEHALF OF THE FIRM SHALL SUBMIT SATISFACTORY PROOF OF PAYMENT OF RESTITUTION OR OF REASONABLE AND DOCUMENTED EFFORTS
UNDERTAKEN TO EFFECT RESTITUTION TO FINRA NO LATER THAN 120 DAYS AFTER ACCEPTANCE OF THE AWC. IF FOR ANY REASON THE FIRM CANNOT
LOCATE ANY OF THE CUSTOMERS RECEIVING RESTITUTION AFTER REASONABLE AND DOCUMENTED EFFORTS WITHIN 120 DAYS FROM THE DATE THE
AWC IS ACCEPTED, OR SUCH ADDITIONAL PERIOD AGREED TO BY FINRA, THE FIRM SHALL FORWARD ANY UNDISTRIBUTED RESTITUTION AND INTEREST
TO THE APPROPRIATE ESCHEAT, UNCLAIMED PROPERTY OR ABANDONED PROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER IS LAST KNOWN TO
HAVE RESIDED. THE FIRM SHALL PROVIDE SATISFACTORY PROOF OF SUCH ACTION TO FINRA WITHIN 14 DAYS OF FORWARDING THE UNDISTRIBUTED
RESTITUTION AND INTEREST TO THE APPROPRIATE STATE AUTHORITY.regulatory · block 41PDF pages 238–239
- Regulator name — filed text
- NASDAQ STOCK MARKET
- Monetary/Fine Amount — filed text
- $ 10,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $10,000.
Other filed details
Description of allegations — filed text
NASDAQ RULE 4755 - MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ENTERED ORDERS INTO THE NASDAQ MARKET CENTER THAT FAILED TO CORRECTLY INDICATE WHETHER THE ORDERS WERE A BUY, SHORT SALE OR LONG SALE.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $10,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) NASDAQ STOCK MARKET 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 06/07/2013 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2011026097801 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: UNSPECIFIED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): NASDAQ RULE 4755 - MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ENTERED ORDERS INTO THE NASDAQ MARKET CENTER THAT FAILED TO CORRECTLY INDICATE WHETHER THE ORDERS WERE A BUY, SHORT SALE OR LONG SALE. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 06/07/2013 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 10,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $10,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $10,000.
regulatory · block 42PDF pages 239–241
- Regulator name — filed text
- NEW HAMPSHIRE BUREAU OF SECURITIES REGULATION (THE "BUREAU")
- Monetary/Fine Amount — filed text
- $ 7,500.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS AND FINDINGS, MERRILL LYNCH CONSENTED TO A CONSENT ORDER FOR CENSURE; THEREFORE, MERRILL LYNCH IS CENSURED, FINED $7,500, AND ORDERED TO PAY THE COSTS OF THE INVESTIGATION.
Other filed details
Description of allegations — filed text
AS THE RESULT OF A CUSTOMER COMPLAINT RECEIVED BY THE BUREAU IN AUGUST 2010, A REGISTERED REPRESENTATIVE OF MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH") LOCATED IN THE PORTSMOUTH, NEW HAMPSHIRE BRANCH WAS PLACE ON HEIGHTENED SUPERVISION. IN JANUARY 2011, THE BUREAU CONDUCTED AN ON-SITE EXAMINATION OF MERRILL LYNCH'S PORTSMOUTH, NEW HAMPSHIRE BRANCH. AS A RESULT OF THIS EXAMINATION, THE BUREAU ALLEGED THAT MERRILL LYNCH FAILED TO PROPERLY SUPERVISE THE REGISTERED REPRESENTATIVE AND THAT, DURING THE RELEVANT TIME PERIOD, MERRILL LYNCH EITHER IGNORED OR FAILED TO IDENTIFY CERTAIN RED FLAGS IN THE CUSTOMER'S ACCOUNT THAT SHOULD HAVE LED MERRILL LYNCH'S SUPERVISORS TO TAKE ACTION AGAINST THEIR REGISTERED REPRESENTATIVE SOONER THAN THEY ULTIMATELY DID.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS AND FINDINGS, MERRILL LYNCH CONSENTED TO A CONSENT ORDER FOR CENSURE; THEREFORE, MERRILL LYNCH IS CENSURED, FINED $7,500, AND ORDERED TO PAY THE COSTS OF THE INVESTIGATION.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
NEW HAMPSHIRE BUREAU OF SECURITIES REGULATION (THE "BUREAU")
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE; COSTS OF INVESTIGATION
3.
Date Initiated (MM/DD/YYYY):
06/03/2013
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
C-2010-008
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
AS THE RESULT OF A CUSTOMER COMPLAINT RECEIVED BY THE BUREAU IN AUGUST 2010, A REGISTERED REPRESENTATIVE OF MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED ("MERRILL LYNCH") LOCATED IN THE PORTSMOUTH, NEW HAMPSHIRE BRANCH WAS PLACE ON HEIGHTENED
SUPERVISION. IN JANUARY 2011, THE BUREAU CONDUCTED AN ON-SITE EXAMINATION OF MERRILL LYNCH'S PORTSMOUTH, NEW HAMPSHIRE BRANCH.
AS A RESULT OF THIS EXAMINATION, THE BUREAU ALLEGED THAT MERRILL LYNCH FAILED TO PROPERLY SUPERVISE THE REGISTERED REPRESENTATIVE
AND THAT, DURING THE RELEVANT TIME PERIOD, MERRILL LYNCH EITHER IGNORED OR FAILED TO IDENTIFY CERTAIN RED FLAGS IN THE CUSTOMER'S
ACCOUNT THAT SHOULD HAVE LED MERRILL LYNCH'S SUPERVISORS TO TAKE ACTION AGAINST THEIR REGISTERED REPRESENTATIVE SOONER THAN
THEY ULTIMATELY DID.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Order
11. Resolution Date (MM/DD/YYYY):
06/04/2013
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 7,500.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
COSTS OF INVESTIGATION IN THE AMOUNT OF $72,500.
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS AND FINDINGS, MERRILL LYNCH CONSENTED TO A CONSENT ORDER FOR CENSURE;
THEREFORE, MERRILL LYNCH IS CENSURED, FINED $7,500, AND ORDERED TO PAY THE COSTS OF THE INVESTIGATION.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS AND FINDINGS, MERRILL LYNCH CONSENTED TO A CONSENT ORDER FOR CENSURE; THEREFORE,
MERRILL LYNCH IS CENSURED, FINED $7,500, AND ORDERED TO PAY THE COSTS OF THE INVESTIGATION.regulatory · block 43PDF pages 241–243
- Regulator name — filed text
- CHICAGO MERCANTILE EXCHANGE ("CME")
- Monetary/Fine Amount — filed text
- $ 5,000.00
- How was matter resolved — filed text
- Settled
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE APPLICANT AGREED TO SETTLE THE MATTER WITH THE PAYMENT OF A FINE IN ACCORDANCE WITH THE AUTOMATIC FINE SCHEDULE.
Other filed details
Description of allegations — filed text
PURSUANT TO A PIT, GLOBEX AND NEGOTIATED TRADES-CTR AUDIT CONDUCTED BY THE CHICAGO MERCANTILE EXCHANGE ("CME"), THE DESIGNATED SELF-REGULATORY ORGANIZATION FOR THE FUTURES COMMISSION MERCHANT BUSINESS, THE APPLICANT WAS FOUND TO HAVE VIOLATED CME RULE 536.F WHEN TRADE DATA REVIEWED FOR THE TRADE DATES OF APRIL 15 AND 16, 2013 REFLECTED AN UNACCEPTABLE CTR ERROR RATE OF 30.30%.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE APPLICANT AGREED TO SETTLE THE MATTER WITH THE PAYMENT OF A FINE IN ACCORDANCE WITH THE AUTOMATIC FINE SCHEDULE.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
CHICAGO MERCANTILE EXCHANGE ("CME")
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
3.
Date Initiated (MM/DD/YYYY):
06/11/2013
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
13-7524
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Futures - Financial
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
PURSUANT TO A PIT, GLOBEX AND NEGOTIATED TRADES-CTR AUDIT CONDUCTED BY THE CHICAGO MERCANTILE EXCHANGE ("CME"), THE DESIGNATED
SELF-REGULATORY ORGANIZATION FOR THE FUTURES COMMISSION MERCHANT BUSINESS, THE APPLICANT WAS FOUND TO HAVE VIOLATED CME RULE
536.F WHEN TRADE DATA REVIEWED FOR THE TRADE DATES OF APRIL 15 AND 16, 2013 REFLECTED AN UNACCEPTABLE CTR ERROR RATE OF 30.30%.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Settled
11. Resolution Date (MM/DD/YYYY):
06/11/2013
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 5,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE APPLICANT AGREED TO SETTLE THE MATTER WITH THE PAYMENT OF A FINE IN
ACCORDANCE WITH THE AUTOMATIC FINE SCHEDULE.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE APPLICANT AGREED TO SETTLE THE MATTER WITH THE PAYMENT OF A FINE IN ACCORDANCE
WITH THE AUTOMATIC FINE SCHEDULE.regulatory · block 44PDF pages 243–245
- Regulator name — filed text
- STATE OF HAWAII - DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS
- Monetary/Fine Amount — filed text
- $ 894,556.11
- How was matter resolved — filed text
- Settled
Action status / disposition — filed text
UNDER THE TERMS OF THE SETTLEMENT, MLPFS AGREED TO UNDERTAKINGS DESIGNED TO PROVIDE LIQUIDITY TO ELIGIBLE INVESTORS. MLPFS HAS OFFERED TO PURCHASE AT PAR FROM ELIGIBLE INVESTORS CERTAIN ARS THAT HAVE FAILED AT AUCTION. MLPFS HAS ALSO AGREED TO PAY THOSE ELIGIBLE INVESTORS THAT MLPFS CAN REASONABLY IDENTIFY WHO SOLD CERTAIN ARS BELOW PAR, THE DIFFERENCE BETWEEN PAR AND THE PRICE AT WHICH THEY SOLD SUCH SECURITIES. MLPFS HAS ALSO AGREED TO PARTICIPATE IN A SPECIAL ARBITRATION PROCESS FOR THE PURPOSE OF ARBITRATING ANY ELIGIBLE INVESTOR'S CONSEQUENTIAL DAMAGES CLAIM ARISING FROM THEIR INABILITY TO SELL CERTAIN ARS. FURTHERMORE, MLPFS AGREED TO REFUND REFINANCING FEES TO CERTAIN MUNICIPAL ISSUERS THAT ISSUED AND REFINANCED CERTAIN ARS THROUGH MLPFS. MLPFS WILL ALSO ENDEAVOR TO WORK WITH ISSUERS AND OTHER INTERESTED PARTIES TO PROVIDE LIQUIDITY SOLUTIONS FOR INSTITUTIONAL INVESTORS THAT PURCHASED CERTAIN ARS FROM MLPFS BUT ARE NOT CONSIDERED "ELIGIBLE INVESTORS" AND ARE NOT ENTITLED TO PARTICIPATE IN THE ARS BUYBACK UNDER THE TERMS OF THE SETTLEMENT.
Other filed details
Description of allegations — filed text
THE COMMISSIONER OF SECURITIES OF THE STATE OF HAWAII (COMMISSIONER) ALLEGED THAT MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED'S (MLPFS) CONDUCT IN CONNECTION WITH THE MARKETING AND SALE OF AUCTION RATE SECURITIES (ARS) TO RETAIL AND OTHER CUSTOMERS VIOLATED HAWAII REVISED STATUTES (HRS) SECTION 485-15(7) SOLELY TO THE EXTENT THAT IT CONCERNS DISHONEST OR UNETHICAL PRACTICES AND HRS SECTION 485-15(10) FOR FAILURE TO SUPERVISE.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, MLPFS ENTERED INTO A SETTLEMENT WITH THE COMMISSIONER, IN WHICH IT AGREED TO CEASE AND DESIST FROM VIOLATING THE HAWAII UNIFORM SECURITIES ACT (ACT) AND ANY SUCCESSOR ACT, TO COMPLY WITH THE ACT AND ANY SUCCESSOR ACT, AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROM ELIGIBLE INVESTORS. MLPFS AGREED TO PAY THE STATE OF HAWAII A TOTAL PAYMENT OF $894,556.11 AS PART OF A $125,000,000.00 PENALTY THAT WILL BE ALLOCATED AT THE COMMONWEALTH OF MASSACHUSETTS AND OTHER STATES' DISCRETION TO RESOLVE ALL UNDERLYING CONDUCT RELATING TO THE SALE OF ARS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) STATE OF HAWAII - DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CEASE AND DESIST; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 07/11/2013 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: SEU-2008-016, SEU-2008-55, SEU-2008-071 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: AUCTION RATE SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE COMMISSIONER OF SECURITIES OF THE STATE OF HAWAII (COMMISSIONER) ALLEGED THAT MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED'S (MLPFS) CONDUCT IN CONNECTION WITH THE MARKETING AND SALE OF AUCTION RATE SECURITIES (ARS) TO RETAIL AND OTHER CUSTOMERS VIOLATED HAWAII REVISED STATUTES (HRS) SECTION 485-15(7) SOLELY TO THE EXTENT THAT IT CONCERNS DISHONEST OR UNETHICAL PRACTICES AND HRS SECTION 485-15(10) FOR FAILURE TO SUPERVISE. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Settled 11. Resolution Date (MM/DD/YYYY): 07/11/2013 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 894,556.11 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKINGS Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, MLPFS ENTERED INTO A SETTLEMENT WITH THE COMMISSIONER, IN WHICH IT AGREED TO CEASE AND DESIST FROM VIOLATING THE HAWAII UNIFORM SECURITIES ACT (ACT) AND ANY SUCCESSOR ACT, TO COMPLY WITH THE ACT AND ANY SUCCESSOR ACT, AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROM ELIGIBLE INVESTORS. MLPFS AGREED TO PAY THE STATE OF HAWAII A TOTAL PAYMENT OF $894,556.11 AS PART OF A $125,000,000.00 PENALTY THAT WILL BE ALLOCATED AT THE COMMONWEALTH OF MASSACHUSETTS AND OTHER STATES' DISCRETION TO RESOLVE ALL UNDERLYING CONDUCT RELATING TO THE SALE OF ARS. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). UNDER THE TERMS OF THE SETTLEMENT, MLPFS AGREED TO UNDERTAKINGS DESIGNED TO PROVIDE LIQUIDITY TO ELIGIBLE INVESTORS. MLPFS HAS OFFERED TO PURCHASE AT PAR FROM ELIGIBLE INVESTORS CERTAIN ARS THAT HAVE FAILED AT AUCTION. MLPFS HAS ALSO AGREED TO PAY THOSE ELIGIBLE INVESTORS THAT MLPFS CAN REASONABLY IDENTIFY WHO SOLD CERTAIN ARS BELOW PAR, THE DIFFERENCE BETWEEN PAR AND THE PRICE AT WHICH THEY SOLD SUCH SECURITIES. MLPFS HAS ALSO AGREED TO PARTICIPATE IN A SPECIAL ARBITRATION PROCESS FOR THE PURPOSE OF ARBITRATING ANY ELIGIBLE INVESTOR'S CONSEQUENTIAL DAMAGES CLAIM ARISING FROM THEIR INABILITY TO SELL CERTAIN ARS. FURTHERMORE, MLPFS AGREED TO REFUND REFINANCING FEES TO CERTAIN MUNICIPAL ISSUERS THAT ISSUED AND REFINANCED CERTAIN ARS THROUGH MLPFS. MLPFS WILL ALSO ENDEAVOR TO WORK WITH ISSUERS AND OTHER INTERESTED PARTIES TO PROVIDE LIQUIDITY SOLUTIONS FOR INSTITUTIONAL INVESTORS THAT PURCHASED CERTAIN ARS FROM MLPFS BUT ARE NOT CONSIDERED "ELIGIBLE INVESTORS" AND ARE NOT ENTITLED TO PARTICIPATE IN THE ARS BUYBACK UNDER THE TERMS OF THE SETTLEMENT.
regulatory · block 45PDF pages 245–247
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 17,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE THE FIRM IS CENSURED AND FINED $17,000.
Other filed details
Description of allegations — filed text
FINRA RULE 6760(C): THE FIRM, AS MANAGING UNDERWRITER (UNDER THE "BOFA" MPID AND "MLCO" MPID), FAILED TO TIMELY REPORT NEW ISSUE OFFERINGS IN TRADE REPORTING AND COMPLIANCE ENGINE® (TRACE®)ELIGIBLE SECURITIES TO FINRA IN ACCORDANCE WITH THE REQUIREMENTS OF FINRA RULE 6760(C). THE 89 NEW ISSUE OFFERINGS CONSTITUTED 70 PERCENT OF THE 127 NEW ISSUE OFFERINGS IN TRACE-ELIGIBLE SECURITIES UNDER THE "BOFA" MPID AND THE 28 NEW ISSUE OFFERINGS CONSTITUTED 11 PERCENT OF THE 260 NEW ISSUE OFFERINGS IN TRACE- ELIGIBLE SECURITIES UNDER THE "MLCO" MPID THAT THE FIRM HAD AN OBLIGATION TO PROVIDE TO FINRA PURSUANT TO FINRA RULE 6760.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE THE FIRM IS CENSURED AND FINED $17,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 08/05/2013 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2012032501601 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Debt - Corporate Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): FINRA RULE 6760(C): THE FIRM, AS MANAGING UNDERWRITER (UNDER THE "BOFA" MPID AND "MLCO" MPID), FAILED TO TIMELY REPORT NEW ISSUE OFFERINGS IN TRADE REPORTING AND COMPLIANCE ENGINE® (TRACE®)ELIGIBLE SECURITIES TO FINRA IN ACCORDANCE WITH THE REQUIREMENTS OF FINRA RULE 6760(C). THE 89 NEW ISSUE OFFERINGS CONSTITUTED 70 PERCENT OF THE 127 NEW ISSUE OFFERINGS IN TRACE-ELIGIBLE SECURITIES UNDER THE "BOFA" MPID AND THE 28 NEW ISSUE OFFERINGS CONSTITUTED 11 PERCENT OF THE 260 NEW ISSUE OFFERINGS IN TRACE- ELIGIBLE SECURITIES UNDER THE "MLCO" MPID THAT THE FIRM HAD AN OBLIGATION TO PROVIDE TO FINRA PURSUANT TO FINRA RULE 6760. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 08/05/2013 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 17,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE THE FIRM IS CENSURED AND FINED $17,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE THE FIRM IS CENSURED AND FINED $17,000.
regulatory · block 46PDF pages 247–249
- Regulator name — filed text
- MISSOURI SECURITIES DIVISION OF THE OFFICE OF THE SECRETARY OF STATE ("DIVISION")
- Monetary/Fine Amount — filed text
- $ 500,000.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS MADE BY THE DIVISION, MLPF&S IS CENSURED. IN ADDITION MLPF&S SHALL COMPENSATE CLIENTS FOR ANY FUNDS IMPROPERLY WITHDRAWN OR TRANSFERRED FROM ANY MLPF&S CLIENT ACCOUNTS BY THE REGISTERED AGENT; SHALL NOT SEEK TO COLLECT ON ANY CLIENT LMA BALANCE THAT WAS INCURRED AS A RESULT OF THE REGISTERED AGENT'S FRAUDULENT ACTIVITIES; AND SHALL PAY THE SUM OF $500,000 TO THE MISSOURI SECRETARY OF STATE'S INVESTOR EDUCATION AND PROTECTION FUND WITHIN 10 DAYS OF EFFECTIVE DATE OF THE CONSENT ORDER. AS OF JULY 12, 2013, MLPF&S HAS COMPENSATED $89,055.67 TO MLPF&S CLIENT ACCOUNTS AND HAS WRITTEN OFF LMA BALANCES FOR THE MLPF&S CLIENT ACCOUNTS TOTALING APPROXIMATELY $1,532,524. THIS MATTER WAS SELF-REPORTED TO THE DIVISION BY MLPF&S.
Other filed details
Description of allegations — filed text
THE DIVISION FOUND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MLPF&S") FAILED TO SUPERVISE A MISSOURI-REGISTERED AGENT EMPLOYED BY MLPF&S WHO ENGAGED IN DISHONEST AND UNETHICAL PRACTICES IN VIOLATION OF SECTION 409.4-212(D)(13), RSMO. (CUM. SUPP. 2011). MLPF&S IS SUBJECT TO DISCIPLINE FOR FAILING TO REASONABLY SUPERVISE THE REGISTERED AGENT'S ACTIVITIES PURSUANT TO SECTION 409.4-412(D)(9) RSMO. (CUM. SUPP. 2011).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS MADE BY THE DIVISION, MLPF&S IS CENSURED. IN ADDITION MLPF&S SHALL COMPENSATE CLIENTS FOR ANY FUNDS IMPROPERLY WITHDRAWN OR TRANSFERRED FROM ANY MLPF&S CLIENT ACCOUNTS BY THE REGISTERED AGENT; SHALL NOT SEEK TO COLLECT ON ANY CLIENT LMA BALANCE THAT WAS INCURRED AS A RESULT OF THE REGISTERED AGENT'S FRAUDULENT ACTIVITIES; AND SHALL PAY THE SUM OF $500,000 TO THE MISSOURI SECRETARY OF STATE'S INVESTOR EDUCATION AND PROTECTION FUND WITHIN 10 DAYS OF EFFECTIVE DATE OF THE CONSENT ORDER. AS OF JULY 12, 2013, MLPF&S HAS COMPENSATED $89,055.67 TO MLPF&S CLIENT ACCOUNTS AND HAS WRITTEN OFF LMA BALANCES FOR THE MLPF&S CLIENT ACCOUNTS TOTALING APPROXIMATELY $1,532,524. THIS MATTER WAS SELF-REPORTED TO THE DIVISION BY MLPF&S.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
MISSOURI SECURITIES DIVISION OF THE OFFICE OF THE SECRETARY OF STATE ("DIVISION")
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE
3.
Date Initiated (MM/DD/YYYY):
07/31/2013
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
AP-13-14
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE DIVISION FOUND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MLPF&S") FAILED TO SUPERVISE A MISSOURI-REGISTERED AGENT
EMPLOYED BY MLPF&S WHO ENGAGED IN DISHONEST AND UNETHICAL PRACTICES IN VIOLATION OF SECTION 409.4-212(D)(13), RSMO. (CUM. SUPP.
2011). MLPF&S IS SUBJECT TO DISCIPLINE FOR FAILING TO REASONABLY SUPERVISE THE REGISTERED AGENT'S ACTIVITIES PURSUANT TO SECTION
409.4-412(D)(9) RSMO. (CUM. SUPP. 2011).
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Consent
11. Resolution Date (MM/DD/YYYY):
07/31/2013
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 500,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS MADE BY THE DIVISION, MLPF&S IS CENSURED. IN ADDITION MLPF&S SHALL COMPENSATE
CLIENTS FOR ANY FUNDS IMPROPERLY WITHDRAWN OR TRANSFERRED FROM ANY MLPF&S CLIENT ACCOUNTS BY THE REGISTERED AGENT; SHALL
NOT SEEK TO COLLECT ON ANY CLIENT LOAN MANAGEMENT ACCOUNT ("LMA") BALANCE THAT WAS INCURRED AS A RESULT OF THE REGISTERED
AGENT'S FRAUDULENT ACTIVITIES; AND SHALL PAY THE SUM OF $500,000 TO THE MISSOURI SECRETARY OF STATE'S INVESTOR EDUCATION AND
PROTECTION FUND WITHIN 10 DAYS OF EFFECTIVE DATE OF THE CONSENT ORDER.
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS MADE BY THE DIVISION, MLPF&S IS CENSURED. IN ADDITION MLPF&S SHALL COMPENSATE
CLIENTS FOR ANY FUNDS IMPROPERLY WITHDRAWN OR TRANSFERRED FROM ANY MLPF&S CLIENT ACCOUNTS BY THE REGISTERED AGENT; SHALL
NOT SEEK TO COLLECT ON ANY CLIENT LMA BALANCE THAT WAS INCURRED AS A RESULT OF THE REGISTERED AGENT'S FRAUDULENT ACTIVITIES;
AND SHALL PAY THE SUM OF $500,000 TO THE MISSOURI SECRETARY OF STATE'S INVESTOR EDUCATION AND PROTECTION FUND WITHIN 10
DAYS OF EFFECTIVE DATE OF THE CONSENT ORDER. AS OF JULY 12, 2013, MLPF&S HAS COMPENSATED $89,055.67 TO MLPF&S CLIENT
ACCOUNTS AND HAS WRITTEN OFF LMA BALANCES FOR THE MLPF&S CLIENT ACCOUNTS TOTALING APPROXIMATELY $1,532,524. THIS MATTER
WAS SELF-REPORTED TO THE DIVISION BY MLPF&S.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS MADE BY THE DIVISION, MLPF&S IS CENSURED. IN ADDITION MLPF&S SHALL COMPENSATE
CLIENTS FOR ANY FUNDS IMPROPERLY WITHDRAWN OR TRANSFERRED FROM ANY MLPF&S CLIENT ACCOUNTS BY THE REGISTERED AGENT; SHALL NOT
SEEK TO COLLECT ON ANY CLIENT LMA BALANCE THAT WAS INCURRED AS A RESULT OF THE REGISTERED AGENT'S FRAUDULENT ACTIVITIES; AND SHALL
PAY THE SUM OF $500,000 TO THE MISSOURI SECRETARY OF STATE'S INVESTOR EDUCATION AND PROTECTION FUND WITHIN 10 DAYS OF EFFECTIVE
DATE OF THE CONSENT ORDER. AS OF JULY 12, 2013, MLPF&S HAS COMPENSATED $89,055.67 TO MLPF&S CLIENT ACCOUNTS AND HAS WRITTEN OFF
LMA BALANCES FOR THE MLPF&S CLIENT ACCOUNTS TOTALING APPROXIMATELY $1,532,524. THIS MATTER WAS SELF-REPORTED TO THE DIVISION BY
MLPF&S.regulatory · block 47PDF pages 249–251
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 325,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
(CONTINUED FROM ITEM 7.) AND BECAUSE THE DISCLOSURE AND PRICE CHART FAILURES WERE CAUSED BY INACCURACIES IN UNDERLYING DATA, THE PROCEDURES WERE INEFFECTIVE IN IDENTIFYING THE DISCLOSURES AND PRICE CHART DEFICIENCIES. BECAUSE THE PROCEDURES WERE NOT DESIGNATED TO EVALUATE THE UNDERLYING ACCURACY OF THE DATA FROM INTERNAL AND EXTERNAL DATA SOURCES IN THE RESEARCH DATA REPOSITORY, AND BECAUSE THE DISCLOSURE AND PRICE CHART FAILURES WERE CAUSED BY INACCURACIES IN UNDERLYING DATA, THE PROCEDURES WERE INEFFECTIVE IN IDENTIFYING THE DISCLOSURES AND PRICE CHART DEFICIENCIES. THE FIRM ALSO DID NOT HAVE PROCEDURES DESIGNED TO ENSURE THAT THIRD PARTY PRICING INFORMATION USED FOR PRICE CHARTS WAS ACCURATE AS IT RELATED TO CORPORATE ACTIONS AFFECTING THE PRICE OF STOCK AND SUCH ADJUSTED PRICES WERE ACCURATELY REFLECTED ON THE PRICE CHART. WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE IT IS CENSURED AND FINED $325,000. IN DETERMINING THE SANCTIONS IN THIS MATTER, FINRA TOOK INTO CONSIDERATION SEVERAL FACTORS: (1) THE FIRM PROMPTLY SELF-REPORTED ALL OF THE DEFICIENCIES SET FORTH IN THIS AWC: (2) THE FIRM TOOK SIGNIFICANT REMEDIAL ACTION TO PREVENT THE REOCCURRENCE OF THESE DEFICIENCIES: AND (3) IN EARLY 2011, THE FIRM ENGAGED AN INDEPENDENT CONSULTANT FOR A 22 MONTH PERIOD TO ASSIST AN INTERNAL TASK FORCE WITH, AMONG OTHER THINGS, INTRODUCING NEW TECHNOLOGIES AND PROCESSES DESIGNED TO REMEDY THE PROBLEMS THAT HAD BEEN CAUSED BY INACCURATE UPSTREAM DATA.
Other filed details
Description of allegations — filed text
FINRA RULE 2010 AND NASD RULES 2110 AND 2711 AND 2711(I): AS A RESULT OF THE ACQUISITION OF MERRILL LYNCH & CO., INC. BY BANK OF AMERICA CORPORATION, THE RESEARCH DEPARTMENT OF MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (FIRM) WAS REQUIRED TO CONSIDER BOTH ENTITIES' RELATIONSHIP WITH THE COMPANIES THAT WERE THE SUBJECT OF THE RESEARCH REPORT (COVERED COMPANIES) IN DETERMINING WHICH REQUIRED DISCLOSURES TO INCLUDE IN RESEARCH REPORTS ISSUED BY THE FIRM. AS A RESULT OF THE COMPRESSED TIMELINE OF THE ACQUISITION, THE FIRM STILL USED SEPARATE SYSTEMS FROM EACH ENTITY AFTER THE ACQUISITION, AND RESEARCH AND TECHNOLOGY TEAMS FROM THE TWO ENTITIES WERE REQUIRED TO AGGREGATE INFORMATION ABOUT THE TWO ENTITIES' RESPECTIVE RELATIONSHIPS WITH COVERED COMPANIES IN ORDER TO GENERATE COMPLETE AND ACCURATE REQUIRED DISCLOSURES IN RESEARCH REPORTS. HOWEVER, ERRORS OCCURRED IN THIS AGGREGATION PROCESS THAT WAS NOT DISCOVERED BY THE FIRM FOR 18 MONTHS. AN UPSTREAM COMPANY FILE THAT WAS USED TO MATCH COMPANIES COVERED BY THE FIRM'S RESEARCH DEPARTMENT WITH THE COMPANY REVENUES AND CLIENT RELATIONSHIPS INCLUDED INACCURATE DATA, AND THE PROCESS DESIGNED TO UPDATE THAT FILE FAILED. AS A RESULT, THE COMPANY INFORMATION USED BY THE FIRM'S RESEARCH DATA REPOSITORY TO DETERMINE DISCLOSURES WAS STALE AND RESULTED IN THE OMISSION OF REQUIRED DISCLOSURES IN APPROXIMATELY 19,200 RESEARCH REPORTS. AN ADDITIONAL DISCLOSURE DEFICIENCY BEGAN ON AN UNDETERMINED DATE THROUGH OCTOBER 2010, WHEN A THIRD-PARTY VENDOR PROVIDED INCOMPLETE DATA TO THE FIRM RELATED TO 22 COVERED COMPANIES. AS A RESULT OF THE INCOMPLETE DATA, AN UNDETERMINED NUMBER OF RESEARCH REPORTS RELATING TO THE 22 COVERED COMPANIES FAILED TO DISCLOSE WHETHER THE FIRM HAD MANAGED OR CO-MANAGED A PUBLIC OFFERING OF THE COVERED COMPANY'S SECURITIES IN THE PAST 12 MONTHS. THE MISSING DATA WAS DISCOVERED AND CORRECTED, BUT IT HAS NOT BEEN DETERMINED WHEN THE DISCLOSURE DEFICIENCY BEGAN OR HOW MANY RESEARCH REPORTS WERE IMPACTED BY IT. A NEW THIRD-PARTY VENDOR BEGAN PROVIDING THE FIRM WITH STOCK PRICE INFORMATION THAT CONTAINED INCORRECT DATA RELATED TO CERTAIN COVERED COMPANIES THAT HAD BEEN IMPACTED BY A STOCK SPLIT. THE DATA PROBLEM OCCURRED IN EACH MONTHLY FILE THAT THE FIRM RECEIVED FROM THE VENDOR SINCE SEPTEMBER 2008 THROUGH MARCH 2011, AND IMPACTED AS A MANY AS 13,778 FUNDAMENTAL EQUITY RESEARCH REPORTS. AS A RESULT OF THE DATA PROBLEM, AN UNDETERMINED BUT SIGNIFICANT NUMBER OF THESE REPORTS INCLUDED A PRICE CHART THAT RETROACTIVELY ADJUSTED THE HISTORICAL STOCK PRICE OF THE COVERED COMPANY TO REFLECT A SUBSEQUENT STOCK SPLIT BUT DID NOT PROVIDE THE SAME RETROACTIVE ADJUSTMENT TO THE HISTORICAL PRICE TARGETS INCLUDED IN THE CHART. AS A RESULT, IMPACTED PRICE CHARTS SHOWED A DISTORTED RELATIONSHIP BETWEEN THE HISTORICAL STOCK PRICES AND THE HISTORICAL PRICE TARGET. THESE ERRORS WERE ALSO REFLECTED ON THE FIRM'S PRICE CHARTS WEBSITE DURING THIS PERIOD. ALTHOUGH THE FIRM'S RESEARCH DEPARTMENT HAD POLICIES, PROCEDURES, AND TESTING PRACTICES (PROCEDURES) WITH RESPECT TO RESEARCH DISCLOSURES AND PRICE CHARTS DURING THE TIME PERIOD OF THE VIOLATIONS, THE PROCEDURES FOCUSED ON THE DOWNSTREAM ASPECTS OF THE RESEARCH REPORT CREATION PROCESS. THE PROCEDURES DID NOT EFFECTIVELY EVALUATE THE ACCURACY OF THE DATA PROVIDED BY INTERNAL AND EXTERNAL DATA SOURCES TO THE RESEARCH DEPARTMENT THROUGH THE RESEARCH DATA REPOSITORY, BUT RATHER WERE INTENDED TO ENSURE THAT THE DATA WAS ACCURATELY AND COMPLETELY REFLECTED ON RESEARCH REPORTS. THE PROCEDURES INCLUDED SEPARATE STEPS FOR RESEARCH ANALYSTS (WHO ASSEMBLED RESEARCH REPORTS), SUPERVISORY ANALYSTS (WHOSE APPROVAL WAS NECESSARY BEFORE A RESEARCH REPORT WAS ISSUED), AND A SUPPORT UNIT CALLED SUPERVISORY ANALYST SUPPORT SERVICES. BECAUSE THE PROCEDURES WERE NOT DESIGNATED TO EVALUATE THE UNDERLYING ACCURACY OF THE DATA FROM INTERNAL AND EXTERNAL DATA SOURCES IN THE RESEARCH DATA REPOSITORY, (CONTINUED IN COMMENTS)
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE IT IS CENSURED AND FINED $325,000. IN DETERMINING THE SANCTIONS IN THIS MATTER, FINRA TOOK INTO CONSIDERATION SEVERAL FACTORS: (1) THE FIRM PROMPTLY SELF-REPORTED ALL OF THE DEFICIENCIES SET FORTH IN THIS AWC: (2) THE FIRM TOOK SIGNIFICANT REMEDIAL ACTION TO PREVENT THE REOCCURRENCE OF THESE DEFICIENCIES: AND (3) IN EARLY 2011, THE FIRM ENGAGED AN INDEPENDENT CONSULTANT FOR A 22 MONTH PERIOD TO ASSIST AN INTERNAL TASK FORCE WITH, AMONG OTHER THINGS, INTRODUCING NEW TECHNOLOGIES AND PROCESSES DESIGNED TO REMEDY THE PROBLEMS THAT HAD BEEN CAUSED BY INACCURATE UPSTREAM DATA.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 09/23/2013 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2011027434101 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): FINRA RULE 2010 AND NASD RULES 2110 AND 2711 AND 2711(I): AS A RESULT OF THE ACQUISITION OF MERRILL LYNCH & CO., INC. BY BANK OF AMERICA CORPORATION, THE RESEARCH DEPARTMENT OF MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (FIRM) WAS REQUIRED TO CONSIDER BOTH ENTITIES' RELATIONSHIP WITH THE COMPANIES THAT WERE THE SUBJECT OF THE RESEARCH REPORT (COVERED COMPANIES) IN DETERMINING WHICH REQUIRED DISCLOSURES TO INCLUDE IN RESEARCH REPORTS ISSUED BY THE FIRM. AS A RESULT OF THE COMPRESSED TIMELINE OF THE ACQUISITION, THE FIRM STILL USED SEPARATE SYSTEMS FROM EACH ENTITY AFTER THE ACQUISITION, AND RESEARCH AND TECHNOLOGY TEAMS FROM THE TWO ENTITIES WERE REQUIRED TO AGGREGATE INFORMATION ABOUT THE TWO ENTITIES' RESPECTIVE RELATIONSHIPS WITH COVERED COMPANIES IN ORDER TO GENERATE COMPLETE AND ACCURATE REQUIRED DISCLOSURES IN RESEARCH REPORTS. HOWEVER, ERRORS OCCURRED IN THIS AGGREGATION PROCESS THAT WAS NOT DISCOVERED BY THE FIRM FOR 18 MONTHS. AN UPSTREAM COMPANY FILE THAT WAS USED TO MATCH COMPANIES COVERED BY THE FIRM'S RESEARCH DEPARTMENT WITH THE COMPANY REVENUES AND CLIENT RELATIONSHIPS INCLUDED INACCURATE DATA, AND THE PROCESS DESIGNED TO UPDATE THAT FILE FAILED. AS A RESULT, THE COMPANY INFORMATION USED BY THE FIRM'S RESEARCH DATA REPOSITORY TO DETERMINE DISCLOSURES WAS STALE AND RESULTED IN THE OMISSION OF REQUIRED DISCLOSURES IN APPROXIMATELY 19,200 RESEARCH REPORTS. AN ADDITIONAL DISCLOSURE DEFICIENCY BEGAN ON AN UNDETERMINED DATE THROUGH OCTOBER 2010, WHEN A THIRD-PARTY VENDOR PROVIDED INCOMPLETE DATA TO THE FIRM RELATED TO 22 COVERED COMPANIES. AS A RESULT OF THE INCOMPLETE DATA, AN UNDETERMINED NUMBER OF RESEARCH REPORTS RELATING TO THE 22 COVERED COMPANIES FAILED TO DISCLOSE WHETHER THE FIRM HAD MANAGED OR CO-MANAGED A PUBLIC OFFERING OF THE COVERED COMPANY'S SECURITIES IN THE PAST 12 MONTHS. THE MISSING DATA WAS DISCOVERED AND CORRECTED, BUT IT HAS NOT BEEN DETERMINED WHEN THE DISCLOSURE DEFICIENCY BEGAN OR HOW MANY RESEARCH REPORTS WERE IMPACTED BY IT. A NEW THIRD-PARTY VENDOR BEGAN PROVIDING THE FIRM WITH STOCK PRICE INFORMATION THAT CONTAINED INCORRECT DATA RELATED TO CERTAIN COVERED COMPANIES THAT HAD BEEN IMPACTED BY A STOCK SPLIT. THE DATA PROBLEM OCCURRED IN EACH MONTHLY FILE THAT THE FIRM RECEIVED FROM THE VENDOR SINCE SEPTEMBER 2008 THROUGH MARCH 2011, AND IMPACTED AS A MANY AS 13,778 FUNDAMENTAL EQUITY RESEARCH REPORTS. AS A RESULT OF THE DATA PROBLEM, AN UNDETERMINED BUT SIGNIFICANT NUMBER OF THESE REPORTS INCLUDED A PRICE CHART THAT RETROACTIVELY ADJUSTED THE HISTORICAL STOCK PRICE OF THE COVERED COMPANY TO REFLECT A SUBSEQUENT STOCK SPLIT BUT DID NOT PROVIDE THE SAME RETROACTIVE ADJUSTMENT TO THE HISTORICAL PRICE TARGETS INCLUDED IN THE CHART. AS A RESULT, IMPACTED PRICE CHARTS SHOWED A DISTORTED RELATIONSHIP BETWEEN THE HISTORICAL STOCK PRICES AND THE HISTORICAL PRICE TARGET. THESE ERRORS WERE ALSO REFLECTED ON THE FIRM'S PRICE CHARTS WEBSITE DURING THIS PERIOD. ALTHOUGH THE FIRM'S RESEARCH DEPARTMENT HAD POLICIES, PROCEDURES, AND TESTING PRACTICES (PROCEDURES) WITH RESPECT TO RESEARCH DISCLOSURES AND PRICE CHARTS DURING THE TIME PERIOD OF THE VIOLATIONS, THE PROCEDURES FOCUSED ON THE DOWNSTREAM ASPECTS OF THE RESEARCH REPORT CREATION PROCESS. THE PROCEDURES DID NOT EFFECTIVELY EVALUATE THE ACCURACY OF THE DATA PROVIDED BY INTERNAL AND EXTERNAL DATA SOURCES TO THE RESEARCH DEPARTMENT THROUGH THE RESEARCH DATA REPOSITORY, BUT RATHER WERE INTENDED TO ENSURE THAT THE DATA WAS ACCURATELY AND COMPLETELY REFLECTED ON RESEARCH REPORTS. THE PROCEDURES INCLUDED SEPARATE STEPS FOR RESEARCH ANALYSTS (WHO ASSEMBLED RESEARCH REPORTS), SUPERVISORY ANALYSTS (WHOSE APPROVAL WAS NECESSARY BEFORE A RESEARCH REPORT WAS ISSUED), AND A SUPPORT UNIT CALLED SUPERVISORY ANALYST SUPPORT SERVICES. BECAUSE THE PROCEDURES WERE NOT DESIGNATED TO EVALUATE THE UNDERLYING ACCURACY OF THE DATA FROM INTERNAL AND EXTERNAL DATA SOURCES IN THE RESEARCH DATA REPOSITORY, (CONTINUED IN COMMENTS) 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 09/23/2013 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 325,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE IT IS CENSURED AND FINED $325,000. IN DETERMINING THE SANCTIONS IN THIS MATTER, FINRA TOOK INTO CONSIDERATION SEVERAL FACTORS: (1) THE FIRM PROMPTLY SELF-REPORTED ALL OF THE DEFICIENCIES SET FORTH IN THIS AWC: (2) THE FIRM TOOK SIGNIFICANT REMEDIAL ACTION TO PREVENT THE REOCCURRENCE OF THESE DEFICIENCIES: AND (3) IN EARLY 2011, THE FIRM ENGAGED AN INDEPENDENT CONSULTANT FOR A 22 MONTH PERIOD TO ASSIST AN INTERNAL TASK FORCE WITH, AMONG OTHER THINGS, INTRODUCING NEW TECHNOLOGIES AND PROCESSES DESIGNED TO REMEDY THE PROBLEMS THAT HAD BEEN CAUSED BY INACCURATE UPSTREAM DATA. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). (CONTINUED FROM ITEM 7.) AND BECAUSE THE DISCLOSURE AND PRICE CHART FAILURES WERE CAUSED BY INACCURACIES IN UNDERLYING DATA, THE PROCEDURES WERE INEFFECTIVE IN IDENTIFYING THE DISCLOSURES AND PRICE CHART DEFICIENCIES. BECAUSE THE PROCEDURES WERE NOT DESIGNATED TO EVALUATE THE UNDERLYING ACCURACY OF THE DATA FROM INTERNAL AND EXTERNAL DATA SOURCES IN THE RESEARCH DATA REPOSITORY, AND BECAUSE THE DISCLOSURE AND PRICE CHART FAILURES WERE CAUSED BY INACCURACIES IN UNDERLYING DATA, THE PROCEDURES WERE INEFFECTIVE IN IDENTIFYING THE DISCLOSURES AND PRICE CHART DEFICIENCIES. THE FIRM ALSO DID NOT HAVE PROCEDURES DESIGNED TO ENSURE THAT THIRD PARTY PRICING INFORMATION USED FOR PRICE CHARTS WAS ACCURATE AS IT RELATED TO CORPORATE ACTIONS AFFECTING THE PRICE OF STOCK AND SUCH ADJUSTED PRICES WERE ACCURATELY REFLECTED ON THE PRICE CHART. WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE IT IS CENSURED AND FINED $325,000. IN DETERMINING THE SANCTIONS IN THIS MATTER, FINRA TOOK INTO CONSIDERATION SEVERAL FACTORS: (1) THE FIRM PROMPTLY SELF-REPORTED ALL OF THE DEFICIENCIES SET FORTH IN THIS AWC: (2) THE FIRM TOOK SIGNIFICANT REMEDIAL ACTION TO PREVENT THE REOCCURRENCE OF THESE DEFICIENCIES: AND (3) IN EARLY 2011, THE FIRM ENGAGED AN INDEPENDENT CONSULTANT FOR A 22 MONTH PERIOD TO ASSIST AN INTERNAL TASK FORCE WITH, AMONG OTHER THINGS, INTRODUCING NEW TECHNOLOGIES AND PROCESSES DESIGNED TO REMEDY THE PROBLEMS THAT HAD BEEN CAUSED BY INACCURATE UPSTREAM DATA.
regulatory · block 48PDF pages 251–253
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 10,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE IT IS CENSURED AND FINED $10,000 ($10,000 OF WHICH PERTAINS TO THE VIOLATION OF MSRB RULE G-34).
Other filed details
Description of allegations — filed text
MSRB RULE G-34: THE FIRM MADE ADJUSTMENTS TO ITS AUCTION RATE SECURITY SYSTEM LOGIC TO CONFORM TO AMENDMENTS TO MSRB RULE G-34 AND G-8. AS A RESULT OF AN ERROR IN THIS PROCESS, THE FIRM BEGAN MISREPORTING TO THE SHORT TERM OBLIGATION RATE TRANSPARENCY SYSTEM (SHORT) THAT INTEREST RATES ASSOCIATED WITH VARIOUS AUCTION RATE SECURITIES (ARS) COMMITTEE ON UNIFORM SECURITY IDENTIFICATION PROCEDURES (CUSIPS) WERE TRIGGERED BY AUCTION RATHER THAN BY RESETS TO THE MAXIMUM INTEREST RATES ASSOCIATED WITH THOSE CUSIPS. OUT OF THE 451 REPORTS THE FIRM MADE TO SHORT, 373 (82.7 PERCENT) ERRONEOUSLY STATED THAT THE INTEREST RATES ASSOCIATED WITH THE CUSIPS BEING REPORTED WERE SET BY AUCTION. IN FACT, NO AUCTION HAD OCCURRED WITH RESPECT TO ANY OF THE 373 CUSIPS THAT WERE THE SUBJECT OF THE ERRONEOUS REPORTS.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE IT IS CENSURED AND FINED $10,000 ($10,000 OF WHICH PERTAINS TO THE VIOLATION OF MSRB RULE G-34).
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 09/26/2013 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2011025580202 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: AUCTION RATE SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): MSRB RULE G-34: THE FIRM MADE ADJUSTMENTS TO ITS AUCTION RATE SECURITY SYSTEM LOGIC TO CONFORM TO AMENDMENTS TO MSRB RULE G-34 AND G-8. AS A RESULT OF AN ERROR IN THIS PROCESS, THE FIRM BEGAN MISREPORTING TO THE SHORT TERM OBLIGATION RATE TRANSPARENCY SYSTEM (SHORT) THAT INTEREST RATES ASSOCIATED WITH VARIOUS AUCTION RATE SECURITIES (ARS) COMMITTEE ON UNIFORM SECURITY IDENTIFICATION PROCEDURES (CUSIPS) WERE TRIGGERED BY AUCTION RATHER THAN BY RESETS TO THE MAXIMUM INTEREST RATES ASSOCIATED WITH THOSE CUSIPS. OUT OF THE 451 REPORTS THE FIRM MADE TO SHORT, 373 (82.7 PERCENT) ERRONEOUSLY STATED THAT THE INTEREST RATES ASSOCIATED WITH THE CUSIPS BEING REPORTED WERE SET BY AUCTION. IN FACT, NO AUCTION HAD OCCURRED WITH RESPECT TO ANY OF THE 373 CUSIPS THAT WERE THE SUBJECT OF THE ERRONEOUS REPORTS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 09/26/2013 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 10,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE IT IS CENSURED AND FINED $10,000 ($10,000 OF WHICH PERTAINS TO THE VIOLATION OF MSRB RULE G-34). 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE IT IS CENSURED AND FINED $10,000 ($10,000 OF WHICH PERTAINS TO THE VIOLATION OF MSRB RULE G-34).
regulatory · block 49PDF pages 253–255
- Regulator name — filed text
- DISTRICT OF COLUMBIA DEPARTMENT OF INSURANCE, SECURITIES AND BANKING (THE "DEPARTMENT")
- Monetary/Fine Amount — filed text
- $ 15,000.00
- How was matter resolved — filed text
- Settled
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE STATEMENT OF FACTS AND CONCLUSIONS OF LAW, THE APPLICANT CONSENTED TO THE ENTRY OF THE ADMINISTRATIVE SETTLEMENT AGREEMENT, PAID $15,000 TO THE DISTRICT OF COLUMBIA'S GENERAL FUND, AND SHALL CEASE AND DESIST FROM VIOLATING 26 DCMR B 119.2 (BB).
Other filed details
Description of allegations — filed text
AN AGENT OF THE APPLICANT FAILED TO FURNISH A CLIENT MATERIAL INFORMATION THAT THE CLIENT WAS ENTITLED TO ON A TIMELY BASIS IN VIOLATION OF 26 DCMR B 119.2(U). AS A RESULT OF THE AGENT'S CONDUCT, THE APPLICANT VIOLATED JUST AND EQUITABLE STANDARDS OF CONDUCT (FINRA RULE 2010), IN VIOLATION OF 26 DCMR B 119.2 (BB).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE STATEMENT OF FACTS AND CONCLUSIONS OF LAW, THE APPLICANT CONSENTED TO THE ENTRY OF THE ADMINISTRATIVE SETTLEMENT AGREEMENT, PAID $15,000 TO THE DISTRICT OF COLUMBIA'S GENERAL FUND, AND SHALL CEASE AND DESIST FROM VIOLATING 26 DCMR B 119.2 (BB).
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) DISTRICT OF COLUMBIA DEPARTMENT OF INSURANCE, SECURITIES AND BANKING (THE "DEPARTMENT") 2. Principal Sanction: Cease and Desist Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 09/10/2013 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: SB-05-13 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): AN AGENT OF THE APPLICANT FAILED TO FURNISH A CLIENT MATERIAL INFORMATION THAT THE CLIENT WAS ENTITLED TO ON A TIMELY BASIS IN VIOLATION OF 26 DCMR B 119.2(U). AS A RESULT OF THE AGENT'S CONDUCT, THE APPLICANT VIOLATED JUST AND EQUITABLE STANDARDS OF CONDUCT (FINRA RULE 2010), IN VIOLATION OF 26 DCMR B 119.2 (BB). 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Settled 11. Resolution Date (MM/DD/YYYY): 09/10/2013 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 15,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: THE APPLICANT ALSO PAID $15,000 TO THE DEPARTMENT TO BE DEPOSITED IN THE DISTRICT OF COLUMBIA'S GENERAL FUND WHICH MAY BE USED TO REIMBURSE THE DEPARTMENT FOR COSTS INCURRED DURING THE INVESTIGATION OF THIS MATTER, FOR SECURITIES AND INVESTOR EDUCATION, AND/OR FOR OTHER SECURITIES AND INVESTOR PROTECTION PURPOSES, AT THE SOLE DISCRETION OF THE COMMISSIONER. Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE STATEMENT OF FACTS AND CONCLUSIONS OF LAW, THE APPLICANT CONSENTED TO THE ENTRY OF THE ADMINISTRATIVE SETTLEMENT AGREEMENT, PAID $15,000 TO THE DISTRICT OF COLUMBIA'S GENERAL FUND, AND SHALL CEASE AND DESIST FROM VIOLATING 26 DCMR B 119.2 (BB). 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE STATEMENT OF FACTS AND CONCLUSIONS OF LAW, THE APPLICANT CONSENTED TO THE ENTRY OF THE ADMINISTRATIVE SETTLEMENT AGREEMENT, PAID $15,000 TO THE DISTRICT OF COLUMBIA'S GENERAL FUND, AND SHALL CEASE AND DESIST FROM VIOLATING 26 DCMR B 119.2 (BB).
regulatory · block 50PDF pages 255–257
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 85,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED, FINED $85,000, REQUIRED TO PAY $77.98, PLUS INTEREST, IN RESTITUTION AND REQUIRED TO REVISE ITS WSPS REGARDING TRADE REPORTING (USE OF TRADE MODIFIERS, THIRD PARTY REPORTING); OATS (ACCURACY OF DATA); AND MULTIPLE MARKET PARTICIPATION IDENTIFIERS (APPROVAL OF MPIDS).
Other filed details
Description of allegations — filed text
SEC RULES 204(A)(1), SEC RULE 200(G) OF REGULATION SHO, SEC RULE 605 OF REGULATION NMS, FINRA RULES 2010, 7230A, 7450, NASD RULES 2110, 3010, 3340, INTERPRETIVE MATERIAL 2110-2 - MERRILL LYNCH EFFECTED SECURITIES TRANSACTIONS WHILE A TRADING HALT WAS IN EFFECT WITH RESPECT TO THE SECURITIES. THE FIRM TRANSMITTED REPORTS TO THE ORDER AUDIT TRAIL SYSTEM (OATS) THAT CONTAINED AN INACCURATE ORIGINATING DEPARTMENT ID, SUBMITTED ERRONEOUS DESK REPORTS, SUBMITTED REPORTS WITH AN INCORRECT SPECIAL HANDLING CODE, ERRONEOUS HANDLING CODES, INCORRECT ORDER RECEIVED TIME, INCORRECT LIMIT PRICE, SUBMITTED REPORTS WITHOUT A REPORTING EXCEPTION CODE, INCORRECTLY SUBMITTED A NEW ORDER REPORT AND ROUTE REPORTS, AND FAILED TO SUBMIT A ROUTE REPORT. THE FIRM MADE AVAILABLE A REPORT ON THE COVERED ORDERS IN NATIONAL MARKET SYSTEM SECURITIES IT RECEIVED FOR EXECUTION FROM ANY PERSON WHICH INCLUDED INCORRECT INFORMATION. THE FIRM INCORRECTLY CLASSIFIED A COVERED ORDER AS NOT COVERED AND CALCULATED AND REPORTED AN INCORRECT AMOUNT OF TOTAL COVERED ORDERS, COVERED SHARES, AND TOTAL CANCELLED SHARES. THE FIRM FAILED TO REPORT TO THE FINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF) THE CORRECT SYMBOL INDICATING THE RELATED MARKET CENTER IN TRANSACTIONS IN REPORTABLE SECURITIES. THE FIRM FAILED TO REPORT THE EXERCISE OF AN OVER-THE-COUNTER (OTC) OPTION. THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS, REGULATIONS AND FINRA RULES ADDRESSING QUALITY OF MARKET TOPICS. THE FIRM'S WRITTEN SUPERVISORY PROCEDURES (WSPS) FAILED TO PROVIDE FOR MINIMUM REQUIREMENTS FOR ADEQUATE WSPS IN TRADE REPORTING (USE OF TRADE MODIFIERS, THIRD PARTY REPORTING); OATS (ACCURACY OF DATA); AND MULTIPLE MARKET PARTICIPANT IDENTIFIERS (APPROVAL OF MPIDS). THE FIRM HAD FAIL-TO-DELIVER POSITIONS AT A REGISTERED CLEARING AGENCY IN AN EQUITY SECURITY THAT RESULTED FROM A LONG SALE, AND DID NOT CLOSE THE FAIL-TO-DELIVER POSITIONS BY PURCHASING SECURITIES OF LIKE KIND AND QUANTITY WITHIN THE TIME FRAME PRESCRIBED BY SEC RULE 204(A)(1). THE FIRM EXECUTED SHORT SALE ORDERS AND FAILED TO PROPERLY MARK THE ORDERS AS SHORT. THE FIRM FAILED TO CONTEMPORANEOUSLY OR PARTIALLY EXECUTE CUSTOMER LIMIT ORDERS IN A NASDAQ SECURITY AFTER IT TRADED EACH SUBJECT ORDER FOR ITS OWN MARKET-MAKING ACCOUNT AT A PRICE THAT WOULD HAVE SATISFIED EACH CUSTOMER'S LIMIT ORDER. THE FIRM FAILED TO REPORT COMPLETE AND ACCURATE DATA TO THE FNTRF IN TRANSACTIONS IN REPORTABLE SECURITIES. THE FIRM INCORRECTLY REPORTED AN AGENCY CROSS TRANSACTION AS A PRINCIPAL TRANSACTION WITH A BLANK CONTRA PARTY; FAILED TO REPORT THE CONTRA PARTY BROKER-DEALER ON PRINCIPAL TRADES; REPORTED AN INCORRECT BUY/SELL INDICATOR; FAILED TO REPORT THE CORRECT EXECUTION TIME; AND FAILED TO TIMELY SUBMIT NON-TAPE REPORTS WITH THE .RX MODIFIER.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED, FINED $85,000, REQUIRED TO PAY $77.98, PLUS INTEREST, IN RESTITUTION AND REQUIRED TO REVISE ITS WSPS REGARDING TRADE REPORTING (USE OF TRADE MODIFIERS, THIRD PARTY REPORTING); OATS (ACCURACY OF DATA); AND MULTIPLE MARKET PARTICIPATION IDENTIFIERS (APPROVAL OF MPIDS) WITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BY THE NAC. A REGISTERED FIRM PRINCIPAL SHALL SUBMIT SATISFACTORY PROOF OF PAYMENT OF THE RESTITUTION, OR OF REASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECT RESTITUTION TO FINRA NO LATER THAN 120 DAYS AFTER ACCEPTANCE OF THIS AWC. ANY UNDISTRIBUTED RESTITUTION AND INTEREST SHALL BE FORWARDED TO THE APPROPRIATE ESCHEAT, UNCLAIMED PROPERTY OR ABANDONED PROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER LAST RESIDED.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; RESTITUTION; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 10/24/2013 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2009020108201 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Options Other Product Types: NATIONAL MARKET SYSTEM SECURITIES, REPORTABLE SECURITIES, EQUITY SECURITIES, NASDAQ SECURITY 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): SEC RULES 204(A)(1), SEC RULE 200(G) OF REGULATION SHO, SEC RULE 605 OF REGULATION NMS, FINRA RULES 2010, 7230A, 7450, NASD RULES 2110, 3010, 3340, INTERPRETIVE MATERIAL 2110-2 - MERRILL LYNCH EFFECTED SECURITIES TRANSACTIONS WHILE A TRADING HALT WAS IN EFFECT WITH RESPECT TO THE SECURITIES. THE FIRM TRANSMITTED REPORTS TO THE ORDER AUDIT TRAIL SYSTEM (OATS) THAT CONTAINED AN INACCURATE ORIGINATING DEPARTMENT ID, SUBMITTED ERRONEOUS DESK REPORTS, SUBMITTED REPORTS WITH AN INCORRECT SPECIAL HANDLING CODE, ERRONEOUS HANDLING CODES, INCORRECT ORDER RECEIVED TIME, INCORRECT LIMIT PRICE, SUBMITTED REPORTS WITHOUT A REPORTING EXCEPTION CODE, INCORRECTLY SUBMITTED A NEW ORDER REPORT AND ROUTE REPORTS, AND FAILED TO SUBMIT A ROUTE REPORT. THE FIRM MADE AVAILABLE A REPORT ON THE COVERED ORDERS IN NATIONAL MARKET SYSTEM SECURITIES IT RECEIVED FOR EXECUTION FROM ANY PERSON WHICH INCLUDED INCORRECT INFORMATION. THE FIRM INCORRECTLY CLASSIFIED A COVERED ORDER AS NOT COVERED AND CALCULATED AND REPORTED AN INCORRECT AMOUNT OF TOTAL COVERED ORDERS, COVERED SHARES, AND TOTAL CANCELLED SHARES. THE FIRM FAILED TO REPORT TO THE FINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF) THE CORRECT SYMBOL INDICATING THE RELATED MARKET CENTER IN TRANSACTIONS IN REPORTABLE SECURITIES. THE FIRM FAILED TO REPORT THE EXERCISE OF AN OVER-THE-COUNTER (OTC) OPTION. THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS, REGULATIONS AND FINRA RULES ADDRESSING QUALITY OF MARKET TOPICS. THE FIRM'S WRITTEN SUPERVISORY PROCEDURES (WSPS) FAILED TO PROVIDE FOR MINIMUM REQUIREMENTS FOR ADEQUATE WSPS IN TRADE REPORTING (USE OF TRADE MODIFIERS, THIRD PARTY REPORTING); OATS (ACCURACY OF DATA); AND MULTIPLE MARKET PARTICIPANT IDENTIFIERS (APPROVAL OF MPIDS). THE FIRM HAD FAIL-TO-DELIVER POSITIONS AT A REGISTERED CLEARING AGENCY IN AN EQUITY SECURITY THAT RESULTED FROM A LONG SALE, AND DID NOT CLOSE THE FAIL-TO-DELIVER POSITIONS BY PURCHASING SECURITIES OF LIKE KIND AND QUANTITY WITHIN THE TIME FRAME PRESCRIBED BY SEC RULE 204(A)(1). THE FIRM EXECUTED SHORT SALE ORDERS AND FAILED TO PROPERLY MARK THE ORDERS AS SHORT. THE FIRM FAILED TO CONTEMPORANEOUSLY OR PARTIALLY EXECUTE CUSTOMER LIMIT ORDERS IN A NASDAQ SECURITY AFTER IT TRADED EACH SUBJECT ORDER FOR ITS OWN MARKET-MAKING ACCOUNT AT A PRICE THAT WOULD HAVE SATISFIED EACH CUSTOMER'S LIMIT ORDER. THE FIRM FAILED TO REPORT COMPLETE AND ACCURATE DATA TO THE FNTRF IN TRANSACTIONS IN REPORTABLE SECURITIES. THE FIRM INCORRECTLY REPORTED AN AGENCY CROSS TRANSACTION AS A PRINCIPAL TRANSACTION WITH A BLANK CONTRA PARTY; FAILED TO REPORT THE CONTRA PARTY BROKER-DEALER ON PRINCIPAL TRADES; REPORTED AN INCORRECT BUY/SELL INDICATOR; FAILED TO REPORT THE CORRECT EXECUTION TIME; AND FAILED TO TIMELY SUBMIT NON-TAPE REPORTS WITH THE .RX MODIFIER. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 10/24/2013 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 85,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED, FINED $85,000, REQUIRED TO PAY $77.98, PLUS INTEREST, IN RESTITUTION AND REQUIRED TO REVISE ITS WSPS REGARDING TRADE REPORTING (USE OF TRADE MODIFIERS, THIRD PARTY REPORTING); OATS (ACCURACY OF DATA); AND MULTIPLE MARKET PARTICIPATION IDENTIFIERS (APPROVAL OF MPIDS) WITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BY THE NAC. A REGISTERED FIRM PRINCIPAL SHALL SUBMIT SATISFACTORY PROOF OF PAYMENT OF THE RESTITUTION, OR OF REASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECT RESTITUTION TO FINRA NO LATER THAN 120 DAYS AFTER ACCEPTANCE OF THIS AWC. ANY UNDISTRIBUTED RESTITUTION AND INTEREST SHALL BE FORWARDED TO THE APPROPRIATE ESCHEAT, UNCLAIMED PROPERTY OR ABANDONED PROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER LAST RESIDED. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED, FINED $85,000, REQUIRED TO PAY $77.98, PLUS INTEREST, IN RESTITUTION AND REQUIRED TO REVISE ITS WSPS REGARDING TRADE REPORTING (USE OF TRADE MODIFIERS, THIRD PARTY REPORTING); OATS (ACCURACY OF DATA); AND MULTIPLE MARKET PARTICIPATION IDENTIFIERS (APPROVAL OF MPIDS).
regulatory · block 51PDF pages 257–259
- Regulator name — filed text
- MASSACHUSETTS SECURITIES DIVISION
- Monetary/Fine Amount — filed text
- $ 500,000.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGED VIOLATIONS OF LAW, THE APPLICANT CONSENTED TO THE ENTRY OF A CONSENT ORDER, PAID A CIVIL PENALTY OF $500,000, AGREED TO OFFER REIMBURSEMENT TO FIVE CURRENT OR FORMER CLIENTS, AGREED TO CERTIFY THAT IT HAS REVIEWED ITS POLICIES AND PROCEDURES WITH REGARD TO THE MONITORING OF EMPLOYEE ACCOUNTS, AGREED TO A CENSURE, AND AGREED TO CEASE AND DESIST FROM VIOLATING M.G.L. C. 110A, §204(A)(2)(J).
Other filed details
Description of allegations — filed text
THE MASSACHUSETTS SECURITIES DIVISION ALLEGES THAT THE APPLICANT FAILED TO REASONABLY SUPERVISE A FORMER AGENT IN VIOLATION OF M.G.L. C. 110A, §204(A)(2)(J).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGED VIOLATIONS OF LAW, THE APPLICANT CONSENTED TO THE ENTRY OF A CONSENT ORDER, PAID A CIVIL PENALTY OF $500,000, AGREED TO OFFER REIMBURSEMENT TO FIVE CURRENT OR FORMER CLIENTS, AGREED TO CERTIFY THAT IT HAS REVIEWED ITS POLICIES AND PROCEDURES WITH REGARD TO THE MONITORING OF EMPLOYEE ACCOUNTS, AGREED TO A CENSURE, AND AGREED TO CEASE AND DESIST FROM VIOLATING M.G.L. C. 110A, §204(A)(2)(J).
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) MASSACHUSETTS SECURITIES DIVISION 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CEASE AND DESIST; CENSURE; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 10/30/2013 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2012-0113 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE MASSACHUSETTS SECURITIES DIVISION ALLEGES THAT THE APPLICANT FAILED TO REASONABLY SUPERVISE A FORMER AGENT IN VIOLATION OF M.G.L. C. 110A, §204(A)(2)(J). 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Order 11. Resolution Date (MM/DD/YYYY): 10/30/2013 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 500,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKINGS Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE ALLEGED VIOLATIONS OF LAW, THE APPLICANT CONSENTED TO THE ENTRY OF A CONSENT ORDER, PAID A CIVIL PENALTY OF $500,000, AGREED TO OFFER REIMBURSEMENT TO FIVE CURRENT OR FORMER CLIENTS, AGREED TO CERTIFY THAT IT HAS REVIEWED ITS POLICIES AND PROCEDURES WITH REGARD TO THE MONITORING OF EMPLOYEE ACCOUNTS, AGREED TO A CENSURE, AND AGREED TO CEASE AND DESIST FROM VIOLATING M.G.L. C. 110A, §204(A)(2)(J). 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE ALLEGED VIOLATIONS OF LAW, THE APPLICANT CONSENTED TO THE ENTRY OF A CONSENT ORDER, PAID A CIVIL PENALTY OF $500,000, AGREED TO OFFER REIMBURSEMENT TO FIVE CURRENT OR FORMER CLIENTS, AGREED TO CERTIFY THAT IT HAS REVIEWED ITS POLICIES AND PROCEDURES WITH REGARD TO THE MONITORING OF EMPLOYEE ACCOUNTS, AGREED TO A CENSURE, AND AGREED TO CEASE AND DESIST FROM VIOLATING M.G.L. C. 110A, §204(A)(2)(J).
regulatory · block 52PDF pages 259–260
- Regulator name — filed text
- CHICAGO BOARD OF TRADE BUSINESS CONDUCT COMMITTEE
- Monetary/Fine Amount — filed text
- $ 190,000.00
- How was matter resolved — filed text
- Decision
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE RULE VIOLATIONS, THE APPLICANT CONSENTED TO THE ENTRY OF THE CBOT'S DECISION AND AGREED TO PAY A FINE OF $190,000.
Other filed details
Description of allegations — filed text
BETWEEN JUNE 5, 2009 AND MAY 17, 2012, APPLICANT EXECUTED BLOCK TRADES FOR CUSTOMERS IN CBOT INTEREST RATE FUTURES CONTRACTS THAT WERE NOT REPORTED TO THE CHICAGO BOARD OF TRADE ("CBOT") WITHIN THE APPLICABLE TIME LIMIT FOLLOWING EXECUTION. IN ADDITION, APPLICANT MISREPRESENTED THE TRUE AND ACCURATE TIME OF EXECUTION OF BLOCK TRADES TO THE CBOT THEREBY VIOLATING LEGACY CBOT RULES 526.F AND 432.I. FURTHER, APPLICANT FAILED TO MAINTAIN ACCURATE WRITTEN OR ELECTRONIC RECORDS OF THE BLOCK TRADE TRANSACTIONS (SPECIFICALLY, THE ORDER TICKETS AND OTHER RECORDS APPLICANT EMPLOYED TO RECORD BLOCK TRADES CONTAINED INACCURATE TIMING INFORMATION) AND DID NOT HAVE ACCURATE AND RELIABLE TIME-KEEPING MECHANISMS IN PLACE UPON WHICH TO BASE THE TIME OF EXECUTION IN VIOLATION OF CBOT RULE 536. BY FAILING TO DILIGENTLY SUPERVISE ITS EMPLOYEES OR AGENTS IN THE CONDUCT OF APPLICANT'S BUSINESS RELATING TO THE CBOT AS OUTLINED ABOVE, THE APPLICANT VIOLATED LEGACY CBOT RULE 432.W.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE RULE VIOLATIONS, THE APPLICANT CONSENTED TO THE ENTRY OF THE CBOT'S DECISION AND AGREED TO PAY A FINE OF $190,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
CHICAGO BOARD OF TRADE BUSINESS CONDUCT COMMITTEE
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
3.
Date Initiated (MM/DD/YYYY):
10/24/2013
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
CBOT 09-06299-BC AND CBOT 10-7427-BC
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
BETWEEN JUNE 5, 2009 AND MAY 17, 2012, APPLICANT EXECUTED BLOCK TRADES FOR CUSTOMERS IN CBOT INTEREST RATE FUTURES CONTRACTS
THAT WERE NOT REPORTED TO THE CHICAGO BOARD OF TRADE ("CBOT") WITHIN THE APPLICABLE TIME LIMIT FOLLOWING EXECUTION. IN ADDITION,
APPLICANT MISREPRESENTED THE TRUE AND ACCURATE TIME OF EXECUTION OF BLOCK TRADES TO THE CBOT THEREBY VIOLATING LEGACY CBOT
RULES 526.F AND 432.I. FURTHER, APPLICANT FAILED TO MAINTAIN ACCURATE WRITTEN OR ELECTRONIC RECORDS OF THE BLOCK TRADE
TRANSACTIONS (SPECIFICALLY, THE ORDER TICKETS AND OTHER RECORDS APPLICANT EMPLOYED TO RECORD BLOCK TRADES CONTAINED
INACCURATE TIMING INFORMATION) AND DID NOT HAVE ACCURATE AND RELIABLE TIME-KEEPING MECHANISMS IN PLACE UPON WHICH TO BASE THE
TIME OF EXECUTION IN VIOLATION OF CBOT RULE 536. BY FAILING TO DILIGENTLY SUPERVISE ITS EMPLOYEES OR AGENTS IN THE CONDUCT OF
APPLICANT'S BUSINESS RELATING TO THE CBOT AS OUTLINED ABOVE, THE APPLICANT VIOLATED LEGACY CBOT RULE 432.W.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Decision
11. Resolution Date (MM/DD/YYYY):
10/24/2013
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 190,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE RULE VIOLATIONS, THE APPLICANT CONSENTED TO THE ENTRY OF THE CBOT'S DECISION AND AGREED TO
PAY A FINE OF $190,000.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE RULE VIOLATIONS, THE APPLICANT CONSENTED TO THE ENTRY OF THE CBOT'S DECISION AND AGREED TO PAY A
FINE OF $190,000.regulatory · block 53PDF pages 260–262
- Regulator name — filed text
- CHICAGO MERCANTILE EXCHANGE BUSINESS CONDUCT COMMITTEE
- Monetary/Fine Amount — filed text
- $ 60,000.00
- How was matter resolved — filed text
- Decision
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE RULE VIOLATIONS, THE APPLICANT CONSENTED TO THE ENTRY OF THE CME'S DECISION AND AGREED TO PAY A FINE OF $60,000.
Other filed details
Description of allegations — filed text
BETWEEN JUNE 4, 2009 AND AUGUST 8, 2011, APPLICANT EXECUTED BLOCK TRADES FOR CUSTOMERS IN THE EURODOLLARS FUTURES MARKET THAT WERE NOT REPORTED TO THE CHICAGO MERCANTILE EXCHANGE ("CME") WITHIN THE APPLICABLE TIME LIMIT FOLLOWING EXECUTION. IN ADDITION, APPLICANT MISREPRESENTED THE TRUE AND ACCURATE TIME OF EXECUTION OF BLOCK TRADES TO THE CME THEREBY VIOLATING LEGACY CME RULES 526.F AND 432.I. FURTHER, APPLICANT FAILED TO MAINTAIN ACCURATE WRITTEN OR ELECTRONIC RECORDS OF THE BLOCK TRADE TRANSACTIONS (SPECIFICALLY, THE ORDER TICKETS AND OTHER RECORDS APPLICANT EMPLOYED TO RECORD BLOCK TRADES CONTAINED INACCURATE TIMING INFORMATION) AND DID NOT HAVE ACCURATE AND RELIABLE TIME-KEEPING MECHANISMS IN PLACE UPON WHICH TO BASE THE TIME OF EXECUTION IN VIOLATION OF CME RULE 536. BY FAILING TO DILIGENTLY SUPERVISE ITS EMPLOYEES OR AGENTS IN THE CONDUCT OF THE APPLICANT'S BUSINESS RELATING TO THE CME AS OUTLINED ABOVE, THE APPLICANT VIOLATED LEGACY CME RULE 432.W.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE RULE VIOLATIONS, THE APPLICANT CONSENTED TO THE ENTRY OF THE CME'S DECISION AND AGREED TO PAY A FINE OF $60,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
CHICAGO MERCANTILE EXCHANGE BUSINESS CONDUCT COMMITTEE
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
3.
Date Initiated (MM/DD/YYYY):
10/24/2013
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
CME 10-7427-BC
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
BETWEEN JUNE 4, 2009 AND AUGUST 8, 2011, APPLICANT EXECUTED BLOCK TRADES FOR CUSTOMERS IN THE EURODOLLARS FUTURES MARKET THAT
WERE NOT REPORTED TO THE CHICAGO MERCANTILE EXCHANGE ("CME") WITHIN THE APPLICABLE TIME LIMIT FOLLOWING EXECUTION. IN ADDITION,
APPLICANT MISREPRESENTED THE TRUE AND ACCURATE TIME OF EXECUTION OF BLOCK TRADES TO THE CME THEREBY VIOLATING LEGACY CME RULES
526.F AND 432.I. FURTHER, APPLICANT FAILED TO MAINTAIN ACCURATE WRITTEN OR ELECTRONIC RECORDS OF THE BLOCK TRADE TRANSACTIONS
(SPECIFICALLY, THE ORDER TICKETS AND OTHER RECORDS APPLICANT EMPLOYED TO RECORD BLOCK TRADES CONTAINED INACCURATE TIMING
INFORMATION) AND DID NOT HAVE ACCURATE AND RELIABLE TIME-KEEPING MECHANISMS IN PLACE UPON WHICH TO BASE THE TIME OF EXECUTION IN
VIOLATION OF CME RULE 536. BY FAILING TO DILIGENTLY SUPERVISE ITS EMPLOYEES OR AGENTS IN THE CONDUCT OF THE APPLICANT'S BUSINESS
RELATING TO THE CME AS OUTLINED ABOVE, THE APPLICANT VIOLATED LEGACY CME RULE 432.W.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Decision
11. Resolution Date (MM/DD/YYYY):
10/24/2013
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 60,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE RULE VIOLATIONS, THE APPLICANT CONSENTED TO THE ENTRY OF THE CME'S DECISION AND AGREED TO
PAY A FINE OF $60,000.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE RULE VIOLATIONS, THE APPLICANT CONSENTED TO THE ENTRY OF THE CME'S DECISION AND AGREED TO PAY A
FINE OF $60,000.regulatory · block 54PDF pages 262–264
- Regulator name — filed text
- NASDAQ STOCK MARKET
- Monetary/Fine Amount — filed text
- $ 12,500.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $12,500.
Other filed details
Description of allegations — filed text
NASDAQ RULES 4611(A)(6), 4755 - MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ENTERED PROPRIETARY ORDERS TO SELL SHORT INTO THE NASDAQ MARKET CENTER THAT INCORRECTLY IDENTIFIED THE ORDERS AS LONG. THE FIRM ENTERED ONE PROPRIETARY ORDER TO SELL LONG INTO THE NASDAQ MARKET CENTER THAT INCORRECTLY IDENTIFIED THE ORDER AS SHORT. THE FIRM ENTERED ORDERS INTO THE NASDAQ MARKET CENTER THAT FAILED TO INDICATE THE CORRECT CAPACITY.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $12,500.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) NASDAQ STOCK MARKET 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 11/18/2013 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2009016999902 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: NASDAQ SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): NASDAQ RULES 4611(A)(6), 4755 - MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ENTERED PROPRIETARY ORDERS TO SELL SHORT INTO THE NASDAQ MARKET CENTER THAT INCORRECTLY IDENTIFIED THE ORDERS AS LONG. THE FIRM ENTERED ONE PROPRIETARY ORDER TO SELL LONG INTO THE NASDAQ MARKET CENTER THAT INCORRECTLY IDENTIFIED THE ORDER AS SHORT. THE FIRM ENTERED ORDERS INTO THE NASDAQ MARKET CENTER THAT FAILED TO INDICATE THE CORRECT CAPACITY. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 11/18/2013 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 12,500.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $12,500. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $12,500.
regulatory · block 55PDF pages 264–266
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 35,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $35,000.
Other filed details
Description of allegations — filed text
SEC RULES 200(G) OF REGULATION SHO, 605 OF REGULATION NMS, FINRA RULES 6182, 6624, 7450 - MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED EXECUTED SHORT SALE TRANSACTIONS FOR WHICH IT FAILED TO REPORT EACH OF THESE TRANSACTIONS TO THE FINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF) WITH THE CORRECT SYMBOLS INDICATING THAT THE TRANSACTIONS WERE SELL SHORT. THE FIRM EXECUTED LONG SALE TRANSACTIONS FOR WHICH IT FAILED TO REPORT EACH OF THESE TRANSACTIONS TO THE OVER-THECOUNTER (OTC) REPORTING FACILITY WITH THE CORRECT SYMBOLS INDICATING THAT THE TRANSACTIONS WERE PROPRIETARY LONG SALES. THE FIRM TRANSMITTED REPORTS TO THE ORDER AUDIT TRAIL SYSTEM (OATS) THAT INCORRECTLY SUBMITTED A SPECIAL HANDLING CODE; SUBMITTED AN ERRONEOUS DESK REPORT; INCORRECTLY SUBMITTED A CUSTOMER INSTRUCTION FLAG; INCORRECTLY SUBMITTED A DESK REPORT AND FAILED TO SUBMIT A NEW ORDER REPORT; INCORRECTLY SUBMITTED AN EXECUTION TO REFLECT THE EXECUTION OF AN ORDER; FAILED TO SUBMIT OATS DATA FOR AN ORDER; AND FAILED TO SUBMIT ROUTING REPORTS TO OATS TO REFLECT THE ROUTE OF THE ORDER TO OUTSIDE MARKET CENTERS. THE FIRM INCORRECTLY CLASSIFIED AN ORDER AS COVERED FOR PURPOSES OF SEC RULE 605 ORDER EXECUTION DISCLOSURE. FOR ONE MONTH, THE FIRM MADE AVAILABLE A REPORT ON THE COVERED ORDERS IN NATIONAL MARKET SYSTEM SECURITIES IT RECEIVED FOR EXECUTION FROM ANY PERSON WHICH INCLUDED INCORRECT INFORMATION AS TO THE AMOUNT OF MARKET CENTER EXECUTED SHARES AND AWAY EXECUTED SHARES FOR VARIOUS ORDER TYPE/SIZE CATEGORIES. THE FIRM'S REPORT ERRONEOUSLY STATED THAT ALL OF THE SHARES WERE EXECUTED AT THE MARKET CENTER BY THE FIRM, WHEN THEY WERE IN FACT EXECUTED BY AN OUTSIDE MARKET CENTER. THE FIRM EXECUTED SHORT SALE ORDERS AND FAILED TO PROPERLY MARK THE ORDERS AS SHORT AND EXECUTED ONE LONG SALE ORDER AND FAILED TO PROPERLY MARK THE ORDER AS LONG.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $35,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 11/18/2013 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2009016999901 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Equity - OTC Other Product Types: UNSPECIFIED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): SEC RULES 200(G) OF REGULATION SHO, 605 OF REGULATION NMS, FINRA RULES 6182, 6624, 7450 - MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED EXECUTED SHORT SALE TRANSACTIONS FOR WHICH IT FAILED TO REPORT EACH OF THESE TRANSACTIONS TO THE FINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF) WITH THE CORRECT SYMBOLS INDICATING THAT THE TRANSACTIONS WERE SELL SHORT. THE FIRM EXECUTED LONG SALE TRANSACTIONS FOR WHICH IT FAILED TO REPORT EACH OF THESE TRANSACTIONS TO THE OVER-THECOUNTER (OTC) REPORTING FACILITY WITH THE CORRECT SYMBOLS INDICATING THAT THE TRANSACTIONS WERE PROPRIETARY LONG SALES. THE FIRM TRANSMITTED REPORTS TO THE ORDER AUDIT TRAIL SYSTEM (OATS) THAT INCORRECTLY SUBMITTED A SPECIAL HANDLING CODE; SUBMITTED AN ERRONEOUS DESK REPORT; INCORRECTLY SUBMITTED A CUSTOMER INSTRUCTION FLAG; INCORRECTLY SUBMITTED A DESK REPORT AND FAILED TO SUBMIT A NEW ORDER REPORT; INCORRECTLY SUBMITTED AN EXECUTION TO REFLECT THE EXECUTION OF AN ORDER; FAILED TO SUBMIT OATS DATA FOR AN ORDER; AND FAILED TO SUBMIT ROUTING REPORTS TO OATS TO REFLECT THE ROUTE OF THE ORDER TO OUTSIDE MARKET CENTERS. THE FIRM INCORRECTLY CLASSIFIED AN ORDER AS COVERED FOR PURPOSES OF SEC RULE 605 ORDER EXECUTION DISCLOSURE. FOR ONE MONTH, THE FIRM MADE AVAILABLE A REPORT ON THE COVERED ORDERS IN NATIONAL MARKET SYSTEM SECURITIES IT RECEIVED FOR EXECUTION FROM ANY PERSON WHICH INCLUDED INCORRECT INFORMATION AS TO THE AMOUNT OF MARKET CENTER EXECUTED SHARES AND AWAY EXECUTED SHARES FOR VARIOUS ORDER TYPE/SIZE CATEGORIES. THE FIRM'S REPORT ERRONEOUSLY STATED THAT ALL OF THE SHARES WERE EXECUTED AT THE MARKET CENTER BY THE FIRM, WHEN THEY WERE IN FACT EXECUTED BY AN OUTSIDE MARKET CENTER. THE FIRM EXECUTED SHORT SALE ORDERS AND FAILED TO PROPERLY MARK THE ORDERS AS SHORT AND EXECUTED ONE LONG SALE ORDER AND FAILED TO PROPERLY MARK THE ORDER AS LONG. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 11/18/2013 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 35,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $35,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $35,000.
regulatory · block 56PDF pages 266–268
- Regulator name — filed text
- U.S. SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 56,286,000.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
ON DECEMBER 12, 2013, THE SEC ISSUED THE ORDER, AND INCLUDED THE ALLEGATIONS DESCRIBED ABOVE IN ITEM 7. MERRILL LYNCH AGREED TO CONSENT TO THE ENTRY OF THE ORDER, WITHOUT ADMITTING OR DENYING THE FINDINGS CONTAINED THEREIN (OTHER THAN THOSE RELATING TO JURISDICTION AND THE SUBJECT MATTER OF THE PROCEEDINGS). THE PAYMENT WAS MADE ON DECEMBER 17, 2013. THE SANCTIONS IMPOSED ARE EXPLAINED ABOVE IN ITEM 12.C.
Other filed details
Description of allegations — filed text
PURSUANT TO AN OFFER OF SETTLEMENT MADE BY MERRILL LYNCH, FENNER, PIERCE & SMITH INCORPORATED ("MERRILL LYNCH"), ON DECEMBER 12, 2013 THE SEC ISSUED AN ORDER ("ORDER") STATING THAT MERRILL LYNCH VIOLATED THE FEDERAL SECURITIES LAWS IN CONNECTION WITH ITS STRUCTURING AND MARKETING OF A SERIES OF COLLATERALIZED DEBT OBLIGATION TRANSACTIONS ("CDOS") IN 2006 AND 2007. ACCORDING TO THE ORDER, MERRILL LYNCH FAILED TO INFORM INVESTORS IN TWO CDOS THAT A HEDGE FUND FIRM THAT BOUGHT THE EQUITY IN THE TRANSACTIONS BUT WHOSE INTERESTS WERE NOT NECESSARILY THE SAME AS THOSE OF THE CDOS' OTHER INVESTORS, HAD UNDISCLOSED RIGHTS RELATING TO, AND EXERCISED SIGNIFICANT INFLUENCE OVER, THE SELECTION OF THE CDOS' COLLATERAL. THE ORDER STATED THAT, AS A RESULT OF ITS CONDUCT, MERRILL LYNCH VIOLATED SECTIONS 17(A)(2) AND 17(A)(3) OF THE SECURITIES ACT OF 1933 ("SECURITIES ACT") AND SECTION 17(A)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND RULE 17A-3(A)(2) THEREUNDER. MERRILL LYNCH CONSENTED TO THE ENTRY OF THE ORDER WITHOUT ADMITTING OR DENYING THE FINDINGS THEREIN. THE ORDER IS NOT BINDING ON ANY PERSON OR ENTITY OTHER THAN MERRILL LYNCH.
Sanction detail — filed text
THE ORDER (1) REQUIRED THAT MERRILL LYNCH CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 17(A)(2) AND 17(A)(3) OF THE SECURITIES ACT AND SECTION 17(A)(1) OF THE EXCHANGE ACT AND RULE 17A-3(A)(2) THEREUNDER; (2) CENSURED MERRILL LYNCH; AND (3) REQUIRED THAT MERRILL LYNCH PAY DISGORGEMENT OF $56,286,000 AND PREJUDGMENT INTEREST OF $19,228,027 AND A CIVIL MONEY PENALTY IN THE AMOUNT OF $56,286,000 (FOR A TOTAL PAYMENT OF $131,800,027). THE PAYMENT WAS MADE ON DECEMBER 17, 2013.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
U.S. SECURITIES AND EXCHANGE COMMISSION
2.
Principal Sanction:
Cease and Desist
Other Sanctions:
CENSURE; DISGORGEMENT; PREJUDGMENT INTEREST; CIVIL MONEY PENALTY
3.
Date Initiated (MM/DD/YYYY):
12/12/2013
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
3-15642
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
COLLATERALIZED DEBT OBLIGATION TRANSACTIONS ("CDOS")
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
PURSUANT TO AN OFFER OF SETTLEMENT MADE BY MERRILL LYNCH, FENNER, PIERCE & SMITH INCORPORATED ("MERRILL LYNCH"), ON DECEMBER 12,
2013 THE SEC ISSUED AN ORDER ("ORDER") STATING THAT MERRILL LYNCH VIOLATED THE FEDERAL SECURITIES LAWS IN CONNECTION WITH ITS
STRUCTURING AND MARKETING OF A SERIES OF COLLATERALIZED DEBT OBLIGATION TRANSACTIONS ("CDOS") IN 2006 AND 2007. ACCORDING TO THE
ORDER, MERRILL LYNCH FAILED TO INFORM INVESTORS IN TWO CDOS THAT A HEDGE FUND FIRM THAT BOUGHT THE EQUITY IN THE TRANSACTIONS BUT
WHOSE INTERESTS WERE NOT NECESSARILY THE SAME AS THOSE OF THE CDOS' OTHER INVESTORS, HAD UNDISCLOSED RIGHTS RELATING TO, AND
EXERCISED SIGNIFICANT INFLUENCE OVER, THE SELECTION OF THE CDOS' COLLATERAL. THE ORDER STATED THAT, AS A RESULT OF ITS CONDUCT,
MERRILL LYNCH VIOLATED SECTIONS 17(A)(2) AND 17(A)(3) OF THE SECURITIES ACT OF 1933 ("SECURITIES ACT") AND SECTION 17(A)(1) OF THE
SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND RULE 17A-3(A)(2) THEREUNDER. MERRILL LYNCH CONSENTED TO THE ENTRY OF THE
ORDER WITHOUT ADMITTING OR DENYING THE FINDINGS THEREIN. THE ORDER IS NOT BINDING ON ANY PERSON OR ENTITY OTHER THAN MERRILL
LYNCH.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Order
11. Resolution Date (MM/DD/YYYY):
12/12/2013
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 56,286,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
PREJUDGMENT INTEREST OF $19,228,027. DISGORGEMENT OF $56,286,000.
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE ORDER (1) REQUIRED THAT MERRILL LYNCH CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE
VIOLATIONS OF SECTIONS 17(A)(2) AND 17(A)(3) OF THE SECURITIES ACT AND SECTION 17(A)(1) OF THE EXCHANGE ACT AND RULE 17A-3(A)(2)
THEREUNDER; (2) CENSURED MERRILL LYNCH; AND (3) REQUIRED THAT MERRILL LYNCH PAY DISGORGEMENT OF $56,286,000 AND PREJUDGMENT
INTEREST OF $19,228,027 AND A CIVIL MONEY PENALTY IN THE AMOUNT OF $56,286,000 (FOR A TOTAL PAYMENT OF $131,800,027). THE
PAYMENT WAS MADE ON DECEMBER 17, 2013.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
ON DECEMBER 12, 2013, THE SEC ISSUED THE ORDER, AND INCLUDED THE ALLEGATIONS DESCRIBED ABOVE IN ITEM 7. MERRILL LYNCH AGREED TO
CONSENT TO THE ENTRY OF THE ORDER, WITHOUT ADMITTING OR DENYING THE FINDINGS CONTAINED THEREIN (OTHER THAN THOSE RELATING TO
JURISDICTION AND THE SUBJECT MATTER OF THE PROCEEDINGS). THE PAYMENT WAS MADE ON DECEMBER 17, 2013. THE SANCTIONS IMPOSED ARE
EXPLAINED ABOVE IN ITEM 12.C.regulatory · block 57PDF pages 268–270
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 45,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $45,000.
Other filed details
Description of allegations — filed text
SEC RULE 17A-3, NASD RULE 3110 - MERRILL LYNCH, PIERCE, FENNER & SMITH'S ORDER MEMORANDUM FOR NUMEROUS TRANSACTIONS REFLECTED ONLY ONE ORDER TIME. THE FIRM MAINTAINED THAT THE TIME STAMP REPRESENTED MULTIPLE ORDER TIMES (I.E., THE ORDER RECEIPT, ORDER ENTRY AND ORDER EXECUTION TIMES) BECAUSE THE DECISION TO PURCHASE THE SECURITY, AND THE RESULTANT EXECUTION, HAPPENED SIMULTANEOUSLY OR NEARLY SIMULTANEOUSLY WITH ONE ANOTHER. BECAUSE THE ORDER MEMORANDA DID NOT CLEARLY IDENTIFY THAT THE TIME STAMP REPRESENTED MULTIPLE ORDER EVENTS, FINRA DETERMINED THAT THE FIRM FAILED TO IDENTIFY THE ORDER RECEIPT, ORDER ENTRY AND ORDER EXECUTION TIMES ON BROKERAGE ORDER MEMORANDA ENTERED INTO ITS PROPRIETARY BOND MARKET ORDER EXECUTION SYSTEM TO BUY NON- CONVERTIBLE PREFERRED SECURITIES.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $45,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 01/07/2014 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2008014584702 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Equity Listed (Common & Preferred Stock) Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): SEC RULE 17A-3, NASD RULE 3110 - MERRILL LYNCH, PIERCE, FENNER & SMITH'S ORDER MEMORANDUM FOR NUMEROUS TRANSACTIONS REFLECTED ONLY ONE ORDER TIME. THE FIRM MAINTAINED THAT THE TIME STAMP REPRESENTED MULTIPLE ORDER TIMES (I.E., THE ORDER RECEIPT, ORDER ENTRY AND ORDER EXECUTION TIMES) BECAUSE THE DECISION TO PURCHASE THE SECURITY, AND THE RESULTANT EXECUTION, HAPPENED SIMULTANEOUSLY OR NEARLY SIMULTANEOUSLY WITH ONE ANOTHER. BECAUSE THE ORDER MEMORANDA DID NOT CLEARLY IDENTIFY THAT THE TIME STAMP REPRESENTED MULTIPLE ORDER EVENTS, FINRA DETERMINED THAT THE FIRM FAILED TO IDENTIFY THE ORDER RECEIPT, ORDER ENTRY AND ORDER EXECUTION TIMES ON BROKERAGE ORDER MEMORANDA ENTERED INTO ITS PROPRIETARY BOND MARKET ORDER EXECUTION SYSTEM TO BUY NON- CONVERTIBLE PREFERRED SECURITIES. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 01/07/2014 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 45,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $45,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $45,000.
regulatory · block 58PDF pages 270–272
- Regulator name — filed text
- BUSINESS CONDUCT COMMITTEE OF THE CHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED (THE "EXCHANGE")
- Monetary/Fine Amount — filed text
- $ 7,500.00
- How was matter resolved — filed text
- Decision
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THAT A VIOLATION OF EXCHANGE RULES HAD BEEN COMMITTED, THE APPLICANT CONSENTED TO A FINE OF $7,500 AND A CENSURE.
Other filed details
Description of allegations — filed text
IN VIOLATION OF CBOE EXCHANGE RULE 3.6A, FROM JANUARY 21, 2012 THROUGH OCTOBER 24, 2013, THE APPLICANT FAILED TO PROPERLY REGISTER ONE ASSOCIATED PERSON AS A PROPRIETARY TRADER PRINCIPAL (TP) WITH THE EXCHANGE IN WEBCRD. IN ADDITION, FROM MAY 31, 2012 THROUGH OCTOBER 10, 2012, THE APPLICANT FAILED TO REGISTER ITS FINANCIAL AND OPERATIONS PRINCIPAL AS A FINANCIAL AND OPERATIONS PRINCIPAL (FN) WITH THE EXCHANGE IN WEBCRD.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THAT A VIOLATION OF EXCHANGE RULES HAD BEEN COMMITTED, THE APPLICANT CONSENTED TO A FINE OF $7,500 AND A CENSURE.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) BUSINESS CONDUCT COMMITTEE OF THE CHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED (THE "EXCHANGE") 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 02/27/2014 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: FILE NO. 13-0074 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): IN VIOLATION OF CBOE EXCHANGE RULE 3.6A, FROM JANUARY 21, 2012 THROUGH OCTOBER 24, 2013, THE APPLICANT FAILED TO PROPERLY REGISTER ONE ASSOCIATED PERSON AS A PROPRIETARY TRADER PRINCIPAL (TP) WITH THE EXCHANGE IN WEBCRD. IN ADDITION, FROM MAY 31, 2012 THROUGH OCTOBER 10, 2012, THE APPLICANT FAILED TO REGISTER ITS FINANCIAL AND OPERATIONS PRINCIPAL AS A FINANCIAL AND OPERATIONS PRINCIPAL (FN) WITH THE EXCHANGE IN WEBCRD. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Decision 11. Resolution Date (MM/DD/YYYY): 02/27/2014 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 7,500.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THAT A VIOLATION OF EXCHANGE RULES HAD BEEN COMMITTED, THE APPLICANT CONSENTED TO A FINE OF $7,500 AND A CENSURE. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THAT A VIOLATION OF EXCHANGE RULES HAD BEEN COMMITTED, THE APPLICANT CONSENTED TO A FINE OF $7,500 AND A CENSURE.
regulatory · block 59PDF pages 272–273
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 7,500.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO REPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE (TRACE) BLOCK TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES WITHIN 15 MINUTES OF THE TIME OF EXECUTION.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO REPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE (TRACE) BLOCK TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES WITHIN 15 MINUTES OF THE TIME OF EXECUTION.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO REPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE (TRACE) BLOCK TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES WITHIN 15 MINUTES OF THE TIME OF EXECUTION.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 05/19/2014 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2013035797801 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: TRACE-ELIGIBLE SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO REPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE (TRACE) BLOCK TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES WITHIN 15 MINUTES OF THE TIME OF EXECUTION. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 05/19/2014 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 7,500.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO REPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE (TRACE) BLOCK TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES WITHIN 15 MINUTES OF THE TIME OF EXECUTION. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO REPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE (TRACE) BLOCK TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES WITHIN 15 MINUTES OF THE TIME OF EXECUTION.
regulatory · block 60PDF pages 273–275
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 1,000,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT SUBMITTED AT LEAST 5,323 INACCURATE BLUE SHEETS TO VARIOUS SECURITIES REGULATORS, INCLUDING THE SEC AND FINRA.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT SUBMITTED AT LEAST 5,323 INACCURATE BLUE SHEETS TO VARIOUS SECURITIES REGULATORS, INCLUDING THE SEC AND FINRA. THE FINDINGS STATED THAT THE INACCURATE BLUE SHEETS FAILED TO INCLUDE CUSTOMER NAMES AND ADDRESSES FOR TRADES MADE ON THE DAY THE CUSTOMER OPENED A FIRM ACCOUNT. BETWEEN 2008 AND JANUARY 2014, A TRADE COULD OCCUR IN A NEW CUSTOMER'S ACCOUNT BEFORE THE CUSTOMER'S NAME AND ADDRESS DATA WAS FULLY POPULATED. IN SUCH INSTANCES, THE FIRM LISTED "NO NAME" ON THE BLUE SHEETS ASSOCIATED WITH SUCH TRADES. AS A RESULT OF THIS PROBLEM, THE FIRM SUBMITTED AT LEAST 2,980 INACCURATE BLUE SHEETS TO THE SEC; 1,538 INACCURATE BLUE SHEETS TO FINRA; 733 INACCURATE BLUE SHEETS TO NYSE; AND 72 INACCURATE BLUE SHEETS TO OTHER REGULATORS. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO HAVE IN PLACE AN AUDIT SYSTEM REASONABLY PROVIDING FOR ACCOUNTABILITY OF ITS BLUE SHEET SUBMISSIONS AND DESIGNED TO ENSURE COMPLIANCE WITH FEDERAL SECURITIES LAWS.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT SUBMITTED AT LEAST 5,323 INACCURATE BLUE SHEETS TO VARIOUS SECURITIES REGULATORS, INCLUDING THE SEC AND FINRA.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 06/04/2014 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2013037904801 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT SUBMITTED AT LEAST 5,323 INACCURATE BLUE SHEETS TO VARIOUS SECURITIES REGULATORS, INCLUDING THE SEC AND FINRA. THE FINDINGS STATED THAT THE INACCURATE BLUE SHEETS FAILED TO INCLUDE CUSTOMER NAMES AND ADDRESSES FOR TRADES MADE ON THE DAY THE CUSTOMER OPENED A FIRM ACCOUNT. BETWEEN 2008 AND JANUARY 2014, A TRADE COULD OCCUR IN A NEW CUSTOMER'S ACCOUNT BEFORE THE CUSTOMER'S NAME AND ADDRESS DATA WAS FULLY POPULATED. IN SUCH INSTANCES, THE FIRM LISTED "NO NAME" ON THE BLUE SHEETS ASSOCIATED WITH SUCH TRADES. AS A RESULT OF THIS PROBLEM, THE FIRM SUBMITTED AT LEAST 2,980 INACCURATE BLUE SHEETS TO THE SEC; 1,538 INACCURATE BLUE SHEETS TO FINRA; 733 INACCURATE BLUE SHEETS TO NYSE; AND 72 INACCURATE BLUE SHEETS TO OTHER REGULATORS. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO HAVE IN PLACE AN AUDIT SYSTEM REASONABLY PROVIDING FOR ACCOUNTABILITY OF ITS BLUE SHEET SUBMISSIONS AND DESIGNED TO ENSURE COMPLIANCE WITH FEDERAL SECURITIES LAWS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 06/04/2014 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 1,000,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: THE FIRM AGREES TO CONDUCT A REVIEW OF ITS POLICIES, SYSTEMS, AND PROCEDURES (WRITTEN OR OTHERWISE) RELATING TO ITS COMPILATION AND SUBMISSION OF BLUE SHEET DATA AND THE AUDIT DEFICIENCIES ADDRESSED HEREIN. Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT SUBMITTED AT LEAST 5,323 INACCURATE BLUE SHEETS TO VARIOUS SECURITIES REGULATORS, INCLUDING THE SEC AND FINRA. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT SUBMITTED AT LEAST 5,323 INACCURATE BLUE SHEETS TO VARIOUS SECURITIES REGULATORS, INCLUDING THE SEC AND FINRA.
regulatory · block 61PDF pages 275–278
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 8,000,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THIS MATTER WAS SELF-REPORTED UNDER FINRA RULE 4530. BEFORE THE REGULATORY ACTION, THE FIRM PAID VOLUNTARY RESTITUTION TO APPROXIMATELY 28,000 RCMA 05 RETIREMENT PLAN ACCOUNTS AND 3,600 CHARITABLE ACCOUNTS, TOTALING IN EXCESS OF $64 MILLION. AND THE FIRM REMEDIATED 1,505 CHARITABLE ORGANIZATION ACCOUNTS MORE THAN $2.7 MILLION, AND IT REMEDIATED AN ADDITIONAL 2,119 CHARITABLE ORGANIZATION ACCOUNTS NEARLY $4.1 MILLION. FINRA FOUND THAT THE FIRM FAILED TO ESTABLISH AND MAINTAIN AN ADEQUATE SUPERVISORY SYSTEM AND WRITTEN PROCEDURES TO ENSURE THAT ELIGIBLE ACCOUNTS PURCHASED CLASS A SHARES WITH SALES CHARGE WAIVERS WHEN PURCHASING SHARES OF CERTAIN MUTUAL FUNDS. THE FIRM FAILED TO MAINTAIN AN ADEQUATE SYSTEM AND WRITTEN PROCEDURES REASONABLY DESIGNED TO IDENTIFY APPLICABLE SALES CHARGE WAIVERS IN MUTUAL FUND PROSPECTUSES FOR CHARITABLE ORGANIZATIONS. THE FIRM MAINTAINED PROCEDURES FOR AN ANNUAL REVIEW TO IDENTIFY POTENTIAL NET ASSET VALUE (NAV) PURCHASE PRIVILEGES, BUT FAILED TO IDENTIFY THIS PURCHASE PRIVILEGE FOR CHARITABLE ORGANIZATION CUSTOMERS AND COMMUNICATE THE INFORMATION TO ITS SALES FORCE, AND DID NOT HAVE PROCEDURES IN PLACE TO MONITOR WHETHER FINANCIAL ADVISORS WERE INFORMING CUSTOMERS OF AVAILABLE MUTUAL FUND SALES CHARGE WAIVERS OR ENSURING THAT ELIGIBLE CUSTOMERS WERE RECEIVING SUCH WAIVERS. THE FIRM'S POLICIES AND PROCEDURES CONCERNING SALES CHARGE WAIVERS WERE INADEQUATE. THE FIRM UNREASONABLY RELIED ON FINANCIAL ADVISORS TO MAKE APPROPRIATE DETERMINATIONS CONCERNING MUTUAL FUND SALES CHARGES EVEN AFTER BECOMING AWARE OF THE PROBLEMS RELATED TO THE AVAILABLITY CLASS A SHARES AT NAV. THUS, THE FIRM FAILED TO ESTABLISH AND MAINTAIN AN ADEQUATE SUPERVISORY SYSTEM AND WRITTEN PROCEDURES TO IDENTIFY CLASS A MUTUAL FUND SALES CHARGE WAIVERS IN FUND PROSPECTUSES, FAILED TO ADEQUATELY NOTIFY AND TRAIN ITS FINANCIAL ADVISORS REGARDING MUTUAL FUND SALES WAIVER ELIGIBILITY REQUIREMENTS, AND FAILED TO HAVE AN ADEQUATE SUPERVISORY SYSTEM TO ENSURE THAT ELIGIBLE ACCOUNTS PURCHASED CLASS A SHARES WITH SALES CHARGE WAIVERS.
Other filed details
Description of allegations — filed text
THIS REGULATORY SETTLEMENT IS THE RESULT OF MATTERS THAT WERE SELF-REPORTED BY THE FIRM AND FOR WHICH THE FIRM PREVIOUSLY MADE SUBSTANTIAL VOLUNTARY CUSTOMER RESTITUTION. WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT MOST OF THE MUTUAL FUNDS AVAILABLE ON ITS RETAIL PLATFORM OFFERED WAIVERS FOR UP-FRONT SALES CHARGES FOR RETUREMENT PLANS AND DISCLOSED THOSE WAIVERS IN THEIR PROSPECTUSES, HOWEVER, THE FIRM FAILED TO APPLY THE WAIVERS TO CERTAIN ELIGIBLE RETIREMENT PLANS THAT PURCHASED SHARES OF THESE MUTUAL FUNDS IN BROKERAGE ACCOUNTS. THE FINDINGS STATED THAT SINCE THE 1980S, THE FIRM OFFERED A RETIREMENT ACCOUNT TO SMALL BUSINESSES KNOWN AT THE FIRM AS THE RETIREMENT CASH MANAGEMENT ACCOUNT 05 (RCMA 05), MAINTAINED ON THE FIRM'S RETAIL BROKERAGE PLATFORM. THE FIRM THEREFORE TREATED THESE ACCOUNTS IN THE SAME MANNER AS OTHER RETAIL CUSTOMER ACCOUNTS FOR PURPOSES OF DETERMINING SHARE CLASS ELIGIBILITY FOR MUTUAL FUND PURCHASES, RATHER THAN APPLYING RETIREMENT PLAN-SPECIFIED SALES CHARGE WAIVERS. THE FIRM FAILED TO IDENTIFY THAT MOST OF THE MUTUAL FUNDS AVAILABLE TO RCMA 05 ACCOUNTS OFFERED SALES CHARGE WAIVERS TO RETIREMENT PLANS AND, AS A RESULT, DISADVANTAGED RETIREMENT PLAN ACCOUNT PARTICIPANTS. THE FIRM LATER SELF-REPORTED THE MATTER TO FINRA, AND DEVELOPED A REMEDIATION PLAN TO RESTORE DISADVANTAGED CUSTOMERS TO SUBSTANTIALLY THE SAME FINANCIAL POSITION THEY WOULD HAVE BEEN, IF THEY HAD PURCHASED CLASS A SHARES WITHOUT SALES CHARGES. THE FIRM REMEDIATED APPROXIMATELY $58 MILLION, INCLUDING INTEREST, TO APPROXIMATELY 16,000 CURRENT AND 12,000 FORMER RCMA 05 RETIREMENT PLAN ACCOUNTS. ALSO, THE FIRM WILL PROVIDE ADDITIONAL RESTITUTION TO RCMA 05 CUSTOMERS WHO PURCHASED SHARES OF 14 ADDITIONAL MUTUAL FUND FAMILIES AGREED TO WITH FINRA. THE FIRM ESTIMATES THAT THE RESTITUTION WILL INCLUDE APPROXIMATELY 13,000 ACCOUNTS AND WILL BE APPROXIMATELY $21.2 MILLION. THE FINDINGS ALSO STATED THAT THE FIRM OFFERED 403(B) CUSTOMERS A RETIREMENT ACCOUNT CALLED A RETIREMENT SELECTOR ACCOUNT (RSA). THE FIRM LATER CLOSED THE RSA PROGRAM TO NEW 403(B) RETIREMENT ACCOUNTS, AND PROHIBITED DEPOSITS OF NEW ASSETS FOR EXISTING RSA ACCOUNTS. ESTABLISHED RSA ACCOUNTS COULD CONTINUE TO BUY AND SELL MUTUAL FUNDS WITH EXISTING ASSETS IN THEIR ACCOUNTS. AS WITH THE RCMA 05 PROGRAM, THE FIRM FAILED TO APPLY AVAILABLE SLAES CHARGE WAIVERS TO THESE RETIREMENT ACCOUNTS. THE FIRM WILL PROVIDE RESTITUTION TO 403(B) RETIREMENT ACCOUNTS THAT PURCHASED SHARES IN THREE MUTUAL FUND FAMILIES THAT QUALIFIED FOR, BUT DID NOT RECEIVE, CLASS A SHARES WITHOUT SALES CHARGES. THE FIRM ESTIMATES THAT THE RESTITUTION WILL INCLUDE APPROXIMATELY 3,178 RSA ACCOUNTS AND WILL BE APPROXIMATELY $3.2 MILLION. THE FIRM WILL ALSO VOLUNTARILY OFFER SUCH RETIREMENT ACCOUNTS ONLY CLASS A SHARES WITH SALES CHARGE WAIVERS FOR ALL FUTURE MUTUAL FUNDS PURCHASES. THE FINDINGS ALSO INCLUDED THAT THE FIRM DISADVANTAGED CHARITABLE ORGANIZATIONS THAT PURCHASED SHARES OF MUTUAL FUNDS BY SELLING THEM CLASS A SHARES WITH SALES CHARGES, OR CLASS B OR CLASS C SHARES THAT CHARGED HIGHER EXPENSE RATIOS THAN CLASS A SHARES. THE FIRM BECAME AWARE OF ITS FAILURE TO PROVIDE SALES CHARGE WAIVERS TO QUALIFIED CHARITABLE ORGANIZATIONS ACCOUNTS, AND, IT LATER, SELF-REPORTED THE ISSUE TO FINRA. THE FIRM SUBSEQUENTLY DEVELOPED A PLAN TO PLACE DISADVANTAGED CUSTOMERS IN SUBSTANTIALLY THE SAME FINANCIAL POSITIONS THEY WOULD HAVE BEEN IN, HAD THEY PURCHASED CLASS A SHARES WITHOUT A SALES CHARGE. (CONT. IN COMMENT SECTION)
Sanction detail — filed text
SEE ABOVE.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE, RESTITUTION 3. Date Initiated (MM/DD/YYYY): 06/16/2014 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2011029999301 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Mutual Fund(s) Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THIS REGULATORY SETTLEMENT IS THE RESULT OF MATTERS THAT WERE SELF-REPORTED BY THE FIRM AND FOR WHICH THE FIRM PREVIOUSLY MADE SUBSTANTIAL VOLUNTARY CUSTOMER RESTITUTION. WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT MOST OF THE MUTUAL FUNDS AVAILABLE ON ITS RETAIL PLATFORM OFFERED WAIVERS FOR UP-FRONT SALES CHARGES FOR RETUREMENT PLANS AND DISCLOSED THOSE WAIVERS IN THEIR PROSPECTUSES, HOWEVER, THE FIRM FAILED TO APPLY THE WAIVERS TO CERTAIN ELIGIBLE RETIREMENT PLANS THAT PURCHASED SHARES OF THESE MUTUAL FUNDS IN BROKERAGE ACCOUNTS. THE FINDINGS STATED THAT SINCE THE 1980S, THE FIRM OFFERED A RETIREMENT ACCOUNT TO SMALL BUSINESSES KNOWN AT THE FIRM AS THE RETIREMENT CASH MANAGEMENT ACCOUNT 05 (RCMA 05), MAINTAINED ON THE FIRM'S RETAIL BROKERAGE PLATFORM. THE FIRM THEREFORE TREATED THESE ACCOUNTS IN THE SAME MANNER AS OTHER RETAIL CUSTOMER ACCOUNTS FOR PURPOSES OF DETERMINING SHARE CLASS ELIGIBILITY FOR MUTUAL FUND PURCHASES, RATHER THAN APPLYING RETIREMENT PLAN-SPECIFIED SALES CHARGE WAIVERS. THE FIRM FAILED TO IDENTIFY THAT MOST OF THE MUTUAL FUNDS AVAILABLE TO RCMA 05 ACCOUNTS OFFERED SALES CHARGE WAIVERS TO RETIREMENT PLANS AND, AS A RESULT, DISADVANTAGED RETIREMENT PLAN ACCOUNT PARTICIPANTS. THE FIRM LATER SELF-REPORTED THE MATTER TO FINRA, AND DEVELOPED A REMEDIATION PLAN TO RESTORE DISADVANTAGED CUSTOMERS TO SUBSTANTIALLY THE SAME FINANCIAL POSITION THEY WOULD HAVE BEEN, IF THEY HAD PURCHASED CLASS A SHARES WITHOUT SALES CHARGES. THE FIRM REMEDIATED APPROXIMATELY $58 MILLION, INCLUDING INTEREST, TO APPROXIMATELY 16,000 CURRENT AND 12,000 FORMER RCMA 05 RETIREMENT PLAN ACCOUNTS. ALSO, THE FIRM WILL PROVIDE ADDITIONAL RESTITUTION TO RCMA 05 CUSTOMERS WHO PURCHASED SHARES OF 14 ADDITIONAL MUTUAL FUND FAMILIES AGREED TO WITH FINRA. THE FIRM ESTIMATES THAT THE RESTITUTION WILL INCLUDE APPROXIMATELY 13,000 ACCOUNTS AND WILL BE APPROXIMATELY $21.2 MILLION. THE FINDINGS ALSO STATED THAT THE FIRM OFFERED 403(B) CUSTOMERS A RETIREMENT ACCOUNT CALLED A RETIREMENT SELECTOR ACCOUNT (RSA). THE FIRM LATER CLOSED THE RSA PROGRAM TO NEW 403(B) RETIREMENT ACCOUNTS, AND PROHIBITED DEPOSITS OF NEW ASSETS FOR EXISTING RSA ACCOUNTS. ESTABLISHED RSA ACCOUNTS COULD CONTINUE TO BUY AND SELL MUTUAL FUNDS WITH EXISTING ASSETS IN THEIR ACCOUNTS. AS WITH THE RCMA 05 PROGRAM, THE FIRM FAILED TO APPLY AVAILABLE SLAES CHARGE WAIVERS TO THESE RETIREMENT ACCOUNTS. THE FIRM WILL PROVIDE RESTITUTION TO 403(B) RETIREMENT ACCOUNTS THAT PURCHASED SHARES IN THREE MUTUAL FUND FAMILIES THAT QUALIFIED FOR, BUT DID NOT RECEIVE, CLASS A SHARES WITHOUT SALES CHARGES. THE FIRM ESTIMATES THAT THE RESTITUTION WILL INCLUDE APPROXIMATELY 3,178 RSA ACCOUNTS AND WILL BE APPROXIMATELY $3.2 MILLION. THE FIRM WILL ALSO VOLUNTARILY OFFER SUCH RETIREMENT ACCOUNTS ONLY CLASS A SHARES WITH SALES CHARGE WAIVERS FOR ALL FUTURE MUTUAL FUNDS PURCHASES. THE FINDINGS ALSO INCLUDED THAT THE FIRM DISADVANTAGED CHARITABLE ORGANIZATIONS THAT PURCHASED SHARES OF MUTUAL FUNDS BY SELLING THEM CLASS A SHARES WITH SALES CHARGES, OR CLASS B OR CLASS C SHARES THAT CHARGED HIGHER EXPENSE RATIOS THAN CLASS A SHARES. THE FIRM BECAME AWARE OF ITS FAILURE TO PROVIDE SALES CHARGE WAIVERS TO QUALIFIED CHARITABLE ORGANIZATIONS ACCOUNTS, AND, IT LATER, SELF-REPORTED THE ISSUE TO FINRA. THE FIRM SUBSEQUENTLY DEVELOPED A PLAN TO PLACE DISADVANTAGED CUSTOMERS IN SUBSTANTIALLY THE SAME FINANCIAL POSITIONS THEY WOULD HAVE BEEN IN, HAD THEY PURCHASED CLASS A SHARES WITHOUT A SALES CHARGE. (CONT. IN COMMENT SECTION) 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 06/16/2014 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 8,000,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: REQUIRED TO PAY APPROXIMATELY $24.4 MILLION, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS. RESTITUTION SHALL BE PROVIDED TO THESE ELIGIBLE RCMA 05 ACCOUNTS AND ELIGIBLE RSA ACCOUNTS. Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: SEE ABOVE. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THIS MATTER WAS SELF-REPORTED UNDER FINRA RULE 4530. BEFORE THE REGULATORY ACTION, THE FIRM PAID VOLUNTARY RESTITUTION TO APPROXIMATELY 28,000 RCMA 05 RETIREMENT PLAN ACCOUNTS AND 3,600 CHARITABLE ACCOUNTS, TOTALING IN EXCESS OF $64 MILLION. AND THE FIRM REMEDIATED 1,505 CHARITABLE ORGANIZATION ACCOUNTS MORE THAN $2.7 MILLION, AND IT REMEDIATED AN ADDITIONAL 2,119 CHARITABLE ORGANIZATION ACCOUNTS NEARLY $4.1 MILLION. FINRA FOUND THAT THE FIRM FAILED TO ESTABLISH AND MAINTAIN AN ADEQUATE SUPERVISORY SYSTEM AND WRITTEN PROCEDURES TO ENSURE THAT ELIGIBLE ACCOUNTS PURCHASED CLASS A SHARES WITH SALES CHARGE WAIVERS WHEN PURCHASING SHARES OF CERTAIN MUTUAL FUNDS. THE FIRM FAILED TO MAINTAIN AN ADEQUATE SYSTEM AND WRITTEN PROCEDURES REASONABLY DESIGNED TO IDENTIFY APPLICABLE SALES CHARGE WAIVERS IN MUTUAL FUND PROSPECTUSES FOR CHARITABLE ORGANIZATIONS. THE FIRM MAINTAINED PROCEDURES FOR AN ANNUAL REVIEW TO IDENTIFY POTENTIAL NET ASSET VALUE (NAV) PURCHASE PRIVILEGES, BUT FAILED TO IDENTIFY THIS PURCHASE PRIVILEGE FOR CHARITABLE ORGANIZATION CUSTOMERS AND COMMUNICATE THE INFORMATION TO ITS SALES FORCE, AND DID NOT HAVE PROCEDURES IN PLACE TO MONITOR WHETHER FINANCIAL ADVISORS WERE INFORMING CUSTOMERS OF AVAILABLE MUTUAL FUND SALES CHARGE WAIVERS OR ENSURING THAT ELIGIBLE CUSTOMERS WERE RECEIVING SUCH WAIVERS. THE FIRM'S POLICIES AND PROCEDURES CONCERNING SALES CHARGE WAIVERS WERE INADEQUATE. THE FIRM UNREASONABLY RELIED ON FINANCIAL ADVISORS TO MAKE APPROPRIATE DETERMINATIONS CONCERNING MUTUAL FUND SALES CHARGES EVEN AFTER BECOMING AWARE OF THE PROBLEMS RELATED TO THE AVAILABLITY CLASS A SHARES AT NAV. THUS, THE FIRM FAILED TO ESTABLISH AND MAINTAIN AN ADEQUATE SUPERVISORY SYSTEM AND WRITTEN PROCEDURES TO IDENTIFY CLASS A MUTUAL FUND SALES CHARGE WAIVERS IN FUND PROSPECTUSES, FAILED TO ADEQUATELY NOTIFY AND TRAIN ITS FINANCIAL ADVISORS REGARDING MUTUAL FUND SALES WAIVER ELIGIBILITY REQUIREMENTS, AND FAILED TO HAVE AN ADEQUATE SUPERVISORY SYSTEM TO ENSURE THAT ELIGIBLE ACCOUNTS PURCHASED CLASS A SHARES WITH SALES CHARGE WAIVERS.
regulatory · block 62PDF pages 278–279
- Regulator name — filed text
- NASDAQ STOCK MARKET
- Monetary/Fine Amount — filed text
- $ 27,500.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE ENTRY OF THE FINDINGS, A FINE OF $27,500, A CENSURE, AND TO THE UNDERTAKING OUTLINED IN 12.B. ABOVE.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO REASONABLY AVOID DISPLAYING, AND ENGAGED IN A PATTERN OR PRACTICE OF DISPLAYING, QUOTATIONS THAT LOCKED OR CROSSED A PROTECTED QUOTATION. THE FINDINGS STATED THAT THE FIRM GAVE ANOTHER BROKER-DEALER, WHICH WAS NOT A MEMBER OF NASDAQ, SPONSORED ACCESS TO NASDAQ AND THAT BROKER-DEALER ENTERED INTERMARKET SWEEP ORDERS INTO THE NASDAQ SINGLE BOOK EXECUTION SYSTEM THAT LOCKED OR CROSSED A QUOTATION PREVIOUSLY DISSEMINATED PURSUANT TO AN EFFECTIVE NATIONAL MARKET SYSTEM PLAN AND FAILED TO SIMULTANEOUSLY ROUTE AN INTERMARKET SWEEP ORDER TO EXECUTE AGAINST THE FULL DISPLAYED SIZE OF THE LOCKED OR CROSSED PROTECTED QUOTE. THIS CONDUCT VIOLATED NASDAQ RULE 4613(E). THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO SUPERVISE ITS SPONSORED ACCESS CLIENTS TO REASONABLY PREVENT THESE CLIENTS FROM ENGAGING IN A PATTERN OR PRACTICE OF DISPLAYING QUOTATIONS IN THE NASDAQ SINGLE BOOK EXECUTION SYSTEM, THAT LOCKED OR CROSSED A PROTECTED QUOTATION. AS A RESULT, THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONS, AND THE NASDAQ RULES CONCERNING LOCKED/CROSSED MARKETS. SPECIFICALLY, THE FIRM'S SUPERVISORY SYSTEM DID NOT INCLUDE WRITTEN SUPERVISORY PROCEDURES PROVIDING FOR: THE IDENTIFICATION OF THE PERSON(S) RESPONSIBLE FOR SUPERVISION WITH RESPECT TO THE APPLICABLE RULES; A STATEMENT OF THE SUPERVISORY STEP(S) TO BE TAKEN BY THE IDENTIFIED PERSON(S); A STATEMENT AS TO HOW OFTEN SUCH PERSON(S) SHOULD TAKE SUCH STEP(S); AND A STATEMENT AS TO HOW THE COMPLETION OF THE STEP(S) INCLUDED IN THE WRITTEN SUPERVISORY PROCEDURES SHOULD BE DOCUMENTED. THIS CONDUCT VIOLATED NASDAQ RULES 2110 AND 3010.
Sanction detail — filed text
SEE ABOVE.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) NASDAQ STOCK MARKET 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 08/07/2014 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2012030914701 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO REASONABLY AVOID DISPLAYING, AND ENGAGED IN A PATTERN OR PRACTICE OF DISPLAYING, QUOTATIONS THAT LOCKED OR CROSSED A PROTECTED QUOTATION. THE FINDINGS STATED THAT THE FIRM GAVE ANOTHER BROKER-DEALER, WHICH WAS NOT A MEMBER OF NASDAQ, SPONSORED ACCESS TO NASDAQ AND THAT BROKER-DEALER ENTERED INTERMARKET SWEEP ORDERS INTO THE NASDAQ SINGLE BOOK EXECUTION SYSTEM THAT LOCKED OR CROSSED A QUOTATION PREVIOUSLY DISSEMINATED PURSUANT TO AN EFFECTIVE NATIONAL MARKET SYSTEM PLAN AND FAILED TO SIMULTANEOUSLY ROUTE AN INTERMARKET SWEEP ORDER TO EXECUTE AGAINST THE FULL DISPLAYED SIZE OF THE LOCKED OR CROSSED PROTECTED QUOTE. THIS CONDUCT VIOLATED NASDAQ RULE 4613(E). THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO SUPERVISE ITS SPONSORED ACCESS CLIENTS TO REASONABLY PREVENT THESE CLIENTS FROM ENGAGING IN A PATTERN OR PRACTICE OF DISPLAYING QUOTATIONS IN THE NASDAQ SINGLE BOOK EXECUTION SYSTEM, THAT LOCKED OR CROSSED A PROTECTED QUOTATION. AS A RESULT, THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONS, AND THE NASDAQ RULES CONCERNING LOCKED/CROSSED MARKETS. SPECIFICALLY, THE FIRM'S SUPERVISORY SYSTEM DID NOT INCLUDE WRITTEN SUPERVISORY PROCEDURES PROVIDING FOR: THE IDENTIFICATION OF THE PERSON(S) RESPONSIBLE FOR SUPERVISION WITH RESPECT TO THE APPLICABLE RULES; A STATEMENT OF THE SUPERVISORY STEP(S) TO BE TAKEN BY THE IDENTIFIED PERSON(S); A STATEMENT AS TO HOW OFTEN SUCH PERSON(S) SHOULD TAKE SUCH STEP(S); AND A STATEMENT AS TO HOW THE COMPLETION OF THE STEP(S) INCLUDED IN THE WRITTEN SUPERVISORY PROCEDURES SHOULD BE DOCUMENTED. THIS CONDUCT VIOLATED NASDAQ RULES 2110 AND 3010. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 08/07/2014 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 27,500.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING: REQUIRED TO REVISE THE FIRM'S WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE LOCKED/CROSSED MARKETS DESCRIBED ABOVE. Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: SEE ABOVE. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE ENTRY OF THE FINDINGS, A FINE OF $27,500, A CENSURE, AND TO THE UNDERTAKING OUTLINED IN 12.B. ABOVE.
regulatory · block 63MERRILL LYNCH EQUITIES (AUSTRALIA) LIMITEDPDF pages 279–281
- Advisory affiliate name — filed text
- MERRILL LYNCH EQUITIES (AUSTRALIA) LIMITED
- Regulator name — filed text
- AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION ("ASIC")
- Monetary/Fine Amount — filed text
- $ 89,108.95
- How was matter resolved — filed text
- Other
Action status / disposition — filed text
WITHOUT ADMITTING TO GUILT OR LIABILITY IN RELATION TO THE ALLEGED CONTRAVENTION, MLE(A)L AGREED TO PAY A PENALTY OF AUD$96,000.00 (APPROXIMATELY USD$89,108.95). MLE(A)L COOPERATED WITH ASIC THROUGHOUT ITS INVESTIGATION.
Other filed details
Description of allegations — filed text
MERRILL LYNCH EQUITIES (AUSTRALIA) LIMITED ("MLE(A)L") CONTRAVENED ASIC MARKET INTEGRITY RULES 5.6.1 AND 5.9.1 AND THEREBY CONTRAVENED SUBSECTION 798H(1) OF THE ACT IN THAT THE MLE(A)L FAILED TO HAVE IN PLACE AN APPROPRIATE AUTOMATED PRICE FILTER FOR ONE CLIENT ACCOUNT, WHICH INTERFERED WITH THE EFFICIENCY AND INTEGRITY OF THE MARKET; AND MLE(A)L'S MISCONDUCT RESULTED IN A MARKET NOT BEING BOTH FAIR AND ORDERLY.
Sanction detail — filed text
WITHOUT ADMITTING TO GUILT OR LIABILITY IN RELATION TO THE ALLEGED CONTRAVENTION, MLE(A)L AGREED TO PAY A PENALTY OF AUD$96,000.00 (APPROXIMATELY USD$89,108.95). MLE(A)L COOPERATED WITH ASIC THROUGHOUT ITS INVESTIGATION.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
MERRILL LYNCH EQUITIES
(AUSTRALIA) LIMITED
(For individuals, Last, First,
Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION ("ASIC")
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
3.
Date Initiated (MM/DD/YYYY):
08/07/2014
Exact
Explanation
p
If not exact, provide explanation:
4.
Docket/Case Number:
MDP REF NO: 20034/13; ASIC REF NO. 23929/12
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Equity Listed (Common & Preferred Stock)
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
MERRILL LYNCH EQUITIES (AUSTRALIA) LIMITED ("MLE(A)L") CONTRAVENED ASIC MARKET INTEGRITY RULES 5.6.1 AND 5.9.1 AND THEREBY
CONTRAVENED SUBSECTION 798H(1) OF THE ACT IN THAT THE MLE(A)L FAILED TO HAVE IN PLACE AN APPROPRIATE AUTOMATED PRICE FILTER FOR
ONE CLIENT ACCOUNT, WHICH INTERFERED WITH THE EFFICIENCY AND INTEGRITY OF THE MARKET; AND MLE(A)L'S MISCONDUCT RESULTED IN A
MARKET NOT BEING BOTH FAIR AND ORDERLY.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Other
11. Resolution Date (MM/DD/YYYY):
08/07/2014
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 89,108.95
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING TO GUILT OR LIABILITY IN RELATION TO THE ALLEGED CONTRAVENTION, MLE(A)L AGREED TO PAY A PENALTY OF
AUD$96,000.00 (APPROXIMATELY USD$89,108.95). MLE(A)L COOPERATED WITH ASIC THROUGHOUT ITS INVESTIGATION.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING TO GUILT OR LIABILITY IN RELATION TO THE ALLEGED CONTRAVENTION, MLE(A)L AGREED TO PAY A PENALTY OF AUD$96,000.00
(APPROXIMATELY USD$89,108.95). MLE(A)L COOPERATED WITH ASIC THROUGHOUT ITS INVESTIGATION.regulatory · block 64PDF pages 281–283
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 72,500.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS, PAID A FINE OF $72,500, AND WAS CENSURED.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT TRANSMITTED EXECUTION OR COMBINED ORDER/EXECUTION REPORTS TO THE ORDER AUDIT TRAIL SYSTEM (OATS) FOR WHICH THE OATS SYSTEM WAS UNABLE TO LINK THE EXECUTION REPORTS TO THE RELATED TRADE REPORTS IN A FINRA TRANSACTION REPORTING SYSTEM DUE TO INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA, AND TRANSMITTED EXECUTION OR COMBINED ORDER/EXECUTION REPORTS TO OATS FOR WHICH IT FAILED TO APPEND THE REQUIRED REPORTING EXCEPTION CODE. THE FINDINGS STATED THAT THE FIRM TRANSMITTED NEW ORDER REPORTS AND RELATED SUBSEQUENT REPORTS TO OATS FOR WHICH THE OATS SYSTEM WAS UNABLE TO CREATE AN ACCURATE, TIME SEQUENCED RECORD FROM THE RECEIPT OF THE ORDER THROUGH ITS RESOLUTION BECAUSE THE TIMESTAMP FOR THE RELATED SUBSEQUENT REPORT OCCURRED PRIOR TO RECEIPT OF THE ORDER, AND TRANSMITTED EXECUTION OR COMBINED ORDER/EXECUTION REPORTS TO OATS THAT CONTAINED INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA. IN SOME OF THESE INSTANCES, THE OATS SYSTEM WAS UNABLE TO LINK THE EXECUTION REPORTS TO THE RELATED TRADE REPORTS IN A FINRA TRADE REPORTING SYSTEM AND IN OTHER INSTANCES, THE FIRM FAILED TO APPEND THE REQUIRED REPORTING EXCEPTION CODE. THE FIRM TRANSMITTED ROUTE OR COMBINED ORDER/ROUTE REPORTS TO OATS FOR WHICH THE OATS SYSTEM WAS UNABLE TO LINK TO THE RELATED EXCHANGE DUE TO INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA, TRANSMITTED ROUTE OR COMBINED ORDER/ROUTE REPORTS TO OATS FOR WHICH THE OATS SYSTEM WAS UNABLE TO LINK TO THE CORRESPONDING NEW ORDER TRANSMITTED BY THE RECEIVING MEMBER FIRM DUE TO INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA, AND TRANSMITTED ROUTE OR COMBINED ORDER/ROUTE REPORTS TO OATS, WHICH WERE SUBMITTED BY OTHER MEMBERS WHERE THE FIRM WAS NAMED AS THE "SENT TO FIRM," FOR WHICH THE OATS SYSTEM WAS UNABLE TO MATCH. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO TRANSMIT AND FAILED TO TIMELY TRANSMIT REPORTABLE ORDER EVENTS (ROES) TO OATS. THE FIRM FAILED TO ACCEPT OR DECLINE IN THE FINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF) TRANSACTIONS IN REPORTABLE SECURITIES WITHIN 20 MINUTES AFTER EXECUTION AND FAILED TO TIMELY REPORT TO THE FNTRF BY 8:00 P.M. EASTERN TIME TRANSACTIONS THAT REQUIRED AN .RX MODIFIER.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS, PAID A FINE OF $72,500, AND WAS CENSURED.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 08/14/2014 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2011028587301 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: UNSPECIFIED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT TRANSMITTED EXECUTION OR COMBINED ORDER/EXECUTION REPORTS TO THE ORDER AUDIT TRAIL SYSTEM (OATS) FOR WHICH THE OATS SYSTEM WAS UNABLE TO LINK THE EXECUTION REPORTS TO THE RELATED TRADE REPORTS IN A FINRA TRANSACTION REPORTING SYSTEM DUE TO INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA, AND TRANSMITTED EXECUTION OR COMBINED ORDER/EXECUTION REPORTS TO OATS FOR WHICH IT FAILED TO APPEND THE REQUIRED REPORTING EXCEPTION CODE. THE FINDINGS STATED THAT THE FIRM TRANSMITTED NEW ORDER REPORTS AND RELATED SUBSEQUENT REPORTS TO OATS FOR WHICH THE OATS SYSTEM WAS UNABLE TO CREATE AN ACCURATE, TIME SEQUENCED RECORD FROM THE RECEIPT OF THE ORDER THROUGH ITS RESOLUTION BECAUSE THE TIMESTAMP FOR THE RELATED SUBSEQUENT REPORT OCCURRED PRIOR TO RECEIPT OF THE ORDER, AND TRANSMITTED EXECUTION OR COMBINED ORDER/EXECUTION REPORTS TO OATS THAT CONTAINED INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA. IN SOME OF THESE INSTANCES, THE OATS SYSTEM WAS UNABLE TO LINK THE EXECUTION REPORTS TO THE RELATED TRADE REPORTS IN A FINRA TRADE REPORTING SYSTEM AND IN OTHER INSTANCES, THE FIRM FAILED TO APPEND THE REQUIRED REPORTING EXCEPTION CODE. THE FIRM TRANSMITTED ROUTE OR COMBINED ORDER/ROUTE REPORTS TO OATS FOR WHICH THE OATS SYSTEM WAS UNABLE TO LINK TO THE RELATED EXCHANGE DUE TO INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA, TRANSMITTED ROUTE OR COMBINED ORDER/ROUTE REPORTS TO OATS FOR WHICH THE OATS SYSTEM WAS UNABLE TO LINK TO THE CORRESPONDING NEW ORDER TRANSMITTED BY THE RECEIVING MEMBER FIRM DUE TO INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA, AND TRANSMITTED ROUTE OR COMBINED ORDER/ROUTE REPORTS TO OATS, WHICH WERE SUBMITTED BY OTHER MEMBERS WHERE THE FIRM WAS NAMED AS THE "SENT TO FIRM," FOR WHICH THE OATS SYSTEM WAS UNABLE TO MATCH. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO TRANSMIT AND FAILED TO TIMELY TRANSMIT REPORTABLE ORDER EVENTS (ROES) TO OATS. THE FIRM FAILED TO ACCEPT OR DECLINE IN THE FINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF) TRANSACTIONS IN REPORTABLE SECURITIES WITHIN 20 MINUTES AFTER EXECUTION AND FAILED TO TIMELY REPORT TO THE FNTRF BY 8:00 P.M. EASTERN TIME TRANSACTIONS THAT REQUIRED AN .RX MODIFIER. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 08/14/2014 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 72,500.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS, PAID A FINE OF $72,500, AND WAS CENSURED. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS, PAID A FINE OF $72,500, AND WAS CENSURED.
regulatory · block 65PDF pages 283–285
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 300,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO A FINE OF $300,000 AND A CENSURE.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO RECORD AND PRESERVE CERTAIN RECORD KEEPING INFORMATION REQUIRED ON OPTIONS ORDER MEMORANDA. THE FINDINGS STATED THAT REPRESENTATIVES IN ONE BRANCH DID NOT FOLLOW THE FIRM'S PROCEDURE TO COMPLETE A PAPER TICKET WHEN OPTIONS ORDERS WERE CALLED INTO THE TRADING DESK. THUS IN 1,801 INSTANCES OF LARGE OPTIONS ORDERS, THE FIRM'S ORDER MEMORANDA DID NOT HAVE THE INFORMATION REFLECTING THE TIME THE ORDER WAS RECEIVED AND THE IDENTITY OF ANY OTHER PERSON WHO ENTERED OR ACCEPTED THE ORDER ON BEHALF OF THE CUSTOMER. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO ADEQUATELY ENFORCE ITS WRITTEN SUPERVISORY PROCEDURES, AT ONE OF ITS BRANCHES, REQUIRING THAT ITS REGISTERED REPRESENTATIVES ACCURATELY RECORDED ALL REQUIRED ORDER MEMORANDA INFORMATION FOR OPTIONS ORDERS THAT WERE TELEPHONED TO THE TRADING DESK. THE BRANCH AUDIT INVOLVED A REVIEW OF A SELECT NUMBER OF MANUAL TICKETS THAT MAY INCLUDE VARIOUS PRODUCTS, BUT MANUAL TICKETS FOR OPTIONS WERE NOT NECESSARILY REVIEWED. AS SUCH, THE FIRM DID NOT ADEQUATELY REVIEW AND MONITOR OPTIONS ORDER TICKETS FOR ORDERS THAT WERE CALLED INTO THE TRADING DESK BY CERTAIN REGISTERED REPRESENTATIVES DURING A TWO-YEAR PERIOD.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO A FINE OF $300,000 AND A CENSURE.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 08/20/2014 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2011030744101 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Options Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO RECORD AND PRESERVE CERTAIN RECORD KEEPING INFORMATION REQUIRED ON OPTIONS ORDER MEMORANDA. THE FINDINGS STATED THAT REPRESENTATIVES IN ONE BRANCH DID NOT FOLLOW THE FIRM'S PROCEDURE TO COMPLETE A PAPER TICKET WHEN OPTIONS ORDERS WERE CALLED INTO THE TRADING DESK. THUS IN 1,801 INSTANCES OF LARGE OPTIONS ORDERS, THE FIRM'S ORDER MEMORANDA DID NOT HAVE THE INFORMATION REFLECTING THE TIME THE ORDER WAS RECEIVED AND THE IDENTITY OF ANY OTHER PERSON WHO ENTERED OR ACCEPTED THE ORDER ON BEHALF OF THE CUSTOMER. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO ADEQUATELY ENFORCE ITS WRITTEN SUPERVISORY PROCEDURES, AT ONE OF ITS BRANCHES, REQUIRING THAT ITS REGISTERED REPRESENTATIVES ACCURATELY RECORDED ALL REQUIRED ORDER MEMORANDA INFORMATION FOR OPTIONS ORDERS THAT WERE TELEPHONED TO THE TRADING DESK. THE BRANCH AUDIT INVOLVED A REVIEW OF A SELECT NUMBER OF MANUAL TICKETS THAT MAY INCLUDE VARIOUS PRODUCTS, BUT MANUAL TICKETS FOR OPTIONS WERE NOT NECESSARILY REVIEWED. AS SUCH, THE FIRM DID NOT ADEQUATELY REVIEW AND MONITOR OPTIONS ORDER TICKETS FOR ORDERS THAT WERE CALLED INTO THE TRADING DESK BY CERTAIN REGISTERED REPRESENTATIVES DURING A TWO-YEAR PERIOD. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 08/20/2014 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 300,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO A FINE OF $300,000 AND A CENSURE. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO A FINE OF $300,000 AND A CENSURE.
regulatory · block 66PDF pages 285–287
- Regulator name — filed text
- COMMODITY FUTURES TRADING COMMISSION ("CFTC")
- Monetary/Fine Amount — filed text
- $ 1,200,000.00
- How was matter resolved — filed text
- Other
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING ANY OF THE FINDINGS OR CONCLUSIONS, THE FIRM AGREED TO THE ENTRY OF THE ORDER, AGREED TO PAY A CIVIL MONETARY PENALTY OF $1,200,000, CEASE AND DESIST FROM FURTHER VIOLATIONS OF CFTC REGULATION 166.3, AND UNDERTAKE TO IMPLEMENT STRENGTHENED PROCESSES AND PROCEDURES RELATED TO FUTURES EXCHANGE AND CLEARING FEE RECONCILIATIONS THAT WILL NOT ONLY IMPROVE ACCURACY, BUT WILL DETECT WHEN THE FIRM'S CUSTOMERS HAVE BEEN CHARGED INACCURATE FUTURES EXCHANGE AND CLEARING FEES. THE FIRM SELF-IDENTIFIED THIS MATTER BEFORE THE CFTC BEGAN ITS INVESTIGATION AND HAS FULLY COOPERATED WITH THE CFTC'S REVIEW OF THIS MATTER.
Other filed details
Description of allegations — filed text
FROM AT LEAST JANUARY 1, 2010 THROUGH APRIL 2013 (THE "RELEVANT PERIOD"), THE FIRM FAILED TO SUPERVISE DILIGENTLY ITS OFFICERS', EMPLOYEES', AND AGENTS' PROCESSING OF EXCHANGE AND CLEARING FEES CHARGED TO ITS CUSTOMERS, IN VIOLATION OF CFTC REGULATION 166.3. AS A RESULT, THE FIRM'S RECONCILIATION PROCESS FOR IDENTIFYING AND CORRECTING DISCREPANCIES BETWEEN THE INVOICES FROM THE EXCHANGE CLEARINGHOUSES AND THE AMOUNTS CHARGED TO CUSTOMERS HAS BEEN INACCURATE AND FAULTY SINCE AT LEAST JANUARY 1, 2010, AND LED TO INSTANCES IN WHICH THE FIRM APPEARS TO HAVE OVERCHARGED SOME CUSTOMERS AND UNDERCHARGED OTHERS. WHERE THE FIRM HAS CONFIRMED THAT THERE WAS AN OVERCHARGE TO A CUSTOMER, THE CUSTOMER'S ACCOUNT HAS BEEN ADJUSTED, BUT THE FIRM HAS BEEN UNABLE TO FULLY RESOLVE SOME DISCREPANCIES. ADDITIONALLY, DURING THE RELEVANT PERIOD, THE FIRM DID NOT HIRE QUALIFIED PERSONNEL TO CONDUCT AND OVERSEE THE FEE RECONCILIATIONS OR PROVIDE ADEQUATE TRAINING TO EXISTING PERSONNEL REGARDING FEE RECONCILIATIONS.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING ANY OF THE FINDINGS OR CONCLUSIONS, THE FIRM AGREED TO THE ENTRY OF THE ORDER, AGREED TO PAY A CIVIL MONETARY PENALTY OF $1,200,000, CEASE AND DESIST FROM FURTHER VIOLATIONS OF CFTC REGULATION 166.3, AND UNDERTAKE TO IMPLEMENT STRENGTHENED PROCESSES AND PROCEDURES RELATED TO FUTURES EXCHANGE AND CLEARING FEE RECONCILIATIONS THAT WILL NOT ONLY IMPROVE ACCURACY, BUT WILL DETECT WHEN THE FIRM'S CUSTOMERS HAVE BEEN CHARGED INACCURATE FUTURES EXCHANGE AND CLEARING FEES. THE FIRM SELF-IDENTIFIED THIS MATTER BEFORE THE CFTC BEGAN ITS INVESTIGATION AND HAS FULLY COOPERATED WITH THE CFTC'S REVIEW OF THIS MATTER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
COMMODITY FUTURES TRADING COMMISSION ("CFTC")
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CEASE AND DESIST UNDERTAKING
3.
Date Initiated (MM/DD/YYYY):
08/26/2014
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
14-22
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Futures - Financial
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
FROM AT LEAST JANUARY 1, 2010 THROUGH APRIL 2013 (THE "RELEVANT PERIOD"), THE FIRM FAILED TO SUPERVISE DILIGENTLY ITS OFFICERS',
EMPLOYEES', AND AGENTS' PROCESSING OF EXCHANGE AND CLEARING FEES CHARGED TO ITS CUSTOMERS, IN VIOLATION OF CFTC REGULATION 166.3.
AS A RESULT, THE FIRM'S RECONCILIATION PROCESS FOR IDENTIFYING AND CORRECTING DISCREPANCIES BETWEEN THE INVOICES FROM THE
EXCHANGE CLEARINGHOUSES AND THE AMOUNTS CHARGED TO CUSTOMERS HAS BEEN INACCURATE AND FAULTY SINCE AT LEAST JANUARY 1, 2010,
AND LED TO INSTANCES IN WHICH THE FIRM APPEARS TO HAVE OVERCHARGED SOME CUSTOMERS AND UNDERCHARGED OTHERS. WHERE THE FIRM
HAS CONFIRMED THAT THERE WAS AN OVERCHARGE TO A CUSTOMER, THE CUSTOMER'S ACCOUNT HAS BEEN ADJUSTED, BUT THE FIRM HAS BEEN
UNABLE TO FULLY RESOLVE SOME DISCREPANCIES. ADDITIONALLY, DURING THE RELEVANT PERIOD, THE FIRM DID NOT HIRE QUALIFIED PERSONNEL
TO CONDUCT AND OVERSEE THE FEE RECONCILIATIONS OR PROVIDE ADEQUATE TRAINING TO EXISTING PERSONNEL REGARDING FEE
RECONCILIATIONS.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Other
11. Resolution Date (MM/DD/YYYY):
08/26/2014
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 1,200,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
UNDERTAKING (SEE 12.C. BELOW)
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING ANY OF THE FINDINGS OR CONCLUSIONS, THE FIRM AGREED TO THE ENTRY OF THE ORDER, AGREED TO PAY A
CIVIL MONETARY PENALTY OF $1,200,000, CEASE AND DESIST FROM FURTHER VIOLATIONS OF CFTC REGULATION 166.3, AND UNDERTAKE TO
IMPLEMENT STRENGTHENED PROCESSES AND PROCEDURES RELATED TO FUTURES EXCHANGE AND CLEARING FEE RECONCILIATIONS THAT WILL
NOT ONLY IMPROVE ACCURACY, BUT WILL DETECT WHEN THE FIRM'S CUSTOMERS HAVE BEEN CHARGED INACCURATE FUTURES EXCHANGE AND
CLEARING FEES. THE FIRM SELF-IDENTIFIED THIS MATTER BEFORE THE CFTC BEGAN ITS INVESTIGATION AND HAS FULLY COOPERATED WITH THE
CFTC'S REVIEW OF THIS MATTER.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING ANY OF THE FINDINGS OR CONCLUSIONS, THE FIRM AGREED TO THE ENTRY OF THE ORDER, AGREED TO PAY A CIVIL
MONETARY PENALTY OF $1,200,000, CEASE AND DESIST FROM FURTHER VIOLATIONS OF CFTC REGULATION 166.3, AND UNDERTAKE TO IMPLEMENT
STRENGTHENED PROCESSES AND PROCEDURES RELATED TO FUTURES EXCHANGE AND CLEARING FEE RECONCILIATIONS THAT WILL NOT ONLY
IMPROVE ACCURACY, BUT WILL DETECT WHEN THE FIRM'S CUSTOMERS HAVE BEEN CHARGED INACCURATE FUTURES EXCHANGE AND CLEARING FEES.
THE FIRM SELF-IDENTIFIED THIS MATTER BEFORE THE CFTC BEGAN ITS INVESTIGATION AND HAS FULLY COOPERATED WITH THE CFTC'S REVIEW OF
THIS MATTER.regulatory · block 67PDF pages 287–289
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 19,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE FINDINGS AND WAS CENSURED AND FINED $19,000.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT AS MANAGING UNDERWRITER, UNDER THE MARKET PARTICIPANT IDENTIFIER (MPID) OF "BOFA", THE FIRM FAILED TO TIMELY REPORT 33 NEW ISSUE OFFERINGS AND UNDER THE MPID "MLCO", THE FIRM FAILED TO TIMELY REPORT 40 NEW ISSUE OFFERINGS IN TRADE REPORTING COMPLIANCE ENGINE (TRACE)- ELIGIBLE SECURITIES TO FINRA IN ACCORDANCE WITH THE REQUIREMENTS OF FINRA RULE 6760(C)
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE FINDINGS AND WAS CENSURED AND FINED $19,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 09/25/2014 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2013038742701 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT AS MANAGING UNDERWRITER, UNDER THE MARKET PARTICIPANT IDENTIFIER (MPID) OF "BOFA", THE FIRM FAILED TO TIMELY REPORT 33 NEW ISSUE OFFERINGS AND UNDER THE MPID "MLCO", THE FIRM FAILED TO TIMELY REPORT 40 NEW ISSUE OFFERINGS IN TRADE REPORTING COMPLIANCE ENGINE (TRACE)- ELIGIBLE SECURITIES TO FINRA IN ACCORDANCE WITH THE REQUIREMENTS OF FINRA RULE 6760(C) 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 09/25/2014 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 19,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE FINDINGS AND WAS CENSURED AND FINED $19,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE FINDINGS AND WAS CENSURED AND FINED $19,000.
regulatory · block 68PDF pages 289–291
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 50,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE FINDINGS AND WAS CENSURED AND FINED $50,000.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO ESTABLISH, MAINTAIN, AND ENFORCE WRITTEN POLICIES AND PROCEDURES THAT WERE REASONABLY DESIGNED TO PREVENT TRADE-THROUGHS OF PROTECTED QUOTATIONS IN NMS STOCKS THAT DO NOT FALL WITHIN ANY APPLICABLE EXCEPTION, AND IF RELYING ON AN EXCEPTION, ARE REASONABLY DESIGNED TO ASSURE COMPLIANCE WITH THE TERMS OF THE EXCEPTION. THE FINDINGS STATED THAT THE FIRM FAILED TO TAKE REASONABLE STEPS TO ESTABLISH THAT THE INTERMARKET SWEEP ORDERS IT ROUTED MET THE DEFINITIONAL REQUIREMENTS SET FORTH IN RULE 600(B)(30) OF REGULATION NMS.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE FINDINGS AND WAS CENSURED AND FINED $50,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 10/06/2014 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2010023889001 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO ESTABLISH, MAINTAIN, AND ENFORCE WRITTEN POLICIES AND PROCEDURES THAT WERE REASONABLY DESIGNED TO PREVENT TRADE-THROUGHS OF PROTECTED QUOTATIONS IN NMS STOCKS THAT DO NOT FALL WITHIN ANY APPLICABLE EXCEPTION, AND IF RELYING ON AN EXCEPTION, ARE REASONABLY DESIGNED TO ASSURE COMPLIANCE WITH THE TERMS OF THE EXCEPTION. THE FINDINGS STATED THAT THE FIRM FAILED TO TAKE REASONABLE STEPS TO ESTABLISH THAT THE INTERMARKET SWEEP ORDERS IT ROUTED MET THE DEFINITIONAL REQUIREMENTS SET FORTH IN RULE 600(B)(30) OF REGULATION NMS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 10/06/2014 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 50,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE FINDINGS AND WAS CENSURED AND FINED $50,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE FINDINGS AND WAS CENSURED AND FINED $50,000.
regulatory · block 69BANK OF AMERICA CORPORATIONPDF pages 291–293
- Advisory affiliate name — filed text
- BANK OF AMERICA CORPORATION
- Regulator name — filed text
- SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 7,650,000.00
- How was matter resolved — filed text
- Settled
Action status / disposition — filed text
THE COMMISSION NOTED THAT BAC SELF IDENTIFIED AND SELF REPORTED THE OVERSTATEMENTS AND THE COMMISSION NOTED THAT BAC HAD PROVIDED SUBSTANTIAL COOPERATION TO THE COMMISSION STAFF. THE COMMISSION ALSO NOTED THAT BAC HAD VOLUNTARILY UNDERTAKEN STEPS TO REMEDIATE AND ADDRESS, AMONG OTHER THINGS, THE INADEQUATE BOOKS AND RECORDS AND INTERNAL ACCOUNTING CONTROL DEFICIENCIES THAT WERE THE SUBJECT OF THE PROCEEDING.
Other filed details
Description of allegations — filed text
THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") ALLEGED THAT BANK OF AMERICA CORPORATION ("BAC"), AS PART OF ITS REGULATORY CAPITAL CALCULATIONS, FAILED TO DEDUCT CERTAIN REALIZED LOSSES ON CERTAIN STRUCTURED NOTES AND OTHER FINANCIAL INSTRUMENTS (THE "NOTES") ISSUED BY MERRILL LYNCH & CO., INC. ("ML&CO.") THAT BAC ASSUMED OR ACQUIRED AS PART OF ITS ACQUISITION OF ML&CO. AND, THEREFORE, BAC OVERSTATED ITS REGULATORY CAPITAL IN ITS FORM 10-Q FILINGS FROM 2009-2014 AND IN ITS FORM 10-K FILINGS FOR FINANCIAL YEARS 2009-2013. THE COMMISSION ALLEGED THAT BAC VIOLATED SECTION 13(B)(2)(A) AND (B) OF THE EXCHANGE ACT.
Sanction detail — filed text
BAC, WITHOUT ADMITTING OR DENYING THE COMMISSION'S FINDINGS, EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER IT AND THE SUBJECT MATTER OF THE PROCEEDINGS, AGREED TO (1) CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 13(B)(2)(A) AND 13(B)(2)(B) OF THE EXCHANGE ACT, AND (2) PAY A CIVIL MONEY PENALTY OF $7,650,000. THE PENALTY WAS PAID ON OCTOBER 7, 2014.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BANK OF AMERICA
CORPORATION
(For individuals, Last, First,
Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
SECURITIES AND EXCHANGE COMMISSION
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CEASE AND DESIST
3.
Date Initiated (MM/DD/YYYY):
09/29/2014
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
3-16177
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") ALLEGED THAT BANK OF AMERICA CORPORATION ("BAC"), AS PART OF ITS
REGULATORY CAPITAL CALCULATIONS, FAILED TO DEDUCT CERTAIN REALIZED LOSSES ON CERTAIN STRUCTURED NOTES AND OTHER FINANCIAL
INSTRUMENTS (THE "NOTES") ISSUED BY MERRILL LYNCH & CO., INC. ("ML&CO.") THAT BAC ASSUMED OR ACQUIRED AS PART OF ITS ACQUISITION OF
ML&CO. AND, THEREFORE, BAC OVERSTATED ITS REGULATORY CAPITAL IN ITS FORM 10-Q FILINGS FROM 2009-2014 AND IN ITS FORM 10-K FILINGS
FOR FINANCIAL YEARS 2009-2013. THE COMMISSION ALLEGED THAT BAC VIOLATED SECTION 13(B)(2)(A) AND (B) OF THE EXCHANGE ACT.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Settled
11. Resolution Date (MM/DD/YYYY):
09/29/2014
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 7,650,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
BAC, WITHOUT ADMITTING OR DENYING THE COMMISSION'S FINDINGS, EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER IT AND THE
SUBJECT MATTER OF THE PROCEEDINGS, AGREED TO (1) CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE
VIOLATIONS OF SECTIONS 13(B)(2)(A) AND 13(B)(2)(B) OF THE EXCHANGE ACT, AND (2) PAY A CIVIL MONEY PENALTY OF $7,650,000. THE
PENALTY WAS PAID ON OCTOBER 7, 2014.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
THE COMMISSION NOTED THAT BAC SELF IDENTIFIED AND SELF REPORTED THE OVERSTATEMENTS AND THE COMMISSION NOTED THAT BAC HAD
PROVIDED SUBSTANTIAL COOPERATION TO THE COMMISSION STAFF. THE COMMISSION ALSO NOTED THAT BAC HAD VOLUNTARILY UNDERTAKEN STEPS
TO REMEDIATE AND ADDRESS, AMONG OTHER THINGS, THE INADEQUATE BOOKS AND RECORDS AND INTERNAL ACCOUNTING CONTROL DEFICIENCIES
THAT WERE THE SUBJECT OF THE PROCEEDING.regulatory · block 70PDF pages 293–294
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 250,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED, FINED $250,000 AND UNDERTAKES TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITS SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONS, AND NASD AND FINRA RULES, CONCERNING THE DETECTIONS OF ORDERS FOR THE PURCHASE AND SALE OF SECURITIES THAT RESULTED IN NO CHANGE OF BENEFICIAL OWNERSHIP. THE FINDINGS STATED THAT THE FIRM'S SUPERVISORY SYSTEM FAILED TO DETECT AND REVIEW TRADES EMANATING FROM CUSTOMER ORDERS AND DID NOT INCLUDE THE VALUE "USD" IN THE CURRENCY INDICATOR FIELD, WHICH LEFT A GAP IN THE FIRM'S SURVEILLANCE SYSTEM THAT RESULTED IN THE FIRM FAILING TO REVIEW IN ITS WASH TRADE SURVEILLANCE PROGRAM NUMEROUS TRADES, REPRESENTING MILLIONS OF SHARES IN VARIOUS SECURITIES ACROSS 83 CUSTOMER ACCOUNTS, AND ALLOWED WASH TRANSACTIONS TO OCCUR UNDETECTED BY THE FIRM.
Sanction detail — filed text
THE FIRM WAS CENSURED, FINED $250,000 AND UNDERTAKES TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 10/21/2014 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2010022950801 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITS SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONS, AND NASD AND FINRA RULES, CONCERNING THE DETECTIONS OF ORDERS FOR THE PURCHASE AND SALE OF SECURITIES THAT RESULTED IN NO CHANGE OF BENEFICIAL OWNERSHIP. THE FINDINGS STATED THAT THE FIRM'S SUPERVISORY SYSTEM FAILED TO DETECT AND REVIEW TRADES EMANATING FROM CUSTOMER ORDERS AND DID NOT INCLUDE THE VALUE "USD" IN THE CURRENCY INDICATOR FIELD, WHICH LEFT A GAP IN THE FIRM'S SURVEILLANCE SYSTEM THAT RESULTED IN THE FIRM FAILING TO REVIEW IN ITS WASH TRADE SURVEILLANCE PROGRAM NUMEROUS TRADES, REPRESENTING MILLIONS OF SHARES IN VARIOUS SECURITIES ACROSS 83 CUSTOMER ACCOUNTS, AND ALLOWED WASH TRANSACTIONS TO OCCUR UNDETECTED BY THE FIRM. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 10/21/2014 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 250,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING: REVISE THE FIRM'S WRITTEN SUPERVISORY PROCEDURES Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED, FINED $250,000 AND UNDERTAKES TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED, FINED $250,000 AND UNDERTAKES TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES.
regulatory · block 71PDF pages 294–296
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 2,500,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED, FINED $2,500,000 AND REQUIRED TO, WITHIN 120 DAYS OF THE ISSUANCE OF A NOTICE OF ACCEPTANCE OF THIS AWC, TO ADOPT AND IMPLEMENT SUPERVISORY SYSTEMS AND WRITTEN PROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE CURRENT REQUIREMENTS OF RULE 204 OF REG SHO.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE ADEQUATE SUPERVISORY SYSTEMS AND PROCEDURES, INCLUDING IN SOME INSTANCES WRITTEN SUPERVISORY PROCEDURES, THAT WERE REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONS INCLUDING REGULATION SHO, EMERGENCY ORDERS ISSUED BY THE SEC, CUSTOMER RESERVE, AND RECORD RETENTION REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934 AND ANTI-MONEY LAUNDERING REQUIREMENTS. THE FINDINGS STATED THAT THE FIRM'S SUPERVISORY SYSTEMS AND PROCEDURES, INCLUDING ITS WRITTEN SUPERVISORY PROCEDURES REGARDING THE ALLOCATION OF FAIL-TO-DELIVER (FTD) POSITIONS CONSIDERED ITS BROKER-DEALER CLIENTS' SHORT POSITIONS WITHOUT ALSO CONSIDERING THEIR TRADING ACTIVITIES AS STATED IN THE RULE 204T AND RULE 2014 ADOPTING RELEASES. THE FIRM'S PROCESSES FAILED TO ENSURE THAT ITS ALLOCATIONS WERE MADE TO THE SPECIFIC ENTITY THAT CONTRIBUTED TO ITS FTD POSITION AS REQUIRED, AND THEREBY THE FIRM NETTED THE SHORT POSITIONS OF FOUR RELATED BUT SEPARATE AND DISTINCT BROKER-DEALER ENTITIES WHEN ALLOCATING ITS FTD POSITIONS. THEREFORE, THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE ADEQUATE SUPERVISORY SYSTEMS AND PROCEDURES, INCLUDING WRITTEN SUPERVISORY PROCEDURES THAT WERE REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH THE REQUIREMENTS OF RULE 204 OF REGULATION SHO BY ALLOCATING ITS CONTINUOUS NET SETTLEMENT (CNS) FTD POSITIONS BASED ON ITS BROKER-DEALER CLIENTS' SHORT POSITIONS AND WITHOUT ALSO CONSIDERING WHICH CLIENTS CONTRIBUTED TO THOSE POSITIONS. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE ADEQUATE SUPERVISORY SYSTEMS AND PROCEDURES, INCLUDING WRITTEN SUPERVISORY PROCEDURES, REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH THE REQUIREMENTS OF RULES 204T(B) AND (C) AND 204(B) AND (C) TO NOTIFY ITS CLIENTS WHEN IT HAD AN AGED FTD POSITION IN A GIVEN SECURITY AND TO REFRAIN FROM EFFECTING OR ACCEPTING FROM ITS CLIENTS SHORT SALES IN SECURITIES IN WHICH IT HAD AN AGED FTD POSITION. THE FINDINGS ALSO INCLUDED THAT THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE ADEQUATE SUPERVISORY SYSTEMS AND PROCEDURES, INCLUDING WRITTEN SUPERVISORY PROCEDURES THAT WERE REASONABLY DESIGNED TO DO SURVEILLANCE OF THE ACTIVITIES OF CERTAIN OF ITS DIRECT MARKET ACCESS, NAKED ACCESS AND SPONSORED ACCESS CLIENTS FOR THE PURPOSE OF DETECTING AND REPORTING, WHERE APPROPRIATE, SUSPICIOUS AND/OR MANIPULATIVE TRADING. BECAUSE THE FIRM'S PROGRAMS FOR SUSPICIOUS ACTIVITY MONITORING FAILED TO CAPTURE CERTAIN TRADING DATA NECESSARY TO MONITOR FOR SUSPICIOUS ACTIVITY, THE FIRM FAILED TO IMPLEMENT AND ESTABLISH PROCEDURES AND INTERNAL CONTROLS REASONABLY DESIGNED TO DETECT AND CAUSE THE REPORTING OF SUSPICIOUS TRANSACTIONS. FINRA FOUND THAT THE FIRM EFFECTED SHORT SALES IN THE SECURITIES RESTRICTED BY SEC EMERGENCY ORDERS. THE FIRM SUBMITTED INACCURATE FOCUS REPORTS IN THAT THEY CONTAINED INACCURATE RESERVE FORMULA COMPUTATIONS.
Sanction detail — filed text
THE FIRM WAS CENSURED, FINED $2,500,000 AND REQUIRED TO, WITHIN 120 DAYS OF THE ISSUANCE OF A NOTICE OF ACCEPTANCE OF THIS AWC, TO ADOPT AND IMPLEMENT SUPERVISORY SYSTEMS AND WRITTEN PROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE CURRENT REQUIREMENTS OF RULE 204 OF REG SHO.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 10/27/2014 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2010022971201 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: UNSPECIFIED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE ADEQUATE SUPERVISORY SYSTEMS AND PROCEDURES, INCLUDING IN SOME INSTANCES WRITTEN SUPERVISORY PROCEDURES, THAT WERE REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONS INCLUDING REGULATION SHO, EMERGENCY ORDERS ISSUED BY THE SEC, CUSTOMER RESERVE, AND RECORD RETENTION REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934 AND ANTI-MONEY LAUNDERING REQUIREMENTS. THE FINDINGS STATED THAT THE FIRM'S SUPERVISORY SYSTEMS AND PROCEDURES, INCLUDING ITS WRITTEN SUPERVISORY PROCEDURES REGARDING THE ALLOCATION OF FAIL-TO-DELIVER (FTD) POSITIONS CONSIDERED ITS BROKER-DEALER CLIENTS' SHORT POSITIONS WITHOUT ALSO CONSIDERING THEIR TRADING ACTIVITIES AS STATED IN THE RULE 204T AND RULE 2014 ADOPTING RELEASES. THE FIRM'S PROCESSES FAILED TO ENSURE THAT ITS ALLOCATIONS WERE MADE TO THE SPECIFIC ENTITY THAT CONTRIBUTED TO ITS FTD POSITION AS REQUIRED, AND THEREBY THE FIRM NETTED THE SHORT POSITIONS OF FOUR RELATED BUT SEPARATE AND DISTINCT BROKER-DEALER ENTITIES WHEN ALLOCATING ITS FTD POSITIONS. THEREFORE, THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE ADEQUATE SUPERVISORY SYSTEMS AND PROCEDURES, INCLUDING WRITTEN SUPERVISORY PROCEDURES THAT WERE REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH THE REQUIREMENTS OF RULE 204 OF REGULATION SHO BY ALLOCATING ITS CONTINUOUS NET SETTLEMENT (CNS) FTD POSITIONS BASED ON ITS BROKER-DEALER CLIENTS' SHORT POSITIONS AND WITHOUT ALSO CONSIDERING WHICH CLIENTS CONTRIBUTED TO THOSE POSITIONS. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE ADEQUATE SUPERVISORY SYSTEMS AND PROCEDURES, INCLUDING WRITTEN SUPERVISORY PROCEDURES, REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH THE REQUIREMENTS OF RULES 204T(B) AND (C) AND 204(B) AND (C) TO NOTIFY ITS CLIENTS WHEN IT HAD AN AGED FTD POSITION IN A GIVEN SECURITY AND TO REFRAIN FROM EFFECTING OR ACCEPTING FROM ITS CLIENTS SHORT SALES IN SECURITIES IN WHICH IT HAD AN AGED FTD POSITION. THE FINDINGS ALSO INCLUDED THAT THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE ADEQUATE SUPERVISORY SYSTEMS AND PROCEDURES, INCLUDING WRITTEN SUPERVISORY PROCEDURES THAT WERE REASONABLY DESIGNED TO DO SURVEILLANCE OF THE ACTIVITIES OF CERTAIN OF ITS DIRECT MARKET ACCESS, NAKED ACCESS AND SPONSORED ACCESS CLIENTS FOR THE PURPOSE OF DETECTING AND REPORTING, WHERE APPROPRIATE, SUSPICIOUS AND/OR MANIPULATIVE TRADING. BECAUSE THE FIRM'S PROGRAMS FOR SUSPICIOUS ACTIVITY MONITORING FAILED TO CAPTURE CERTAIN TRADING DATA NECESSARY TO MONITOR FOR SUSPICIOUS ACTIVITY, THE FIRM FAILED TO IMPLEMENT AND ESTABLISH PROCEDURES AND INTERNAL CONTROLS REASONABLY DESIGNED TO DETECT AND CAUSE THE REPORTING OF SUSPICIOUS TRANSACTIONS. FINRA FOUND THAT THE FIRM EFFECTED SHORT SALES IN THE SECURITIES RESTRICTED BY SEC EMERGENCY ORDERS. THE FIRM SUBMITTED INACCURATE FOCUS REPORTS IN THAT THEY CONTAINED INACCURATE RESERVE FORMULA COMPUTATIONS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 10/27/2014 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 2,500,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED, FINED $2,500,000 AND REQUIRED TO, WITHIN 120 DAYS OF THE ISSUANCE OF A NOTICE OF ACCEPTANCE OF THIS AWC, TO ADOPT AND IMPLEMENT SUPERVISORY SYSTEMS AND WRITTEN PROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE CURRENT REQUIREMENTS OF RULE 204 OF REG SHO. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED, FINED $2,500,000 AND REQUIRED TO, WITHIN 120 DAYS OF THE ISSUANCE OF A NOTICE OF ACCEPTANCE OF THIS AWC, TO ADOPT AND IMPLEMENT SUPERVISORY SYSTEMS AND WRITTEN PROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE CURRENT REQUIREMENTS OF RULE 204 OF REG SHO.
regulatory · block 72PDF pages 297–298
- Regulator name — filed text
- NEW YORK STOCK EXCHANGE
- Monetary/Fine Amount — filed text
- $ 125,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM IS CENSURED AND FINED $125.000. THIS AWC CASE INCLUDED OTHER CASES - NOS. 20130354782, 20130382689, AND 20130387807.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT DURING THE PERIOD, THE FIRM PARTICIPATED IN THE NYSE'S SUPPLEMENTAL LIQUIDITY PROVIDER (SLP) PROGRAM. AS A SLP, THE FIRM PROVIDED LIQUIDITY IN ITS ASSIGNED SECURITIES BY ELECTRONICALLY ENTERING RESTING ORDERS INTO THE SYSTEMS AND FACILITIES OF THE NYSE. THE FIRM UTILIZED NUMEROUS ALGORITHMS WITHIN ITS QUANTITATIVE SYSTEMIC ARBITRAGE (QSA) DESK TO FULFILL ITS OBLIGATIONS AS A SLP. AS OF MARCH 26, 2014, THE FIRM DISCONTINUED ITS QSA DESK TRADING OPERATIONS AND RELATED NYSE SLP TRADING ALGORITHMS. HOWEVER, DURING THE RELEVANT PERIOD, APPROXIMATELY 600,000 SLP ORDERS THE FIRM ENTERED THROUGH ITS SLP ALGORITHMS RESULTED IN EXECUTIONS ON THE NYSE AGAINST ORDERS ENTERED BY OTHER OF THE FIRM'S PROPRIETARY ALGORITHMS. ALL QSA ALGORITHMIC TRADING STRATEGIES RAN ON THE FIRM'S ALGORITHMIC TRADING PLATFORM AND WERE SUBJECT TO A WASH SALE CONTROL PROCEDURE GOVERNED BY PRICE. ALTHOUGH THE FIRM'S SLP ALGORITHMS WERE DESIGNED TO PREVENT THE MATCHING OF BUY AND SELL ORDERS WITHIN A SINGLE ALGORITHM, THE FIRM HAD NO SYSTEMIC PRE- TRADE BLOCK IN PLACE TO PREVENT THE ENTRY OF ORDERS ACROSS DIFFERENT ALGORITHMS THAT COULD POTENTIALLY INTERACT. THE FIRM'S QSA TRADING SUPERVISION GROUP UTILIZED THE WASH SALE CROSSING REPORT, WHICH WAS A T+1 REPORT DESIGNED TO CAPTURE INSTANCES WHERE AN INDIVIDUAL ALGORITHM IS ON BOTH THE BUY SIDE AND SELL SIDE OF A TRADE. IN ADDITION, AT A POINT, THE FIRM ADDED THE QSA SYSTEM DATA TO ITS PREEXISTING CONTEMPORANEOUS TRANSACTION (WASH SALE) REVIEW, WHICH WAS USED BY ITS EQUITY SURVEILLANCE GROUP TO IDENTIFY SCENARIOS IN WHICH A BUY AND SELL TRANSATION IN THE SAME SECURITY OCCURRED IN THE SAME CUSTOMER OR FIRM HOUSE ACCOUNT AT THE SAME PRICE ON THE SAME TRADE DATE FOR POSSIBLE PROHIBITED TRADING STRATEGY. DURING THE PERIOD, THE FIRM DID NOT HAVE A REPORT TO DETECT INSTANCES WHERE TWO SEPARATE FIRM ALGORITHMS WERE ON THE BUY SIDE AND SELL SIDE OF A TRADE. AS A RESULT, THE SELF-TRADE CONTROLS AND REPORTS WERE NOT CAPABLE OF REASONABLY DETECTING AND/OR PREVENTING SLP TRADES THAT RESULTED IN NO BENEFICIAL CHANGE OF OWNERSHIP. THE CONDUCT DESCRIBED HEREIN CONSTITUTES A SEPARATE AND DISTINCT VIOLATION OF NYSE RULE 342.
Sanction detail — filed text
THE FIRM IS CENSURED AND FINED $125.000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) NEW YORK STOCK EXCHANGE 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 12/01/2014 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2012033090601 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: UNSPECIFIED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT DURING THE PERIOD, THE FIRM PARTICIPATED IN THE NYSE'S SUPPLEMENTAL LIQUIDITY PROVIDER (SLP) PROGRAM. AS A SLP, THE FIRM PROVIDED LIQUIDITY IN ITS ASSIGNED SECURITIES BY ELECTRONICALLY ENTERING RESTING ORDERS INTO THE SYSTEMS AND FACILITIES OF THE NYSE. THE FIRM UTILIZED NUMEROUS ALGORITHMS WITHIN ITS QUANTITATIVE SYSTEMIC ARBITRAGE (QSA) DESK TO FULFILL ITS OBLIGATIONS AS A SLP. AS OF MARCH 26, 2014, THE FIRM DISCONTINUED ITS QSA DESK TRADING OPERATIONS AND RELATED NYSE SLP TRADING ALGORITHMS. HOWEVER, DURING THE RELEVANT PERIOD, APPROXIMATELY 600,000 SLP ORDERS THE FIRM ENTERED THROUGH ITS SLP ALGORITHMS RESULTED IN EXECUTIONS ON THE NYSE AGAINST ORDERS ENTERED BY OTHER OF THE FIRM'S PROPRIETARY ALGORITHMS. ALL QSA ALGORITHMIC TRADING STRATEGIES RAN ON THE FIRM'S ALGORITHMIC TRADING PLATFORM AND WERE SUBJECT TO A WASH SALE CONTROL PROCEDURE GOVERNED BY PRICE. ALTHOUGH THE FIRM'S SLP ALGORITHMS WERE DESIGNED TO PREVENT THE MATCHING OF BUY AND SELL ORDERS WITHIN A SINGLE ALGORITHM, THE FIRM HAD NO SYSTEMIC PRE- TRADE BLOCK IN PLACE TO PREVENT THE ENTRY OF ORDERS ACROSS DIFFERENT ALGORITHMS THAT COULD POTENTIALLY INTERACT. THE FIRM'S QSA TRADING SUPERVISION GROUP UTILIZED THE WASH SALE CROSSING REPORT, WHICH WAS A T+1 REPORT DESIGNED TO CAPTURE INSTANCES WHERE AN INDIVIDUAL ALGORITHM IS ON BOTH THE BUY SIDE AND SELL SIDE OF A TRADE. IN ADDITION, AT A POINT, THE FIRM ADDED THE QSA SYSTEM DATA TO ITS PREEXISTING CONTEMPORANEOUS TRANSACTION (WASH SALE) REVIEW, WHICH WAS USED BY ITS EQUITY SURVEILLANCE GROUP TO IDENTIFY SCENARIOS IN WHICH A BUY AND SELL TRANSATION IN THE SAME SECURITY OCCURRED IN THE SAME CUSTOMER OR FIRM HOUSE ACCOUNT AT THE SAME PRICE ON THE SAME TRADE DATE FOR POSSIBLE PROHIBITED TRADING STRATEGY. DURING THE PERIOD, THE FIRM DID NOT HAVE A REPORT TO DETECT INSTANCES WHERE TWO SEPARATE FIRM ALGORITHMS WERE ON THE BUY SIDE AND SELL SIDE OF A TRADE. AS A RESULT, THE SELF-TRADE CONTROLS AND REPORTS WERE NOT CAPABLE OF REASONABLY DETECTING AND/OR PREVENTING SLP TRADES THAT RESULTED IN NO BENEFICIAL CHANGE OF OWNERSHIP. THE CONDUCT DESCRIBED HEREIN CONSTITUTES A SEPARATE AND DISTINCT VIOLATION OF NYSE RULE 342. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 12/01/2014 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 125,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM IS CENSURED AND FINED $125.000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM IS CENSURED AND FINED $125.000. THIS AWC CASE INCLUDED OTHER CASES - NOS. 20130354782, 20130382689, AND 20130387807.
regulatory · block 73PDF pages 298–300
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 4,000,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED AND FINED $4,000,000. THE FIRM DID NOT PUBLISH ANY EQUITY RESEARCH REPORTS ABOUT THE COMPANY DURING THE PERIOD DESCRIBED IN THE SETTLEMENT DOCUMENT, AS THE COMPANY DECIDED NOT TO PROCEED WITH THE IPO.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THE FIRM VIOLATED PROVISIONS OF NASD RULE 2711, THROUGH ITS PARTICIPATION IN A PLANNED INITIAL PUBLIC OFFERING (IPO). THE FINDINGS STATED THAT A COMPANY AND ITS PRIVATE EQUITY OWNERS ("SPONSORS") INVITED THE FIRM TO COMPETE FOR A ROLE IN THE COMPANY'S PLANNED IPO. THE FIRM ALLOWED ITS RESEARCH ANALYST TO PARTICIPATE IN THE FIRM'S SOLICITATION EFFORTS BY MAKING A PRESENTATION TO THE COMPANY AND ITS SPONSORS DURING THE SOLICITATION PERIOD. TO WIN THIS INVESTMENT BANKING BUSINESS FROM THE COMPANY THE FIRM ALLOWED ITS EQUITY RESEARCH ANALYST TO PARTICIPATE IN THE FIRM'S SOLICITATION EFFORTS. THEREFORE, IN THE CONTEXT OF THE COMPANY'S IPO, THIS WAS A CONFLICT OF INTEREST BY THE RESEARCH ANALYST AS THEY WERE PROHIBITED FROM PARTICIPATING IN EFFORTS TO SOLICIT INVESTMENT BANKING BUSINESS. ADDITIONALLY, THE FIRM COMPLIED WITH THE COMPANY'S REQUEST FOR A VALUATION THAT INCLUDED THE ANALYST'S VIEWS. THE FINDINGS ALSO STATED THAT TO WIN THIS INVESTMENT BANKING BUSINESS FROM THE COMPANY THE FIRM OFFERED FAVORABLE RESEARCH COVERAGE TO THE COMPANY. UNDER THE CIRCUMSTANCES OF THE IPO, THE COMPANY OFFERED FAVORABLE RESEARCH COVERAGE TO INDUCE RECEIPT OF INVESTMENT BANKING BUSINESS BY SUBMITTING TO THE COMPANY, DURING THE SOLICITATION PERIOD, INFORMATION RELATED TO A VALUATION TEMPLATE REQUESTED BY THE COMPANY AND THE SPONSORS. THEREFORE, IN THE CONTEXT OF THE COMPANY'S IPO THIS WAS A VIOLATION, WHICH PROHIBITS FIRM FROM DIRECTLY OR INDIRECTLY OFFERING FAVORABLE RESEARCH TO OBTAIN INVESTMENT BANKING BUSINESS. THE FIRM UNDERSTOOD THAT THE COMPANY AND THE SPONSORS WANTED A FINAL VALUATION THAT THE ENTIRE FIRM, INCLUDING ITS ANALYST, WOULD SUPPORT IF SELECTED AS AN UNDERWRITER. ALTHOUGH THE FIRM DID NOT COMPLETE THE ACTUAL TEMPLATE PROVIDED TO THE FIRM BY THE COMPANY, IT PROVIDED THE VALUATION INFORMATION THE COMPANY HAD REQUESTED. THE COVER EMAIL NOTED THAT THE VALUATION RANGE PRESENTED REFLECTS THE VIEWS ACROSS THE FIRM'S PLATFORM, AND PROVIDES ABSOLUTE CLARITY ON THE FIRM'S PERSPECTIVE ON VALUE. THE FOLLOWING DAY, AN INVESTMENT BANKER OF THE FIRM FORWARDED ITS RESPONSE TO ONE OF THE SPONSORS, NOTING THAT THE RESPONSE REFLECTS A FULLY VETTED FIRM VIEW ON VALUATION FOR THE COMPANY. THE INVESTMENT BANKERS ALSO UNDERSTOOD THAT THE COMPANY MANAGEMENT AND SPONSORS WERE LOOKING AT THE ANALYSTS AND THEIR VIEW OF THE POTENTIAL TRANSACTION FOR PURPOSES OF DISTINGUISHING THE FIRM FROM OTHERS COMPETING FOR THE ROLE IN THE COMPANY'S PLANNED IPO. BY PROVIDING THE COMPANY THE UNIFIED VALUATION IT SOUGHT, THE FIRM INDICATED TO THE COMPANY THAT POST-IPO RESEARCH COVERAGE WOULD BE POSITIVE AND ALIGNED WITH INVESTMENT BANKING. SHORTLY THEREAFTER, THE COMPANY AND THE SPONSORS SELECTED THE FIRM AS AN ACTIVE BOOK-RUNNER FOR THE COMPANY'S IPO. THE COMPANY, HOWEVER, EVENTUALLY DECIDED NOT TO PROCEED WITH THE OFFERING.
Sanction detail — filed text
THE FIRM WAS CENSURED AND FINED $4,000,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
FINRA
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE
3.
Date Initiated (MM/DD/YYYY):
12/11/2014
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
2011030683501
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
INITIAL PUBLIC OFFERING
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THE FIRM
VIOLATED PROVISIONS OF NASD RULE 2711, THROUGH ITS PARTICIPATION IN A PLANNED INITIAL PUBLIC OFFERING (IPO). THE FINDINGS STATED
THAT A COMPANY AND ITS PRIVATE EQUITY OWNERS ("SPONSORS") INVITED THE FIRM TO COMPETE FOR A ROLE IN THE COMPANY'S PLANNED IPO. THE
FIRM ALLOWED ITS RESEARCH ANALYST TO PARTICIPATE IN THE FIRM'S SOLICITATION EFFORTS BY MAKING A PRESENTATION TO THE COMPANY AND
ITS SPONSORS DURING THE SOLICITATION PERIOD. TO WIN THIS INVESTMENT BANKING BUSINESS FROM THE COMPANY THE FIRM ALLOWED ITS
EQUITY RESEARCH ANALYST TO PARTICIPATE IN THE FIRM'S SOLICITATION EFFORTS. THEREFORE, IN THE CONTEXT OF THE COMPANY'S IPO, THIS WAS
A CONFLICT OF INTEREST BY THE RESEARCH ANALYST AS THEY WERE PROHIBITED FROM PARTICIPATING IN EFFORTS TO SOLICIT INVESTMENT BANKING
BUSINESS. ADDITIONALLY, THE FIRM COMPLIED WITH THE COMPANY'S REQUEST FOR A VALUATION THAT INCLUDED THE ANALYST'S VIEWS. THE
FINDINGS ALSO STATED THAT TO WIN THIS INVESTMENT BANKING BUSINESS FROM THE COMPANY THE FIRM OFFERED FAVORABLE RESEARCH
COVERAGE TO THE COMPANY. UNDER THE CIRCUMSTANCES OF THE IPO, THE COMPANY OFFERED FAVORABLE RESEARCH COVERAGE TO INDUCE
RECEIPT OF INVESTMENT BANKING BUSINESS BY SUBMITTING TO THE COMPANY, DURING THE SOLICITATION PERIOD, INFORMATION RELATED TO A
VALUATION TEMPLATE REQUESTED BY THE COMPANY AND THE SPONSORS. THEREFORE, IN THE CONTEXT OF THE COMPANY'S IPO THIS WAS A
VIOLATION, WHICH PROHIBITS FIRM FROM DIRECTLY OR INDIRECTLY OFFERING FAVORABLE RESEARCH TO OBTAIN INVESTMENT BANKING BUSINESS.
THE FIRM UNDERSTOOD THAT THE COMPANY AND THE SPONSORS WANTED A FINAL VALUATION THAT THE ENTIRE FIRM, INCLUDING ITS ANALYST,
WOULD SUPPORT IF SELECTED AS AN UNDERWRITER. ALTHOUGH THE FIRM DID NOT COMPLETE THE ACTUAL TEMPLATE PROVIDED TO THE FIRM BY THE
COMPANY, IT PROVIDED THE VALUATION INFORMATION THE COMPANY HAD REQUESTED. THE COVER EMAIL NOTED THAT THE VALUATION RANGE
PRESENTED REFLECTS THE VIEWS ACROSS THE FIRM'S PLATFORM, AND PROVIDES ABSOLUTE CLARITY ON THE FIRM'S PERSPECTIVE ON VALUE. THE
FOLLOWING DAY, AN INVESTMENT BANKER OF THE FIRM FORWARDED ITS RESPONSE TO ONE OF THE SPONSORS, NOTING THAT THE RESPONSE
REFLECTS A FULLY VETTED FIRM VIEW ON VALUATION FOR THE COMPANY. THE INVESTMENT BANKERS ALSO UNDERSTOOD THAT THE COMPANY
MANAGEMENT AND SPONSORS WERE LOOKING AT THE ANALYSTS AND THEIR VIEW OF THE POTENTIAL TRANSACTION FOR PURPOSES OF
DISTINGUISHING THE FIRM FROM OTHERS COMPETING FOR THE ROLE IN THE COMPANY'S PLANNED IPO. BY PROVIDING THE COMPANY THE UNIFIED
VALUATION IT SOUGHT, THE FIRM INDICATED TO THE COMPANY THAT POST-IPO RESEARCH COVERAGE WOULD BE POSITIVE AND ALIGNED WITH
INVESTMENT BANKING. SHORTLY THEREAFTER, THE COMPANY AND THE SPONSORS SELECTED THE FIRM AS AN ACTIVE BOOK-RUNNER FOR THE
COMPANY'S IPO. THE COMPANY, HOWEVER, EVENTUALLY DECIDED NOT TO PROCEED WITH THE OFFERING.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
12/11/2014
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 4,000,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE FIRM WAS CENSURED AND FINED $4,000,000.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
THE FIRM WAS CENSURED AND FINED $4,000,000. THE FIRM DID NOT PUBLISH ANY EQUITY RESEARCH REPORTS ABOUT THE COMPANY DURING THE
PERIOD DESCRIBED IN THE SETTLEMENT DOCUMENT, AS THE COMPANY DECIDED NOT TO PROCEED WITH THE IPO.regulatory · block 74PDF pages 301–303
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 1,900,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED, FINED $1,900,000, ORDERED TO PAY RESTITUTION IN THE AMOUNT OF $541,629.19, PLUS INTEREST, AND UNDERTAKES TO PROVIDE THREE REPORTS, WRITTEN AND ORAL, TO FINRA ON DATES THAT ARE NO MORE THAN SIX MONTHS, 12 MONTHS, AND 18 MONTHS AFTER THE DATE OF THE NOTICE OF ACCEPTANCE OF THIS AWC, REGARDING THE EFFECTIVENESS OF THE FIRM'S SUPERVISORY SYSTEM WITH RESPECT TO THE PRICING OF RETAIL CUSTOMER TRANSACTIONS EXECUTED BY THE CREDIT DESK.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IN 716 CORPORATE BOND TRANSACTIONS, THE FIRM BOUGHT CORPORATE BONDS FROM CUSTOMERS AND FAILED TO BUY SUCH BONDS AT A PRICE THAT WAS FAIR, TAKING INTO CONSIDERATION ALL RELEVANT CIRCUMSTANCES, INCLUDING MARKET CONDITIONS WITH RESPECT TO EACH BOND AT THE TIME OF THE TRANSACTION, THE EXPENSE INVOLVED AND THAT THE FIRM WAS ENTITLED TO A PROFIT. THE FINDINGS STATED THAT ALL 716 TRANSACTIONS AT ISSUE IN THIS MATTER INVOLVED RETAIL CUSTOMERS SELLING THEIR SENIOR NOTES ISSUED BY A COMPANY TO THE FIRM. THE NOTES WERE DE- LISTED FROM THE NEW YORK STOCK EXCHANGE AFTER A BANKRUPTCY FILING. AFTER THE DE-LISTING, THE NOTES WERE HIGHLY DISTRESSED AND REQUIRED TO BE EXECUTED MANUALLY AT THE FIRM. THE FIRM'S CREDIT DESK PROVIDED BIDS AWAY FROM THE PREVAILING MARKET TO THE FIRM'S SERVICE DESKS, WHICH ULTIMATELY RESULTED IN THE FIRM PURCHASING THE NOTES FROM RETAIL CUSTOMERS AT PRICES BELOW THE PREVAILING MARKET PRICE. MOREOVER, OF THE 716 TRANSACTIONS, 510 OF THESE HAD MARKDOWNS IN EXCESS OF 10 PERCENT. THE FINDINGS ALSO STATED THAT THE FIRM DID NOT HAVE AN ADEQUATE SUPERVISORY SYSTEM IN PLACE TO DETECT WHETHER THE FIRM'S CREDIT DESK EXECUTED A RETAIL CUSTOMER TRANSACTION AT A PRICE CONSISTENT WITH THE PREVAILING MARKET PRICE OF THAT SECURITY. SPECIFICALLY, THE FIRM DID NOT CONDUCT FAIR PRICING POST-TRADE REVIEWS OF THE TRANSACTIONS HERE, OR FAIR PRICING OR BEST EXECUTION POST-TRADE REVIEWS OF OTHER RETAIL CUSTOMER TRADES EXECUTED ON THE CREDIT DESK. AS A RESULT, THE FIRM'S SUPERVISORY SYSTEM DURING THE REVIEW PERIOD WAS DEFICIENT. MOREOVER, THE FIRM'S WRITTEN SUPERVISORY PROCEDURES (WSPS) WERE DEFICIENT, WITH RESPECT TO THE TRANSACTIONS HERE AND OTHER RETAIL CUSTOMER TRADES EXECUTED ON THE CREDIT DESK, BECAUSE THEY DID NOT ESTABLISH: THE IDENTIFICATION OF THE PERSON RESPONSIBLE FOR SUPERVISION WITH RESPECT TO FAIR PRICING AND BEST EXECUTION REVIEWS OF RETAIL CUSTOMER TRANSACTIONS EXECUTED BY THE CREDIT DESK; A STATEMENT OF THE SUPERVISORY STEPS TO BE TAKEN BY THE IDENTIFIED PERSON; A STATEMENT AS TO HOW OFTEN SUCH PERSON SHOULD TAKE SUCH STEPS; AND A STATEMENT AS TO HOW THE COMPLETION OF THE STEPS INCLUDED IN THE WSPS SHOULD BE DOCUMENTED.
Sanction detail — filed text
THE FIRM WAS CENSURED, FINED $1,900,000, ORDERED TO PAY RESTITUTION IN THE AMOUNT OF $541,629.19, PLUS INTEREST, AND UNDERTAKES TO PROVIDE THREE REPORTS, WRITTEN AND ORAL, TO FINRA ON DATES THAT ARE NO MORE THAN SIX MONTHS, 12 MONTHS, AND 18 MONTHS AFTER THE DATE OF THE NOTICE OF ACCEPTANCE OF THIS AWC, REGARDING THE EFFECTIVENESS OF THE FIRM'S SUPERVISORY SYSTEM WITH RESPECT TO THE PRICING OF RETAIL CUSTOMER TRANSACTIONS EXECUTED BY THE CREDIT DESK.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE, RESTITUTION, UNDERTAKING, INTEREST 3. Date Initiated (MM/DD/YYYY): 12/16/2014 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2010022691101 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Debt - Corporate Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IN 716 CORPORATE BOND TRANSACTIONS, THE FIRM BOUGHT CORPORATE BONDS FROM CUSTOMERS AND FAILED TO BUY SUCH BONDS AT A PRICE THAT WAS FAIR, TAKING INTO CONSIDERATION ALL RELEVANT CIRCUMSTANCES, INCLUDING MARKET CONDITIONS WITH RESPECT TO EACH BOND AT THE TIME OF THE TRANSACTION, THE EXPENSE INVOLVED AND THAT THE FIRM WAS ENTITLED TO A PROFIT. THE FINDINGS STATED THAT ALL 716 TRANSACTIONS AT ISSUE IN THIS MATTER INVOLVED RETAIL CUSTOMERS SELLING THEIR SENIOR NOTES ISSUED BY A COMPANY TO THE FIRM. THE NOTES WERE DE- LISTED FROM THE NEW YORK STOCK EXCHANGE AFTER A BANKRUPTCY FILING. AFTER THE DE-LISTING, THE NOTES WERE HIGHLY DISTRESSED AND REQUIRED TO BE EXECUTED MANUALLY AT THE FIRM. THE FIRM'S CREDIT DESK PROVIDED BIDS AWAY FROM THE PREVAILING MARKET TO THE FIRM'S SERVICE DESKS, WHICH ULTIMATELY RESULTED IN THE FIRM PURCHASING THE NOTES FROM RETAIL CUSTOMERS AT PRICES BELOW THE PREVAILING MARKET PRICE. MOREOVER, OF THE 716 TRANSACTIONS, 510 OF THESE HAD MARKDOWNS IN EXCESS OF 10 PERCENT. THE FINDINGS ALSO STATED THAT THE FIRM DID NOT HAVE AN ADEQUATE SUPERVISORY SYSTEM IN PLACE TO DETECT WHETHER THE FIRM'S CREDIT DESK EXECUTED A RETAIL CUSTOMER TRANSACTION AT A PRICE CONSISTENT WITH THE PREVAILING MARKET PRICE OF THAT SECURITY. SPECIFICALLY, THE FIRM DID NOT CONDUCT FAIR PRICING POST-TRADE REVIEWS OF THE TRANSACTIONS HERE, OR FAIR PRICING OR BEST EXECUTION POST-TRADE REVIEWS OF OTHER RETAIL CUSTOMER TRADES EXECUTED ON THE CREDIT DESK. AS A RESULT, THE FIRM'S SUPERVISORY SYSTEM DURING THE REVIEW PERIOD WAS DEFICIENT. MOREOVER, THE FIRM'S WRITTEN SUPERVISORY PROCEDURES (WSPS) WERE DEFICIENT, WITH RESPECT TO THE TRANSACTIONS HERE AND OTHER RETAIL CUSTOMER TRADES EXECUTED ON THE CREDIT DESK, BECAUSE THEY DID NOT ESTABLISH: THE IDENTIFICATION OF THE PERSON RESPONSIBLE FOR SUPERVISION WITH RESPECT TO FAIR PRICING AND BEST EXECUTION REVIEWS OF RETAIL CUSTOMER TRANSACTIONS EXECUTED BY THE CREDIT DESK; A STATEMENT OF THE SUPERVISORY STEPS TO BE TAKEN BY THE IDENTIFIED PERSON; A STATEMENT AS TO HOW OFTEN SUCH PERSON SHOULD TAKE SUCH STEPS; AND A STATEMENT AS TO HOW THE COMPLETION OF THE STEPS INCLUDED IN THE WSPS SHOULD BE DOCUMENTED. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 12/16/2014 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 1,900,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: INTEREST; UNDERTAKING: PROVIDE THREE REPORTS, WRITTEN AND ORAL, TO FINRA ON DATES THAT ARE NO MORE THAN SIX MONTHS, 12 MONTHS, AND 18 MONTHS AFTER THE DATE OF THE NOTICE OF ACCEPTANCE OF THIS AWC, REGARDING THE EFFECTIVENESS OF THE FIRM'S SUPERVISORY SYSTEM WITH RESPECT TO THE PRICING OF RETAIL CUSTOMER TRANSACTIONS EXECUTED BY THE CREDIT DESK. Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED, FINED $1,900,000, ORDERED TO PAY RESTITUTION IN THE AMOUNT OF $541,629.19, PLUS INTEREST, AND UNDERTAKES TO PROVIDE THREE REPORTS, WRITTEN AND ORAL, TO FINRA ON DATES THAT ARE NO MORE THAN SIX MONTHS, 12 MONTHS, AND 18 MONTHS AFTER THE DATE OF THE NOTICE OF ACCEPTANCE OF THIS AWC, REGARDING THE EFFECTIVENESS OF THE FIRM'S SUPERVISORY SYSTEM WITH RESPECT TO THE PRICING OF RETAIL CUSTOMER TRANSACTIONS EXECUTED BY THE CREDIT DESK. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED, FINED $1,900,000, ORDERED TO PAY RESTITUTION IN THE AMOUNT OF $541,629.19, PLUS INTEREST, AND UNDERTAKES TO PROVIDE THREE REPORTS, WRITTEN AND ORAL, TO FINRA ON DATES THAT ARE NO MORE THAN SIX MONTHS, 12 MONTHS, AND 18 MONTHS AFTER THE DATE OF THE NOTICE OF ACCEPTANCE OF THIS AWC, REGARDING THE EFFECTIVENESS OF THE FIRM'S SUPERVISORY SYSTEM WITH RESPECT TO THE PRICING OF RETAIL CUSTOMER TRANSACTIONS EXECUTED BY THE CREDIT DESK.
regulatory · block 75PDF pages 303–304
- Regulator name — filed text
- CHICAGO BOARD OPTIONS EXCHANGE'S ("CBOE") BUSINESS CONDUCT COMMITTEE
- How was matter resolved — filed text
- Dismissed
Action status / disposition — filed text
THE CBOE'S BUSINESS CONDUCT COMMITTEE ISSUED A DECISION ON DECEMBER 1, 2014 DISMISSING CHARGES RELATING TO THE ALLEGED VIOLATIONS AGAINST THE FIRM.
Other filed details
Description of allegations — filed text
THE CBOE BUSINESS CONDUCT COMMITTEE ALLEGED THAT DURING THE APPROXIMATE PERIOD FROM ON OR ABOUT MARCH 8, 2010 TO MARCH 31,2010, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (THE "FIRM") VIOLATED EXCHANGE RULE 4.2 AND REG SHO RULE 204(D) IN THAT THE FIRM UNREASONABLY ALLOCATED THE RESPONSIBILITY TO CLOSE-OUT A PORTION OF A FAIL-TO-DELIVER POSITION ON NUMEROUS OCCASIONS TO A BROKER-DEALER CUSTOMER WHEN THAT CUSTOMER HAD ESTABLISHED A PATTERN OF REPEATEDLY FAILING TO CLOSE-OUT PREVIOUS ALLOCATIONS; VIOLATED EXCHANGE RULE 4.2 AND REGULATION SHO RULE 204(A) IN THAT THE FIRM FAILED TO CLOSE OUT A FAIL-TO-DELIVER POSITION ON NUMEROUS OCCASIONS WITHIN THE REQUIRED TIMEFRAME; AND VIOLATED EXCHANGE RULE 4.2 IN THAT THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE ADEQUATE POLICIES AND PROCEDURES FOR DETERMINING THE REASONABLENESS OF FAIL TO DELIVER POSITION ALLOCATIONS TO BE MADE TO BROKER DEALER CUSTOMERS.
Sanction detail — filed text
N/A
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
CHICAGO BOARD OPTIONS EXCHANGE'S ("CBOE") BUSINESS CONDUCT COMMITTEE
2.
Principal Sanction:
Other
Other Sanctions:
N/A
3.
Date Initiated (MM/DD/YYYY):
10/02/2014
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
FILE NO. 14-0144
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE CBOE BUSINESS CONDUCT COMMITTEE ALLEGED THAT DURING THE APPROXIMATE PERIOD FROM ON OR ABOUT MARCH 8, 2010 TO MARCH
31,2010, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (THE "FIRM") VIOLATED EXCHANGE RULE 4.2 AND REG SHO RULE 204(D) IN THAT
THE FIRM UNREASONABLY ALLOCATED THE RESPONSIBILITY TO CLOSE-OUT A PORTION OF A FAIL-TO-DELIVER POSITION ON NUMEROUS OCCASIONS
TO A BROKER-DEALER CUSTOMER WHEN THAT CUSTOMER HAD ESTABLISHED A PATTERN OF REPEATEDLY FAILING TO CLOSE-OUT PREVIOUS
ALLOCATIONS; VIOLATED EXCHANGE RULE 4.2 AND REGULATION SHO RULE 204(A) IN THAT THE FIRM FAILED TO CLOSE OUT A FAIL-TO-DELIVER
POSITION ON NUMEROUS OCCASIONS WITHIN THE REQUIRED TIMEFRAME; AND VIOLATED EXCHANGE RULE 4.2 IN THAT THE FIRM FAILED TO
ESTABLISH, MAINTAIN AND ENFORCE ADEQUATE POLICIES AND PROCEDURES FOR DETERMINING THE REASONABLENESS OF FAIL TO DELIVER POSITION
ALLOCATIONS TO BE MADE TO BROKER DEALER CUSTOMERS.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Dismissed
11. Resolution Date (MM/DD/YYYY):
12/01/2014
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
N/A
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
THE CBOE'S BUSINESS CONDUCT COMMITTEE ISSUED A DECISION ON DECEMBER 1, 2014 DISMISSING CHARGES RELATING TO THE ALLEGED
VIOLATIONS AGAINST THE FIRM.regulatory · block 76BANK OF AMERICA CORPORATIONPDF pages 304–306
- Advisory affiliate name — filed text
- BANK OF AMERICA CORPORATION
- Regulator name — filed text
- SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 20,000,000.00
- How was matter resolved — filed text
- Settled
Action status / disposition — filed text
BAC ADMITTED TO CERTAIN FACTS SET OUT IN AN ANNEX TO THE ADMINISTRATIVE ORDER, ACKNOWLEDGED THAT ITS CONDUCT SET FORTH IN THE ANNEX TO THE ADMINISTRATIVE ORDER VIOLATED THE FEDERAL SECURITIES LAW AND ADMITTED TO THE COMMISSION'S JURISDICTION OVER IT AND THE SUBJECT MATTER OF THE PROCEEDINGS.
Other filed details
Description of allegations — filed text
THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") ALLEGED THAT BANK OF AMERICA CORPORATION ("BAC") FAILED TO MAKE REQUIRED DISCLOSURES IN THE MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS ("MD&A") SECTIONS OF PERIODIC FILINGS, RELATED TO KNOWN UNCERTAINTIES AS TO WHETHER CERTAIN COSTS RELATED TO LOANS BAC WOULD ULTIMATELY BE REQUIRED TO REPURCHASE FROM CERTAIN INSURERS WOULD HAVE A MATERIAL EFFECT ON BAC'S FUTURE INCOME FROM CONTINUING OPERATIONS. THE COMMISSION ALLEGED THAT BAC VIOLATED SECTION 13(A) OF THE EXCHANGE ACT AND RULES 12B-20 AND 13A-13 THEREUNDER.
Sanction detail — filed text
BAC AGREED TO (1) CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTION 13(A) OF THE EXCHANGE ACT AND RULES 12B-20 AND 13A-13 PROMULGATED THEREUNDER; AND (2) PAY A CIVIL MONEY PENALTY OF $20 MILLION.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BANK OF AMERICA
CORPORATION
(For individuals, Last, First,
Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
SECURITIES AND EXCHANGE COMMISSION
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CEASE AND DESIST
3.
Date Initiated (MM/DD/YYYY):
08/21/2014
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
ADMINISTRATIVE PROCEEDING NO. 3-16028
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") ALLEGED THAT BANK OF AMERICA CORPORATION ("BAC") FAILED TO MAKE REQUIRED
DISCLOSURES IN THE MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS ("MD&A") SECTIONS OF PERIODIC FILINGS, RELATED
TO KNOWN UNCERTAINTIES AS TO WHETHER CERTAIN COSTS RELATED TO LOANS BAC WOULD ULTIMATELY BE REQUIRED TO REPURCHASE FROM
CERTAIN INSURERS WOULD HAVE A MATERIAL EFFECT ON BAC'S FUTURE INCOME FROM CONTINUING OPERATIONS. THE COMMISSION ALLEGED THAT
BAC VIOLATED SECTION 13(A) OF THE EXCHANGE ACT AND RULES 12B-20 AND 13A-13 THEREUNDER.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Settled
11. Resolution Date (MM/DD/YYYY):
08/21/2014
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 20,000,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
BAC AGREED TO (1) CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTION 13(A) OF
THE EXCHANGE ACT AND RULES 12B-20 AND 13A-13 PROMULGATED THEREUNDER; AND (2) PAY A CIVIL MONEY PENALTY OF $20 MILLION.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
BAC ADMITTED TO CERTAIN FACTS SET OUT IN AN ANNEX TO THE ADMINISTRATIVE ORDER, ACKNOWLEDGED THAT ITS CONDUCT SET FORTH IN THE
ANNEX TO THE ADMINISTRATIVE ORDER VIOLATED THE FEDERAL SECURITIES LAW AND ADMITTED TO THE COMMISSION'S JURISDICTION OVER IT AND
THE SUBJECT MATTER OF THE PROCEEDINGS.regulatory · block 77PDF pages 306–308
- Regulator name — filed text
- BOX OPTIONS EXCHANGE LLC
- Monetary/Fine Amount — filed text
- $ 5,796,000.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
IN ARRIVING AT THE SANCTIONS, CONSIDERATION HAS BEEN GIVEN TO THE FACT THAT THE FIRM HAS ALREADY TAKEN SIGNIFICANT REMEDIAL ACTION, INCLUDING PROVIDING EXTRAORDINARY COOPERATION WITH THIS INVESTIGATION BY RETAINING OUTSIDE COUNSEL TO CONDUCT A REVIEW AND REPORT ITS FINDINGS TO FINRA PERIODICALLY; ENHANCING ITS LOPR REPORTING SYSTEMS AND WRITTEN SUPERVISORY PROCEDURES; HIRING AN IDEPENDENT CONSULTANT TO CONDUCT A COMPLETE REVIEW OF THE FIRM'S LOPR SYSTEMS AND IDENTIFY ANY ADDITIONAL OR REMAINING DEFICIENCIES; AND CORRECTING THE DEFICIENCIES IDENTIFIED BY THE INDEPENDENT CONSULTANT.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT FROM MAY 2012, WHEN IT BECAME A MEMBER OF BOX, THROUGH NOVEMBER 2013, THE FIRM VIOLATED BOX RULE 3150(A) BY SUBMITTING INACCURATE REPORTS AND FAILING TO SUBMIT REPORTS TO THE LARGE OPTION POSITION REPORTING (LOPR) SYSTEM. THE FINDINGS STATE THAT THE FIRM SUBMITTED INACCURATE REPORTS OR FAILED TO SUBMIT REPORTS TO THE LOPR SYSTEM IN APPROXIMATELY 30,090,400 INSTANCES FROM JANUARY 2010 THROUGH NOVEMBER 2013. THE FINDINGS ALSO STATED THAT FROM MAY 2012, WHEN IT BECAME A MEMBER OF BOX, THROUGH NOVEMBER 2013, THE FIRM FAILED TO ESTABLISH ADEQUATE SYSTEMS OF SUPERVISION, INCLUDING SYSTEMS OF FOLLOW UP AND REVIEW, THAT WERE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH BOX RULE 3150(A) GOVERNING THE REPORTING OF POSITIONS TO THE LOPR SYSTEM. THE FIRM LACKED SUFFICIENT WRITTEN SUPERVISORY PROCEDURES REQUIRING REVIEWS TO DETERMINE ACCURATE AND COMPLETE LOPR SUBMISSIONS. AS A RESULT, THE FIRM FAILED TO DETECT THE ABOVE VIOLATIONS WHEN THEY OCCURRED. INSTEAD, IN MOST INSTANCES, THE VIOLATIONS BECAME KNOWN THROUGH THE REVIEWS CONDUCTED BY THE MARKET REGULATION DEPARTMENT. AS A RESULT, THE FIRM VIOLATED BOX RULES 3010 AND 3070(A).
Sanction detail — filed text
THE FIRM WAS CENSURED, FINED $5,796,000, OF WHICH $1,450,000 SHALL BE PAID TO BOX, AND UNDERTAKES TO, 90 DAYS AFTER THIS LETTER OF CONSENT (LOC) BECOMES FINAL, AND AGAIN 180 DAYS AFTER THIS LOC BECOMES FINAL, THE FIRM SHALL MAKE A WRITTEN SUBMISSION TO BOX IN CARE OF FINRA'S MARKET REGULATION DEPARTMENT REGARDING THEIR IN-CONCERT REPORTING.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) BOX OPTIONS EXCHANGE LLC 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 12/18/2014 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2014-004 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Options Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT FROM MAY 2012, WHEN IT BECAME A MEMBER OF BOX, THROUGH NOVEMBER 2013, THE FIRM VIOLATED BOX RULE 3150(A) BY SUBMITTING INACCURATE REPORTS AND FAILING TO SUBMIT REPORTS TO THE LARGE OPTION POSITION REPORTING (LOPR) SYSTEM. THE FINDINGS STATE THAT THE FIRM SUBMITTED INACCURATE REPORTS OR FAILED TO SUBMIT REPORTS TO THE LOPR SYSTEM IN APPROXIMATELY 30,090,400 INSTANCES FROM JANUARY 2010 THROUGH NOVEMBER 2013. THE FINDINGS ALSO STATED THAT FROM MAY 2012, WHEN IT BECAME A MEMBER OF BOX, THROUGH NOVEMBER 2013, THE FIRM FAILED TO ESTABLISH ADEQUATE SYSTEMS OF SUPERVISION, INCLUDING SYSTEMS OF FOLLOW UP AND REVIEW, THAT WERE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH BOX RULE 3150(A) GOVERNING THE REPORTING OF POSITIONS TO THE LOPR SYSTEM. THE FIRM LACKED SUFFICIENT WRITTEN SUPERVISORY PROCEDURES REQUIRING REVIEWS TO DETERMINE ACCURATE AND COMPLETE LOPR SUBMISSIONS. AS A RESULT, THE FIRM FAILED TO DETECT THE ABOVE VIOLATIONS WHEN THEY OCCURRED. INSTEAD, IN MOST INSTANCES, THE VIOLATIONS BECAME KNOWN THROUGH THE REVIEWS CONDUCTED BY THE MARKET REGULATION DEPARTMENT. AS A RESULT, THE FIRM VIOLATED BOX RULES 3010 AND 3070(A). 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Consent 11. Resolution Date (MM/DD/YYYY): 12/18/2014 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 5,796,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKINGS Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED, FINED $5,796,000, OF WHICH $1,450,000 SHALL BE PAID TO BOX, AND UNDERTAKES TO, 90 DAYS AFTER THIS LETTER OF CONSENT (LOC) BECOMES FINAL, AND AGAIN 180 DAYS AFTER THIS LOC BECOMES FINAL, THE FIRM SHALL MAKE A WRITTEN SUBMISSION TO BOX IN CARE OF FINRA'S MARKET REGULATION DEPARTMENT REGARDING THEIR IN-CONCERT REPORTING. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). IN ARRIVING AT THE SANCTIONS, CONSIDERATION HAS BEEN GIVEN TO THE FACT THAT THE FIRM HAS ALREADY TAKEN SIGNIFICANT REMEDIAL ACTION, INCLUDING PROVIDING EXTRAORDINARY COOPERATION WITH THIS INVESTIGATION BY RETAINING OUTSIDE COUNSEL TO CONDUCT A REVIEW AND REPORT ITS FINDINGS TO FINRA PERIODICALLY; ENHANCING ITS LOPR REPORTING SYSTEMS AND WRITTEN SUPERVISORY PROCEDURES; HIRING AN IDEPENDENT CONSULTANT TO CONDUCT A COMPLETE REVIEW OF THE FIRM'S LOPR SYSTEMS AND IDENTIFY ANY ADDITIONAL OR REMAINING DEFICIENCIES; AND CORRECTING THE DEFICIENCIES IDENTIFIED BY THE INDEPENDENT CONSULTANT.
regulatory · block 78PDF pages 308–310
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 5,796,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
CONSIDERATION HAS BEEN GIVEN TO THE FACT THAT THE FIRM HAS ALREADY TAKEN SIGNIFICANT REMEDIAL ACTION, INCLUDING PROVIDING EXTRAORDINARY COOPERATION WITH THIS INVESTIGATION BY RETAINING OUTSIDE COUNSEL TO CONDUCT A REVIEW AND REPORT ITS FINDINGS TO FINRA PERIODICALLY; ENHANCING ITS LOPR REPORTING SYSTEMS AND WRITTEN SUPERVISORY PROCEDURES; HIRING AN INDEPENDENT CONSULTANT TO CONDUCT A COMPLETE REVIEW OF THE FIRM'S LOPR SYSTEMS AND IDENTIFY ANY ADDITIONAL OR REMAINING DEFICIENCIES; AND CORRECTING THE DEFICIENCIES IDENTIFIED BY THE INDEPENDENT CONSULTANT.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT SUBMITTED INACCURATE REPORTS OR FAILED TO SUBMIT REPORTS TO THE LARGE OPTION POSITION REPORTING (LOPR) SYSTEM IN APPROXIMATELY 30,090,400 INSTANCES FROM JANUARY 2010 THROUGH NOVEMBER 2013. THE FIRM'S CUSTOMERS EXCEEDED POSITION LIMITS FOR THREE SECURITIES FOR PERIODS OF TIME RANGING FROM 11 TO 98 CONSECUTIVE DAYS, AND ONE CUSTOMER EXCEEDED POSITION LIMITS IN A FOURTH SECURITY FOR 44 NON-CONSECUTIVE DAYS. IN ADDITION, FOR ITS PROPRIETARY ACCOUNTS, THE FIRM EXCEEDED A POSITION LIMIT IN ONE SECURITY FOR 11 CONSECUTIVE DAYS AND IN A SECOND SECURITY FOR 13 CONSECUTIVE DAYS. THE FINDINGS FURTHER STATED THAT THE FIRM FAILED TO ESTABLISH ADEQUATE SYSTEMS OF SUPERVISION, INCLUDING SYSTEMS OF FOLLOW UP AND REVIEW, THAT WERE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE RULES GOVERNING THE REPORTING OF POSITIONS TO THE LOPR SYSTEM. THE FIRM LACKED SUFFICIENT WRITTEN SUPERVISORY PROCEDURES REQUIRING REVIEWS TO DETERMINE ACCURATE AND COMPLETE LOPR SUBMISSIONS. AS A RESULT, THE FIRM FAILED TO DETECT THE ABOVE VIOLATIONS WHEN THEY OCCURRED. INSTEAD, IN MOST INSTANCES, THE VIOLATIONS BECAME KNOWN THROUGH THE REVIEWS CONDUCTED BY FINRA.
Sanction detail — filed text
THE FIRM WAS CENSURED, FINED $5,796,000, OF WHICH $1,040,000 SHALL BE PAID TO FINRA, AND UNDERTAKES TO, 90 DAYS AFTER THIS AWC BECOMES FINAL, AND AGAIN 180 DAYS AFTER THIS AWC BECOMES FINAL, MAKE A WRITTEN SUBMISSION TO FINRA REGARDING ITS IN-CONCERT REPORTING.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 12/22/2014 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2012032249301 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Options Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT SUBMITTED INACCURATE REPORTS OR FAILED TO SUBMIT REPORTS TO THE LARGE OPTION POSITION REPORTING (LOPR) SYSTEM IN APPROXIMATELY 30,090,400 INSTANCES FROM JANUARY 2010 THROUGH NOVEMBER 2013. THE FIRM'S CUSTOMERS EXCEEDED POSITION LIMITS FOR THREE SECURITIES FOR PERIODS OF TIME RANGING FROM 11 TO 98 CONSECUTIVE DAYS, AND ONE CUSTOMER EXCEEDED POSITION LIMITS IN A FOURTH SECURITY FOR 44 NON-CONSECUTIVE DAYS. IN ADDITION, FOR ITS PROPRIETARY ACCOUNTS, THE FIRM EXCEEDED A POSITION LIMIT IN ONE SECURITY FOR 11 CONSECUTIVE DAYS AND IN A SECOND SECURITY FOR 13 CONSECUTIVE DAYS. THE FINDINGS FURTHER STATED THAT THE FIRM FAILED TO ESTABLISH ADEQUATE SYSTEMS OF SUPERVISION, INCLUDING SYSTEMS OF FOLLOW UP AND REVIEW, THAT WERE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE RULES GOVERNING THE REPORTING OF POSITIONS TO THE LOPR SYSTEM. THE FIRM LACKED SUFFICIENT WRITTEN SUPERVISORY PROCEDURES REQUIRING REVIEWS TO DETERMINE ACCURATE AND COMPLETE LOPR SUBMISSIONS. AS A RESULT, THE FIRM FAILED TO DETECT THE ABOVE VIOLATIONS WHEN THEY OCCURRED. INSTEAD, IN MOST INSTANCES, THE VIOLATIONS BECAME KNOWN THROUGH THE REVIEWS CONDUCTED BY FINRA. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 12/22/2014 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 5,796,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED, FINED $5,796,000, OF WHICH $1,040,000 SHALL BE PAID TO FINRA, AND UNDERTAKES TO, 90 DAYS AFTER THIS AWC BECOMES FINAL, AND AGAIN 180 DAYS AFTER THIS AWC BECOMES FINAL, MAKE A WRITTEN SUBMISSION TO FINRA REGARDING ITS IN-CONCERT REPORTING. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). CONSIDERATION HAS BEEN GIVEN TO THE FACT THAT THE FIRM HAS ALREADY TAKEN SIGNIFICANT REMEDIAL ACTION, INCLUDING PROVIDING EXTRAORDINARY COOPERATION WITH THIS INVESTIGATION BY RETAINING OUTSIDE COUNSEL TO CONDUCT A REVIEW AND REPORT ITS FINDINGS TO FINRA PERIODICALLY; ENHANCING ITS LOPR REPORTING SYSTEMS AND WRITTEN SUPERVISORY PROCEDURES; HIRING AN INDEPENDENT CONSULTANT TO CONDUCT A COMPLETE REVIEW OF THE FIRM'S LOPR SYSTEMS AND IDENTIFY ANY ADDITIONAL OR REMAINING DEFICIENCIES; AND CORRECTING THE DEFICIENCIES IDENTIFIED BY THE INDEPENDENT CONSULTANT.
regulatory · block 79PDF pages 310–312
- Regulator name — filed text
- NASDAQ OMX PHLX, INC.
- Monetary/Fine Amount — filed text
- $ 5,796,000.00
- How was matter resolved — filed text
- Decision
Action status / disposition — filed text
CONSIDERATION HAS BEEN GIVEN TO THE FACT THAT THE FIRM HAS ALREADY TAKEN SIGNIFICANT REMEDIAL ACTION, INCLUDING PROVIDING EXTRAORDINARY COOPERATION WITH THIS INVESTIGATION BY RETAINING OUTSIDE COUNSEL TO CONDUCT A REVIEW AND REPORT ITS FINDINGS TO FINRA PERIODICALLY; ENHANCING THEIR LOPR REPORTING SYSTEMS AND WRITTEN SUPERVISORY PROCEDURES; HIRING AN INDEPENDENT CONSULTANT TO CONDUCT A COMPLETE REVIEW OF THE FIRM'S LOPR REPORTING SYSTEMS AND IDENTIFY ANY ADDITIONAL OR REMAINING DEFICIENCIES; AND CORRECTING THE DEFICIENCIES IDENTIFIED BY THE INDEPENDENT CONSULTANT.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS OR CONCLUSIONS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE CONCLUSION OF VIOLATIONS OF CERTAIN EXCHANGE RULES. THE FINDINGS STATE THAT, IN VIOLATION OF PHLX RULE 1003(A), THE FIRM SUBMITTED INACCURATE REPORTS OR FAILED TO SUBMIT REPORTS TO THE LARGE OPTION POSITION REPORTING (LOPR) SYSTEM IN APPROXIMATELY 30,090,400 INSTANCES FROM JANUARY 2010 THROUGH NOVEMBER 2013. THE FINDINGS FURTHER STATED THAT, FROM 2008 THROUGH 2013, THE FIRM FAILED TO ESTABLISH ADEQUATE SYSTEMS OF SUPERVISION, INCLUDING SYSTEMS OF FOLLOW UP AND REVIEW, THAT WERE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE RULES GOVERNING THE REPORTING OF POSITIONS TO THE LOPR SYSTEM. FROM 2008 THROUGH 2013, THE FIRM LACKED SUFFICIENT WRITTEN SUPERVISORY PROCEDURES REQUIRING REVIEWS TO DETERMINE ACCURATE AND COMPLETE LOPR SUBMISSIONS. AS A RESULT, THE FIRM FAILED TO DETECT THE ABOVE VIOLATIONS WHEN THEY OCCURRED. THIS CONDUCT CONSTITUTES VIOLATIONS OF PHLX RULE 748(B), (D), (G), AND RULE 748(G)'S SUCCESSOR RULE, RULE 748(H).
Sanction detail — filed text
THE FIRM WAS CENSURED, FINED $5,796,000, OF WHICH $1,856,000 SHALL BE PAID TO PHLX, AND UNDERTAKES TO, 90 DAYS AFTER THIS DECISION BECOMES FINAL, AND AGAIN 180 DAYS AFTER THIS DECISION BECOMES FINAL, MAKE A WRITTEN SUBMISSION TO THE EXCHANGE, IN CARE OF FINRA'S MARKET REGULATION DEPARTMENT, REGARDING THEIR IN-CONCERT REPORTING.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) NASDAQ OMX PHLX, INC. 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 12/22/2014 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2012032249304 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Options Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE ALLEGATIONS OR CONCLUSIONS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE CONCLUSION OF VIOLATIONS OF CERTAIN EXCHANGE RULES. THE FINDINGS STATE THAT, IN VIOLATION OF PHLX RULE 1003(A), THE FIRM SUBMITTED INACCURATE REPORTS OR FAILED TO SUBMIT REPORTS TO THE LARGE OPTION POSITION REPORTING (LOPR) SYSTEM IN APPROXIMATELY 30,090,400 INSTANCES FROM JANUARY 2010 THROUGH NOVEMBER 2013. THE FINDINGS FURTHER STATED THAT, FROM 2008 THROUGH 2013, THE FIRM FAILED TO ESTABLISH ADEQUATE SYSTEMS OF SUPERVISION, INCLUDING SYSTEMS OF FOLLOW UP AND REVIEW, THAT WERE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE RULES GOVERNING THE REPORTING OF POSITIONS TO THE LOPR SYSTEM. FROM 2008 THROUGH 2013, THE FIRM LACKED SUFFICIENT WRITTEN SUPERVISORY PROCEDURES REQUIRING REVIEWS TO DETERMINE ACCURATE AND COMPLETE LOPR SUBMISSIONS. AS A RESULT, THE FIRM FAILED TO DETECT THE ABOVE VIOLATIONS WHEN THEY OCCURRED. THIS CONDUCT CONSTITUTES VIOLATIONS OF PHLX RULE 748(B), (D), (G), AND RULE 748(G)'S SUCCESSOR RULE, RULE 748(H). 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Decision 11. Resolution Date (MM/DD/YYYY): 12/22/2014 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 5,796,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED, FINED $5,796,000, OF WHICH $1,856,000 SHALL BE PAID TO PHLX, AND UNDERTAKES TO, 90 DAYS AFTER THIS DECISION BECOMES FINAL, AND AGAIN 180 DAYS AFTER THIS DECISION BECOMES FINAL, MAKE A WRITTEN SUBMISSION TO THE EXCHANGE, IN CARE OF FINRA'S MARKET REGULATION DEPARTMENT, REGARDING THEIR IN-CONCERT REPORTING. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). CONSIDERATION HAS BEEN GIVEN TO THE FACT THAT THE FIRM HAS ALREADY TAKEN SIGNIFICANT REMEDIAL ACTION, INCLUDING PROVIDING EXTRAORDINARY COOPERATION WITH THIS INVESTIGATION BY RETAINING OUTSIDE COUNSEL TO CONDUCT A REVIEW AND REPORT ITS FINDINGS TO FINRA PERIODICALLY; ENHANCING THEIR LOPR REPORTING SYSTEMS AND WRITTEN SUPERVISORY PROCEDURES; HIRING AN INDEPENDENT CONSULTANT TO CONDUCT A COMPLETE REVIEW OF THE FIRM'S LOPR REPORTING SYSTEMS AND IDENTIFY ANY ADDITIONAL OR REMAINING DEFICIENCIES; AND CORRECTING THE DEFICIENCIES IDENTIFIED BY THE INDEPENDENT CONSULTANT.
regulatory · block 80PDF pages 312–314
- Regulator name — filed text
- NASDAQ OMX BX, INC.
- Monetary/Fine Amount — filed text
- $ 5,796,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
CONSIDERATION HAS BEEN GIVEN TO THE FACT THAT THE FIRM HAS ALREADY TAKEN SIGNIFICANT REMEDIAL ACTION, INCLUDING PROVIDING EXTRAORDINARY COOPERATION WITH THIS INVESTIGATION BY RETAINING OUTSIDE COUNSEL TO CONDUCT A REVIEW AND REPORT ITS FINDINGS TO FINRA PERIODICALLY; ENHANCING ITS LOPR REPORTING SYSTEMS AND WRITTEN SUPERVISORY PROCEDURES; HIRING AN INDEPENDENT CONSULTANT TO CONDUCT A COMPLETE REVIEW OF THE FIRM'S LOPR SYSTEMS AND IDENTIFY ANY ADDITIONAL OR REMAINING DEFICIENCIES; AND CORRECTING THE DEFICIENCIES IDENTIFIED BY THE INDEPENDENT CONSULTANT.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT, IN VIOLATION OF BOX TRADING RULE CHAPTER III, SECTION 10, IT SUBMITTED INACCURATE REPORTS OR FAILED TO SUBMIT REPORTS TO THE LARGE OPTION POSITION REPORTING (LOPR) SYSTEM IN APPROXIMATELY 30,090,400 INSTANCES FROM JANUARY 2010 THROUGH NOVEMBER 2013. THE FINDINGS FURTHER STATED THAT THE FIRM FAILED TO ESTABLISH ADEQUATE SYSTEMS OF SUPERVISION, INCLUDING SYSTEMS OF FOLLOW UP AND REVIEW, THAT WERE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE RULES GOVERNING THE REPORTING OF POSITIONS TO THE LOPR SYSTEM. THE FIRM LACKED SUFFICIENT WRITTEN SUPERVISORY PROCEDURES REQUIRING REVIEWS TO DETERMINE ACCURATE AND COMPLETE LOPR SUBMISSIONS. AS A RESULT, THE FIRM FAILED TO DETECT THE ABOVE VIOLATIONS WHEN THEY OCCURRED. INSTEAD, IN MOST INSTANCES, THE VIOLATIONS BECAME KNOWN THROUGH THE REVIEWS CONDUCTED BY FINRA ON BEHALF OF NASDAQ OMX BX, INC. FOR THIS REASON, THE FIRM VIOLATED CHAPTER III, SECTIONS 1, 2(A), AND 2(A)(I) OF THE BOX TRADING RULES.
Sanction detail — filed text
THE FIRM WAS CENSURED, FINED $5,796,000, OF WHICH $1,450,000 SHALL BE PAID TO NASDAQ OMX BX, INC., AND UNDERTAKES TO, 90 DAYS AFTER THIS AWC BECOMES FINAL, AND AGAIN 180 DAYS AFTER THIS AWC BECOMES FINAL, THE FIRM SHALL MAKE A WRITTEN SUBMISSION TO NASDAQ IN CARE OF FINRA'S MARKET REGULATION DEPARTMENT REGARDING THEIR IN-CONCERT REPORTING.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) NASDAQ OMX BX, INC. 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 12/22/2014 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2012032249302 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Options Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT, IN VIOLATION OF BOX TRADING RULE CHAPTER III, SECTION 10, IT SUBMITTED INACCURATE REPORTS OR FAILED TO SUBMIT REPORTS TO THE LARGE OPTION POSITION REPORTING (LOPR) SYSTEM IN APPROXIMATELY 30,090,400 INSTANCES FROM JANUARY 2010 THROUGH NOVEMBER 2013. THE FINDINGS FURTHER STATED THAT THE FIRM FAILED TO ESTABLISH ADEQUATE SYSTEMS OF SUPERVISION, INCLUDING SYSTEMS OF FOLLOW UP AND REVIEW, THAT WERE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE RULES GOVERNING THE REPORTING OF POSITIONS TO THE LOPR SYSTEM. THE FIRM LACKED SUFFICIENT WRITTEN SUPERVISORY PROCEDURES REQUIRING REVIEWS TO DETERMINE ACCURATE AND COMPLETE LOPR SUBMISSIONS. AS A RESULT, THE FIRM FAILED TO DETECT THE ABOVE VIOLATIONS WHEN THEY OCCURRED. INSTEAD, IN MOST INSTANCES, THE VIOLATIONS BECAME KNOWN THROUGH THE REVIEWS CONDUCTED BY FINRA ON BEHALF OF NASDAQ OMX BX, INC. FOR THIS REASON, THE FIRM VIOLATED CHAPTER III, SECTIONS 1, 2(A), AND 2(A)(I) OF THE BOX TRADING RULES. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 12/22/2014 Exact Explanation If not exact, provide explanation: p p 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 5,796,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKINGS Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED, FINED $5,796,000, OF WHICH $1,450,000 SHALL BE PAID TO NASDAQ OMX BX, INC., AND UNDERTAKES TO, 90 DAYS AFTER THIS AWC BECOMES FINAL, AND AGAIN 180 DAYS AFTER THIS AWC BECOMES FINAL, THE FIRM SHALL MAKE A WRITTEN SUBMISSION TO NASDAQ IN CARE OF FINRA'S MARKET REGULATION DEPARTMENT REGARDING THEIR IN-CONCERT REPORTING. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). CONSIDERATION HAS BEEN GIVEN TO THE FACT THAT THE FIRM HAS ALREADY TAKEN SIGNIFICANT REMEDIAL ACTION, INCLUDING PROVIDING EXTRAORDINARY COOPERATION WITH THIS INVESTIGATION BY RETAINING OUTSIDE COUNSEL TO CONDUCT A REVIEW AND REPORT ITS FINDINGS TO FINRA PERIODICALLY; ENHANCING ITS LOPR REPORTING SYSTEMS AND WRITTEN SUPERVISORY PROCEDURES; HIRING AN INDEPENDENT CONSULTANT TO CONDUCT A COMPLETE REVIEW OF THE FIRM'S LOPR SYSTEMS AND IDENTIFY ANY ADDITIONAL OR REMAINING DEFICIENCIES; AND CORRECTING THE DEFICIENCIES IDENTIFIED BY THE INDEPENDENT CONSULTANT.
regulatory · block 81PDF pages 314–316
- Regulator name — filed text
- NEW HAMPSHIRE BUREAU OF SECURITIES REGULATION ("BUREAU")
- Monetary/Fine Amount — filed text
- $ 350,000.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FACTS OR ALLEGATIONS, THE FIRM CONSENTED TO THE ENTRY OF THE CONSENT ORDER AND CONSENTED TO (I) CEASE AND DESIST FROM FURTHER VIOLATIONS OF N.H. RSA 421-B, (II) PAY THE BUREAU'S COST OF INVESTIGATION IN THE AMOUNT OF $50,000, (III) PAY AN ADMINISTRATIVE FINE OF $350,000, AND (IV) COMPLY WITH ALL OTHER UNDERTAKINGS AND SANCTIONS. SINCE THE INITIATION OF THE BUREAU'S INVESTIGATION, THE FIRM AGREED TO AND COMPLETED ENHANCEMENTS AND PROVIDED EVIDENCE TO THE BUREAU OF THE COMPLETED ENHANCEMENTS TO ITS TELEMARKETING POLICIES AND PROCEDURES.
Other filed details
Description of allegations — filed text
THE BUREAU DETERMINED THAT, IN VIOLATION OF NEW HAMPSHIRE LAW, THE FIRM'S AGENTS LICENSED IN NEW HAMPSHIRE PLACED TELEMARKETING CALLS TO NEW HAMPSHIRE RESIDENTS WHO WERE NOT CLIENTS OF THE FIRM AT THE TIME OF THE CALLS AND WHOSE NUMBERS APPEARED ON THE FIRM'S INTERNAL DO NOT CALL LIST OR ON THE FTC'S NATIONAL DO NOT CALL REGISTRY. FURTHER DURING THE COURSE OF ITS INVESTIGATION, THE BUREAU DETERMINED THAT THE FIRM DID NOT REASONABLY SUPERVISE THE TELEMARKETING ACTIVITIES OF ITS AGENTS LICENSED IN NEW HAMPSHIRE.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FACTS OR ALLEGATIONS, THE FIRM CONSENTED TO THE ENTRY OF THE CONSENT ORDER AND CONSENTED TO (I) CEASE AND DESIST FROM FURTHER VIOLATIONS OF N.H. RSA 421-B, (II) PAY THE BUREAU'S COST OF INVESTIGATION IN THE AMOUNT OF $50,000, (III) PAY AN ADMINISTRATIVE FINE OF $350,000, AND (IV) COMPLY WITH ALL OTHER UNDERTAKINGS AND SANCTIONS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
NEW HAMPSHIRE BUREAU OF SECURITIES REGULATION ("BUREAU")
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CEASE AND DESIST; UNDERTAKING; COST OF INVESTIGATION
3.
Date Initiated (MM/DD/YYYY):
12/29/2014
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
C-2013000010
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE BUREAU DETERMINED THAT, IN VIOLATION OF NEW HAMPSHIRE LAW, THE FIRM'S AGENTS LICENSED IN NEW HAMPSHIRE PLACED TELEMARKETING
CALLS TO NEW HAMPSHIRE RESIDENTS WHO WERE NOT CLIENTS OF THE FIRM AT THE TIME OF THE CALLS AND WHOSE NUMBERS APPEARED ON THE
FIRM'S INTERNAL DO NOT CALL LIST OR ON THE FTC'S NATIONAL DO NOT CALL REGISTRY. FURTHER DURING THE COURSE OF ITS INVESTIGATION, THE
BUREAU DETERMINED THAT THE FIRM DID NOT REASONABLY SUPERVISE THE TELEMARKETING ACTIVITIES OF ITS AGENTS LICENSED IN NEW
HAMPSHIRE.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Order
11. Resolution Date (MM/DD/YYYY):
12/29/2014
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 350,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
$50,000 COSTS OF INVESTIGATION AND CERTAIN UNDERTAKINGS.
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE FACTS OR ALLEGATIONS, THE FIRM CONSENTED TO THE ENTRY OF THE CONSENT ORDER AND CONSENTED
TO (I) CEASE AND DESIST FROM FURTHER VIOLATIONS OF N.H. RSA 421-B, (II) PAY THE BUREAU'S COST OF INVESTIGATION IN THE AMOUNT OF
$50,000, (III) PAY AN ADMINISTRATIVE FINE OF $350,000, AND (IV) COMPLY WITH ALL OTHER UNDERTAKINGS AND SANCTIONS.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE FACTS OR ALLEGATIONS, THE FIRM CONSENTED TO THE ENTRY OF THE CONSENT ORDER AND CONSENTED TO (I)
CEASE AND DESIST FROM FURTHER VIOLATIONS OF N.H. RSA 421-B, (II) PAY THE BUREAU'S COST OF INVESTIGATION IN THE AMOUNT OF $50,000, (III)
PAY AN ADMINISTRATIVE FINE OF $350,000, AND (IV) COMPLY WITH ALL OTHER UNDERTAKINGS AND SANCTIONS. SINCE THE INITIATION OF THE
BUREAU'S INVESTIGATION, THE FIRM AGREED TO AND COMPLETED ENHANCEMENTS AND PROVIDED EVIDENCE TO THE BUREAU OF THE COMPLETED
ENHANCEMENTS TO ITS TELEMARKETING POLICIES AND PROCEDURES.regulatory · block 82PDF pages 316–317
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 175,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED AND FINED $175,000.00.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO TIMELY REPORT WRITTEN CUSTOMER COMPLAINTS AGAINST A REPRESENTATIVE. THE FINDINGS STATED THAT THE FIRM RECEIVED COMPLAINTS ALLEGING MISAPPROPRIATION OF CUSTOMER FUNDS BY THE REPRESENTATIVE BUT FAILED TO DISCLOSE THE COMPLAINTS WITHIN 30 DAYS OF BECOMING AWARE OF THEM. THE REPRESENTATIVE MISAPPROPRIATED OVER 1.7 MILLION FROM FIRM CUSTOMERS.
Sanction detail — filed text
THE FIRM WAS CENSURED AND FINED $175,000.00.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 01/13/2015 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2013037137602 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO TIMELY REPORT WRITTEN CUSTOMER COMPLAINTS AGAINST A REPRESENTATIVE. THE FINDINGS STATED THAT THE FIRM RECEIVED COMPLAINTS ALLEGING MISAPPROPRIATION OF CUSTOMER FUNDS BY THE REPRESENTATIVE BUT FAILED TO DISCLOSE THE COMPLAINTS WITHIN 30 DAYS OF BECOMING AWARE OF THEM. THE REPRESENTATIVE MISAPPROPRIATED OVER 1.7 MILLION FROM FIRM CUSTOMERS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 01/13/2015 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 175,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED AND FINED $175,000.00. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED AND FINED $175,000.00.
regulatory · block 83PDF pages 318–319
- Regulator name — filed text
- CHICAGO BOARD OF TRADE ("CBOT")
- Monetary/Fine Amount — filed text
- $ 25,000.00
- How was matter resolved — filed text
- Settled
Action status / disposition — filed text
IN ACCORDANCE WITH THE SETTLEMENT OFFER, THE COMMITTEE FINED THE FIRM $25,000.
Other filed details
Description of allegations — filed text
PURSUANT TO AN OFFER OF SETTLEMENT IN WHICH THE FIRM NEITHER ADMITTED OR DENIED THE RULE VIOLATION UPON WHICH THE PENALTY IS BASED, ON JUNE 19, 2014, THE CLEARING HOUSE RISK COMMITTEE (THE "COMMITTEE") FOUND THAT THE FIRM VIOLATED CBOT RULE 971.E - PRE- APPROVAL REQUIREMENTS - DISBURSEMENTS NOT MADE FOR CUSTOMER BENEFIT.
Sanction detail — filed text
IN ACCORDANCE WITH THE SETTLEMENT OFFER, THE COMMITTEE FINED THE FIRM $25,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
CHICAGO BOARD OF TRADE ("CBOT")
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
3.
Date Initiated (MM/DD/YYYY):
06/19/2014
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
14-CH-1402
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Futures - Financial
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
PURSUANT TO AN OFFER OF SETTLEMENT IN WHICH THE FIRM NEITHER ADMITTED OR DENIED THE RULE VIOLATION UPON WHICH THE PENALTY IS
BASED, ON JUNE 19, 2014, THE CLEARING HOUSE RISK COMMITTEE (THE "COMMITTEE") FOUND THAT THE FIRM VIOLATED CBOT RULE 971.E - PRE-
APPROVAL REQUIREMENTS - DISBURSEMENTS NOT MADE FOR CUSTOMER BENEFIT.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Settled
11. Resolution Date (MM/DD/YYYY):
06/20/2014
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 25,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
IN ACCORDANCE WITH THE SETTLEMENT OFFER, THE COMMITTEE FINED THE FIRM $25,000.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
IN ACCORDANCE WITH THE SETTLEMENT OFFER, THE COMMITTEE FINED THE FIRM $25,000.regulatory · block 84PDF pages 319–321
- Regulator name — filed text
- ICE FUTURES US
- Monetary/Fine Amount — filed text
- $ 10,000.00
- How was matter resolved — filed text
- Settled
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE VIOLATION OF ANY EXCHANGE RULES, THE FIRM CONSENTED TO A FINE OF $10,000 AND TO CEASE AND DESIST FROM FURTHER VIOLATIONS OF EXCHANGE RULE 27.21(B).
Other filed details
Description of allegations — filed text
A SUBCOMMITTEE OF THE EXCHANGE'S BUSINESS CONDUCT COMMITTEE DETERMINED THAT THE FIRM MAY HAVE VIOLATED EXCHANGE RULE 27.21(B) BY FAILING TO EXPOSE ONE ORDER FOR A MINIMUM OF FIVE (5) SECONDS BEFORE ENTERING THE OPPOSITE ORDER WHEN EXECUTING A CROSS TRADE INVOLVING AN EXCHANGE FUTURE CONTRACT.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE VIOLATION OF ANY EXCHANGE RULES, THE FIRM CONSENTED TO A FINE OF $10,000 AND TO CEASE AND DESIST FROM FURTHER VIOLATIONS OF EXCHANGE RULE 27.21(B).
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) ICE FUTURES US 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CEASE AND DESIST 3. Date Initiated (MM/DD/YYYY): 01/10/2014 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Futures - Financial Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): A SUBCOMMITTEE OF THE EXCHANGE'S BUSINESS CONDUCT COMMITTEE DETERMINED THAT THE FIRM MAY HAVE VIOLATED EXCHANGE RULE 27.21(B) BY FAILING TO EXPOSE ONE ORDER FOR A MINIMUM OF FIVE (5) SECONDS BEFORE ENTERING THE OPPOSITE ORDER WHEN EXECUTING A CROSS TRADE INVOLVING AN EXCHANGE FUTURE CONTRACT. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Settled 11. Resolution Date (MM/DD/YYYY): 01/10/2014 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 10,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE VIOLATION OF ANY EXCHANGE RULES, THE FIRM CONSENTED TO A FINE OF $10,000 AND TO CEASE AND DESIST FROM FURTHER VIOLATIONS OF EXCHANGE RULE 27.21(B). 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE VIOLATION OF ANY EXCHANGE RULES, THE FIRM CONSENTED TO A FINE OF $10,000 AND TO CEASE AND DESIST FROM FURTHER VIOLATIONS OF EXCHANGE RULE 27.21(B).
regulatory · block 85PDF pages 321–323
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 100,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED AND FINED $100.000.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT FOR APPROXIMATELY 13 MONTHS, IT FAILED TO SEND REQUIRED REGULATORY DISCLOSURES AND NOTICES IN CONNECTION WITH THE OPENING OF APPROXIMATELY 12,989 FIRM ACCOUNTS, AND FOR APPROXIMATELY 11 MONTHS, IT FAILED TO CAPTURE A CUSTOMER'S EMPLOYER ADDRESS INFORMATION FOR APPROXIMATELY 345,789 ACCOUNTS. THE FIRM DISCOVERED THAT ITS PLATFORM FAILED TO SEND WELCOME LETTER PACKAGES TO CUSTOMERS AS REQUIRED, BECAUSE THE FIRM DID NOT ACTIVATE A MECHANISM ON THE PLATFORM TO DELIVER THE WELCOME LETTER PACKAGES TO THE ACCOUNTS. AS A RESULT, FOR APPROXIMATELY 13 MONTHS, THE FIRM DID NOT SEND WELCOME LETTER PACKAGES WITH REQUIRED PRIVACY POLICY DISCLOSURES, POLICIES ON PAYMENT FOR ORDER FLOW, AFFILIATE MARKETING NOTICES AND BUSINESS CONTINUITY PLANS TO THE 12,989 NEW ACCOUNTS ENROLLED IN COLLEGE SAVINGS 529 ACCOUNTS, EDUCATION SAVINGS ACCOUNTS OR INDIVIDUAL INVESTOR ACCOUNTS. THE FINDINGS ALSO STATED THAT FOR ALMOST A YEAR, THE FIRM FAILED TO COLLECT EMPLOYER ADDRESSES FOR 345,789 ACCOUNTS OF CUSTOMERS AS REQUIRED BY FINRA RULE 4512.
Sanction detail — filed text
THE FIRM WAS CENSURED AND FINED $100.000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 02/05/2015 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2011028644501 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: UNSPECIFIED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT FOR APPROXIMATELY 13 MONTHS, IT FAILED TO SEND REQUIRED REGULATORY DISCLOSURES AND NOTICES IN CONNECTION WITH THE OPENING OF APPROXIMATELY 12,989 FIRM ACCOUNTS, AND FOR APPROXIMATELY 11 MONTHS, IT FAILED TO CAPTURE A CUSTOMER'S EMPLOYER ADDRESS INFORMATION FOR APPROXIMATELY 345,789 ACCOUNTS. THE FIRM DISCOVERED THAT ITS PLATFORM FAILED TO SEND WELCOME LETTER PACKAGES TO CUSTOMERS AS REQUIRED, BECAUSE THE FIRM DID NOT ACTIVATE A MECHANISM ON THE PLATFORM TO DELIVER THE WELCOME LETTER PACKAGES TO THE ACCOUNTS. AS A RESULT, FOR APPROXIMATELY 13 MONTHS, THE FIRM DID NOT SEND WELCOME LETTER PACKAGES WITH REQUIRED PRIVACY POLICY DISCLOSURES, POLICIES ON PAYMENT FOR ORDER FLOW, AFFILIATE MARKETING NOTICES AND BUSINESS CONTINUITY PLANS TO THE 12,989 NEW ACCOUNTS ENROLLED IN COLLEGE SAVINGS 529 ACCOUNTS, EDUCATION SAVINGS ACCOUNTS OR INDIVIDUAL INVESTOR ACCOUNTS. THE FINDINGS ALSO STATED THAT FOR ALMOST A YEAR, THE FIRM FAILED TO COLLECT EMPLOYER ADDRESSES FOR 345,789 ACCOUNTS OF CUSTOMERS AS REQUIRED BY FINRA RULE 4512. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 02/05/2015 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 100,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED AND FINED $100.000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED AND FINED $100.000.
regulatory · block 86PDF pages 323–325
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 115,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED AND FINED $115,000. IN DETERMINING TO RESOLVE THIS MATTER IN THE MANNER SET FORTH HEREIN, AND IN DETERMINING THE APPROPRIATE MONETARY SANCTION, FINRA TOOK INTO CONSIDERATION THAT THE FIRM SELF-REPORTED THE VIOLATIONS AT ISSUE AFTER CONDUCTING AN INTERNAL INVESTIGATION, AND PROMPTLY TOOK ACTION TO CORRECT THE VIOLATIVE ACTIVITY.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT FOR SETTLEMENT DATES BETWEEN SEPTEMBER 15, 2010 AND FEBRUARY 29, 2012, THE FIRM FAILED TO REPORT 4,200 SHORT INTEREST POSITIONS TOTALING 22,850,177 SHARES, AND ON JUNE 29, 2012, FAILED TO REPORT ONE POSITION TOTALING 4,800 SHARES. THE FINDINGS STATED THAT FOR SETTLEMENT DATES BETWEEN SEPTEMBER 15, 2010 AND FEBRUARY 29, 2012, THE FIRM UNDER-REPORTED ITS SHORT INTEREST POSITIONS IN THAT IT INACCURATELY REPORTED 7,065 SHORT INTEREST POSITIONS TOTALING 3,535,247,474 SHARES, WHEN IT SHOULD HAVE REPORTED 7,065 POSITIONS TOTALING 3,561,396,771 SHARES. THE FINDINGS ALSO STATED THAT THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH FINRA RULE 4560.
Sanction detail — filed text
THE FIRM WAS CENSURED AND FINED $115,000. IN DETERMINING TO RESOLVE THIS MATTER IN THE MANNER SET FORTH HEREIN, AND IN DETERMINING THE APPROPRIATE MONETARY SANCTION, FINRA TOOK INTO CONSIDERATION THAT THE FIRM SELF-REPORTED THE VIOLATIONS AT ISSUE AFTER CONDUCTING AN INTERNAL INVESTIGATION, AND PROMPTLY TOOK ACTION TO CORRECT THE VIOLATIVE ACTIVITY.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 02/12/2015 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2012031807001 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT FOR SETTLEMENT DATES BETWEEN SEPTEMBER 15, 2010 AND FEBRUARY 29, 2012, THE FIRM FAILED TO REPORT 4,200 SHORT INTEREST POSITIONS TOTALING 22,850,177 SHARES, AND ON JUNE 29, 2012, FAILED TO REPORT ONE POSITION TOTALING 4,800 SHARES. THE FINDINGS STATED THAT FOR SETTLEMENT DATES BETWEEN SEPTEMBER 15, 2010 AND FEBRUARY 29, 2012, THE FIRM UNDER-REPORTED ITS SHORT INTEREST POSITIONS IN THAT IT INACCURATELY REPORTED 7,065 SHORT INTEREST POSITIONS TOTALING 3,535,247,474 SHARES, WHEN IT SHOULD HAVE REPORTED 7,065 POSITIONS TOTALING 3,561,396,771 SHARES. THE FINDINGS ALSO STATED THAT THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH FINRA RULE 4560. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 02/12/2015 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 115,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED AND FINED $115,000. IN DETERMINING TO RESOLVE THIS MATTER IN THE MANNER SET FORTH HEREIN, AND IN DETERMINING THE APPROPRIATE MONETARY SANCTION, FINRA TOOK INTO CONSIDERATION THAT THE FIRM SELF-REPORTED THE VIOLATIONS AT ISSUE AFTER CONDUCTING AN INTERNAL INVESTIGATION, AND PROMPTLY TOOK ACTION TO CORRECT THE VIOLATIVE ACTIVITY. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED AND FINED $115,000. IN DETERMINING TO RESOLVE THIS MATTER IN THE MANNER SET FORTH HEREIN, AND IN DETERMINING THE APPROPRIATE MONETARY SANCTION, FINRA TOOK INTO CONSIDERATION THAT THE FIRM SELF-REPORTED THE VIOLATIONS AT ISSUE AFTER CONDUCTING AN INTERNAL INVESTIGATION, AND PROMPTLY TOOK ACTION TO CORRECT THE VIOLATIVE ACTIVITY.
regulatory · block 87PDF pages 325–326
- Regulator name — filed text
- ICE FUTURES US, INC.
- Monetary/Fine Amount — filed text
- $ 5,000.00
- How was matter resolved — filed text
- Other
Action status / disposition — filed text
THE FIRM WAS ISSUED A SUMMARY FINE IN THE AMOUNT OF $5,000 PURSUANT TO EXCHANGE DISCIPLINARY RULE 21.02.
Other filed details
Description of allegations — filed text
ICE FUTURES US, INC. (THE "EXCHANGE") CONCLUDED THAT THE FIRM VIOLATED EXCHANGE RULE 27.12A BY FAILING TO PROVIDE ELECTRONIC AUDIT TRAIL DATA CORRESPONDING TO ONE (1) ORDER THAT WAS ENTERED INTO THE EXCHANGE'S ELECTRONIC TRADE SYSTEM IN AUGUST 2013.
Sanction detail — filed text
THE FIRM WAS ISSUED A SUMMARY FINE IN THE AMOUNT OF $5,000 PURSUANT TO EXCHANGE DISCIPLINARY RULE 21.02.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) ICE FUTURES US, INC. 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 02/11/2015 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2013-051 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Futures - Financial Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): ICE FUTURES US, INC. (THE "EXCHANGE") CONCLUDED THAT THE FIRM VIOLATED EXCHANGE RULE 27.12A BY FAILING TO PROVIDE ELECTRONIC AUDIT TRAIL DATA CORRESPONDING TO ONE (1) ORDER THAT WAS ENTERED INTO THE EXCHANGE'S ELECTRONIC TRADE SYSTEM IN AUGUST 2013. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Other 11. Resolution Date (MM/DD/YYYY): 02/11/2015 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 5,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS ISSUED A SUMMARY FINE IN THE AMOUNT OF $5,000 PURSUANT TO EXCHANGE DISCIPLINARY RULE 21.02. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS ISSUED A SUMMARY FINE IN THE AMOUNT OF $5,000 PURSUANT TO EXCHANGE DISCIPLINARY RULE 21.02.
regulatory · block 88PDF pages 326–328
- Regulator name — filed text
- CHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED BUSINESS CONDUCT COMMITTEE (THE "COMMITTEE")
Action status / disposition — filed text
PLEASE REMOVE THIS DISCLOSURE REPORTING PAGE. THIS MATTER WAS SETTLED AND REPORTED AS PART OF OCCURRENCE 1919669.
Other filed details
Description of allegations — filed text
THE COMMITTEE HAS ALLEGED THAT DURING THE APPROXIMATE PERIOD FROM IN OR ABOUT JANUARY 2009 THROUGH IN OR ABOUT MAY 2013, THE FIRM, ON NUMEROUS OCCASIONS, FAILED TO GRANT PRIORITY TO THE HIGHEST BID AND/OR LOWEST OFFER WHEN SUCH BID OR OFFER WAS AVAILABLE, AND, ON NUMEROUS OCCASIONS, FAILED TO USE DUE DILIGENCE TO EXECUTE ORDERS AT THE BEST PRICES AVAILABLE IN VIOLATION OF EXCHANGE RULES 6.45A, 6.45B AND 6.73. IN ADDITION, DURING THE APPROXIMATE PERIOD FROM IN OR ABOUT JANUARY 2009 THROUGH IN OR ABOUT MAY 2013, THE FIRM FAILED TO ASSURE COMPLIANCE WITH SAID EXCHANGE RULES WHICH CONSTITUTES A VIOLATION OF EXCHANGE RULE 4.2.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) CHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED BUSINESS CONDUCT COMMITTEE (THE "COMMITTEE") 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 02/26/2015 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: STAR NO. 20150442656 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Options Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE COMMITTEE HAS ALLEGED THAT DURING THE APPROXIMATE PERIOD FROM IN OR ABOUT JANUARY 2009 THROUGH IN OR ABOUT MAY 2013, THE FIRM, ON NUMEROUS OCCASIONS, FAILED TO GRANT PRIORITY TO THE HIGHEST BID AND/OR LOWEST OFFER WHEN SUCH BID OR OFFER WAS AVAILABLE, AND, ON NUMEROUS OCCASIONS, FAILED TO USE DUE DILIGENCE TO EXECUTE ORDERS AT THE BEST PRICES AVAILABLE IN VIOLATION OF EXCHANGE RULES 6.45A, 6.45B AND 6.73. IN ADDITION, DURING THE APPROXIMATE PERIOD FROM IN OR ABOUT JANUARY 2009 THROUGH IN OR ABOUT MAY 2013, THE FIRM FAILED TO ASSURE COMPLIANCE WITH SAID EXCHANGE RULES WHICH CONSTITUTES A VIOLATION OF EXCHANGE RULE 4.2. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). PLEASE REMOVE THIS DISCLOSURE REPORTING PAGE. THIS MATTER WAS SETTLED AND REPORTED AS PART OF OCCURRENCE 1919669.
regulatory · block 89PDF pages 328–330
- Regulator name — filed text
- MASSACHUSETTS SECURITIES DIVISION
- Monetary/Fine Amount — filed text
- $ 2,500,000.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
THE CONSENT ORDER ADDRESSES ALLEGATIONS THAT MERRILL LYNCH VIOLATED THE MASSACHUSETTS UNIFORM SECURITIES ACT AND CODE OF MASSACHUSETTS REGULATIONS RESULTING FROM ITS USE OF AN UNAPPROVED INTERNAL PRESENTATION GIVEN TO ITS FINANCIAL ADVISORS.
Other filed details
Description of allegations — filed text
THE CONSENT ORDER ADDRESSES ALLEGATIONS THAT MERRILL LYNCH VIOLATED THE MASSACHUSETTS UNIFORM SECURITIES ACT AND CODE OF MASSACHUSETTS REGULATIONS RESULTING FROM ITS USE OF AN UNAPPROVED INTERNAL PRESENTATION GIVEN TO ITS FINANCIAL ADVISORS.
Sanction detail — filed text
$2,500,000 FINE TO BE PAID BY FIRM WITHIN 20 DAYS OF CONSENT ORDER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) MASSACHUSETTS SECURITIES DIVISION 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CEASE AND DESIST CENSURE UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 01/14/2014 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: E-2014-0002 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: INTERNAL-USE MATERIALS 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE CONSENT ORDER ADDRESSES ALLEGATIONS THAT MERRILL LYNCH VIOLATED THE MASSACHUSETTS UNIFORM SECURITIES ACT AND CODE OF MASSACHUSETTS REGULATIONS RESULTING FROM ITS USE OF AN UNAPPROVED INTERNAL PRESENTATION GIVEN TO ITS FINANCIAL ADVISORS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Consent 11. Resolution Date (MM/DD/YYYY): 03/23/2015 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 2,500,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: COMPLIANCE REVIEW AND REPORT CONCERNING INTERNAL-USE MATERIALS Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: $2,500,000 FINE TO BE PAID BY FIRM WITHIN 20 DAYS OF CONSENT ORDER. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE CONSENT ORDER ADDRESSES ALLEGATIONS THAT MERRILL LYNCH VIOLATED THE MASSACHUSETTS UNIFORM SECURITIES ACT AND CODE OF MASSACHUSETTS REGULATIONS RESULTING FROM ITS USE OF AN UNAPPROVED INTERNAL PRESENTATION GIVEN TO ITS FINANCIAL ADVISORS.
regulatory · block 90BANK OF AMERICA CORPORATIONPDF pages 330–332
- Advisory affiliate name — filed text
- BANK OF AMERICA CORPORATION
- Regulator name — filed text
- BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
- Monetary/Fine Amount — filed text
- $ 205,000,000.00
- How was matter resolved — filed text
- Settled
Action status / disposition — filed text
[CONTINUED FROM 12.C. ABOVE] (F) BAC SHALL NOT IN THE FUTURE DIRECTLY OR INDIRECTLY RETAIN ANY INDIVIDUAL AS AN OFFICER, EMPLOYEE, AGENT, CONSULTANT, OR CONTRACTOR OF BAC OR OF ANY SUBSIDIARY WHO, BASED ON THE INVESTIGATIVE RECORD COMPILED BY U.S. AUTHORITIES, PARTICIPATED IN THE MISCONDUCT UNDERLYING THE ORDER, HAS BEEN SUBJECT TO FORMAL DISCIPLINARY ACTION AS A RESULT OF BAC'S INTERNAL DISCIPLINARY REVIEW OR PERFORMANCE REVIEW IN CONNECTION WITH THE CONDUCT, AND HAS EITHER SEPARATED FROM BAC OR ANY SUBSIDIARY THEREOF OR HAD HIS/HER EMPLOYMENT TERMINATED IN CONNECTION WITH THE CONDUCT. IN SETTLEMENT OF THIS MATTER, BAC CONSENTED AND AGREED TO THE ISSUANCE OF THE ORDER, WHICH THE FRB HAS DETERMINED TO ACCEPT AND HAS ISSUED. THE ALLEGATIONS, DISPOSITIONS, FINDINGS AND SANCTIONS OF THE ORDER ARE DESCRIBED ABOVE IN ITEMS 7 AND 12.
Other filed details
Description of allegations — filed text
ON MAY 20, 2015, THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM ("FRB") ISSUED AN ORDER TO CEASE AND DESIST AND ORDER OF ASSESSMENT OF A CIVIL MONEY PENALTY AGAINST BANK OF AMERICA CORPORATION ("BAC") RELATING TO ITS FOREIGN EXCHANGE ("FX") ACTIVITIES ("ORDER") FROM 2008 THROUGH 2013. THE ORDER STATES THAT (A) BAC LACKED ADEQUATE FIRM-WIDE GOVERNANCE, RISK MANAGEMENT, COMPLIANCE AND AUDIT POLICIES AND PROCEDURES TO ENSURE THAT CERTAIN OF THE FIRM'S FX ACTIVITIES COMPLIED WITH SAFE AND SOUND BANKING PRACTICES, APPLICABLE U.S. LAWS AND REGULATIONS, INCLUDING POLICIES AND PROCEDURES TO PREVENT POTENTIAL VIOLATIONS OF THE U.S. COMMODITIES, ANTITRUST AND CRIMINAL FRAUD LAWS, AND APPLICABLE INTERNAL POLICIES; (B) BAC'S DEFICIENT POLICIES AND PROCEDURES PREVENTED BAC FROM DETECTING AND ADDRESSING PERIODIC CONDUCT BY BANK OF AMERICA, N.A.'S TRADERS RELATING TO CERTAIN COMMUNICATIONS BY THESE TRADERS; AND (C) AS A RESULT OF DEFICIENT POLICIES AND PROCEDURES DESCRIBED ABOVE, BAC ENGAGED IN UNSAFE AND UNSOUND BANKING PRACTICES.
Sanction detail — filed text
IN THE ORDER, BAC AGREED TO PAY A CIVIL MONEY PENALTY IN THE TOTAL AMOUNT OF $205 MILLION AND CONTINUE TO IMPLEMENT ADDITIONAL IMPROVEMENTS IN ITS INTERNAL CONTROLS, COMPLIANCE, RISK MANAGEMENT, AND AUDIT PROGRAMS FOR THE FX ACTIVITIES IN ORDER TO COMPLY WITH BAC POLICIES, SAFE AND SOUND BANKING PRACTICES, AND APPLICABLE U.S. LAWS/REGULATION. SPECIFICALLY, BAC AGREED: (A) BAC SHALL SUBMIT A WRITTEN PLAN TO IMPROVE SENIOR MANAGEMENT'S OVERSIGHT OF BAC'S COMPLIANCE WITH APPLICABLE U.S. LAWS/REGULATIONS AND INTERNAL POLICIES IN CONNECTION WITH CERTAIN WHOLESALE TRADING AND SALES ACTIVITIES; (B) BAC SHALL SUBMIT AN ENHANCED WRITTEN INTERNAL CONTROLS AND COMPLIANCE PROGRAM TO COMPLY WITH APPLICABLE U.S. LAWS/REGULATIONS WITH RESPECT TO CERTAIN WHOLESALE TRADING AND SALES ACTIVITIES; (C) BAC SHALL SUBMIT A WRITTEN PLAN TO IMPROVE ITS COMPLIANCE RISK MANAGEMENT PROGRAM WITH REGARD TO COMPLIANCE WITH APPLICABLE U.S. LAWS/REGULATIONS WITH RESPECT TO CERTAIN WHOLESALE TRADING AND SALES ACTIVITIES; (D) BAC MANAGEMENT SHALL ANNUALLY CONDUCT A REVIEW OF COMPLIANCE POLICIES AND PROCEDURES APPLICABLE TO CERTAIN WHOLESALE TRADING AND SALES ACTIVITIES AND THEIR IMPLEMENTATION AND AN APPROPRIATE RISK-FOCUSED SAMPLING OF OTHER KEY CONTROLS FOR CERTAIN WHOLESALE TRADING AND SALES ACTIVITIES; (E) BAC SHALL SUBMIT AN ENHANCED WRITTEN INTERNAL AUDIT PROGRAM WITH RESPECT TO COMPLIANCE WITH U.S. LAWS/REGULATIONS IN CERTAIN WHOLESALE TRADING AND SALES ACTIVITIES; AND [CONTINUED IN 13. BELOW]
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BANK OF AMERICA
CORPORATION
(For individuals, Last, First,
Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CEASE AND DESIST OTHER REMEDIAL ACTIONS
3.
Date Initiated (MM/DD/YYYY):
05/20/2015
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
15-010-B-HC, 15-010-CMP-HC
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
FOREIGN EXCHANGE
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
ON MAY 20, 2015, THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM ("FRB") ISSUED AN ORDER TO CEASE AND DESIST AND ORDER OF
ASSESSMENT OF A CIVIL MONEY PENALTY AGAINST BANK OF AMERICA CORPORATION ("BAC") RELATING TO ITS FOREIGN EXCHANGE ("FX") ACTIVITIES
("ORDER") FROM 2008 THROUGH 2013. THE ORDER STATES THAT (A) BAC LACKED ADEQUATE FIRM-WIDE GOVERNANCE, RISK MANAGEMENT,
COMPLIANCE AND AUDIT POLICIES AND PROCEDURES TO ENSURE THAT CERTAIN OF THE FIRM'S FX ACTIVITIES COMPLIED WITH SAFE AND SOUND
BANKING PRACTICES, APPLICABLE U.S. LAWS AND REGULATIONS, INCLUDING POLICIES AND PROCEDURES TO PREVENT POTENTIAL VIOLATIONS OF
THE U.S. COMMODITIES, ANTITRUST AND CRIMINAL FRAUD LAWS, AND APPLICABLE INTERNAL POLICIES; (B) BAC'S DEFICIENT POLICIES AND
PROCEDURES PREVENTED BAC FROM DETECTING AND ADDRESSING PERIODIC CONDUCT BY BANK OF AMERICA, N.A.'S TRADERS RELATING TO CERTAIN
COMMUNICATIONS BY THESE TRADERS; AND (C) AS A RESULT OF DEFICIENT POLICIES AND PROCEDURES DESCRIBED ABOVE, BAC ENGAGED IN UNSAFE
AND UNSOUND BANKING PRACTICES.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Settled
11. Resolution Date (MM/DD/YYYY):
05/20/2015
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 205,000,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
REMEDIAL ACTIONS
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
IN THE ORDER, BAC AGREED TO PAY A CIVIL MONEY PENALTY IN THE TOTAL AMOUNT OF $205 MILLION AND CONTINUE TO IMPLEMENT
ADDITIONAL IMPROVEMENTS IN ITS INTERNAL CONTROLS, COMPLIANCE, RISK MANAGEMENT, AND AUDIT PROGRAMS FOR THE FX ACTIVITIES IN
ORDER TO COMPLY WITH BAC POLICIES, SAFE AND SOUND BANKING PRACTICES, AND APPLICABLE U.S. LAWS/REGULATION. SPECIFICALLY, BAC
AGREED: (A) BAC SHALL SUBMIT A WRITTEN PLAN TO IMPROVE SENIOR MANAGEMENT'S OVERSIGHT OF BAC'S COMPLIANCE WITH APPLICABLE
U.S. LAWS/REGULATIONS AND INTERNAL POLICIES IN CONNECTION WITH CERTAIN WHOLESALE TRADING AND SALES ACTIVITIES; (B) BAC SHALL
SUBMIT AN ENHANCED WRITTEN INTERNAL CONTROLS AND COMPLIANCE PROGRAM TO COMPLY WITH APPLICABLE U.S. LAWS/REGULATIONS
WITH RESPECT TO CERTAIN WHOLESALE TRADING AND SALES ACTIVITIES; (C) BAC SHALL SUBMIT A WRITTEN PLAN TO IMPROVE ITS
COMPLIANCE RISK MANAGEMENT PROGRAM WITH REGARD TO COMPLIANCE WITH APPLICABLE U.S. LAWS/REGULATIONS WITH RESPECT TO
CERTAIN WHOLESALE TRADING AND SALES ACTIVITIES; (D) BAC MANAGEMENT SHALL ANNUALLY CONDUCT A REVIEW OF COMPLIANCE POLICIES
AND PROCEDURES APPLICABLE TO CERTAIN WHOLESALE TRADING AND SALES ACTIVITIES AND THEIR IMPLEMENTATION AND AN APPROPRIATE
RISK-FOCUSED SAMPLING OF OTHER KEY CONTROLS FOR CERTAIN WHOLESALE TRADING AND SALES ACTIVITIES; (E) BAC SHALL SUBMIT AN
ENHANCED WRITTEN INTERNAL AUDIT PROGRAM WITH RESPECT TO COMPLIANCE WITH U.S. LAWS/REGULATIONS IN CERTAIN WHOLESALE
TRADING AND SALES ACTIVITIES; AND [CONTINUED IN 13. BELOW]
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
[CONTINUED FROM 12.C. ABOVE] (F) BAC SHALL NOT IN THE FUTURE DIRECTLY OR INDIRECTLY RETAIN ANY INDIVIDUAL AS AN OFFICER, EMPLOYEE,
AGENT, CONSULTANT, OR CONTRACTOR OF BAC OR OF ANY SUBSIDIARY WHO, BASED ON THE INVESTIGATIVE RECORD COMPILED BY U.S. AUTHORITIES,
PARTICIPATED IN THE MISCONDUCT UNDERLYING THE ORDER, HAS BEEN SUBJECT TO FORMAL DISCIPLINARY ACTION AS A RESULT OF BAC'S INTERNAL
DISCIPLINARY REVIEW OR PERFORMANCE REVIEW IN CONNECTION WITH THE CONDUCT, AND HAS EITHER SEPARATED FROM BAC OR ANY SUBSIDIARY
THEREOF OR HAD HIS/HER EMPLOYMENT TERMINATED IN CONNECTION WITH THE CONDUCT. IN SETTLEMENT OF THIS MATTER, BAC CONSENTED AND
AGREED TO THE ISSUANCE OF THE ORDER, WHICH THE FRB HAS DETERMINED TO ACCEPT AND HAS ISSUED. THE ALLEGATIONS, DISPOSITIONS,
FINDINGS AND SANCTIONS OF THE ORDER ARE DESCRIBED ABOVE IN ITEMS 7 AND 12.regulatory · block 91MERRILL LYNCH PROFESSIONAL CLEARING CORP.PDF pages 332–334
- Advisory affiliate name — filed text
- MERRILL LYNCH PROFESSIONAL CLEARING CORP.
- Regulator name — filed text
- UNITED STATES SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 9,000,000.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
IN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS, RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT (THE "OFFER") WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. MERRILL ADMITS THE FINDINGS, ACKNOWLEDGES THAT ITS CONDUCT VIOLATED THE FEDERAL SECURITIES LAWS, ADMITS THE COMMISSION'S JURISDICTION OVER IT AND THE SUBJECT MATTER OF THESE PROCEEDINGS, AND CONSENTS TO THE ENTRY OF THIS ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTIONS 15(B) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER. ACCORDINGLY, IT IS HEREBY ORDERED THAT THE RESPONDENT CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF RULE 203(B) OF REGULATION SHO AND IS CENSURED. RESPONDENT SHALL, WITHIN FIFTEEN (15) DAYS OF THE ENTRY OF THIS ORDER, PAY DISGORGEMENT, WHICH REPRESENTS PROFITS GAINED AS A RESULT OF THE CONDUCT, OF $1,566,245.67 AND PREJUDGMENT INTEREST OF $334,564.65 TO THE SECURITIES AND EXCHANGE COMMISSION. RESPONDENT SHALL, WITHIN FIFTEEN (15) DAYS OF THE ENTRY OF THIS ORDER, PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $9 MILLION TO THE SECURITIES AND EXCHANGE COMMISSION. RESPONDENT SHALL COMPLY WITH THE UNDERTAKINGS ENUMERATED IN THE OFFER OF SETTLEMENT.
Other filed details
Description of allegations — filed text
ON JUNE 1, 2015, PURSUANT TO SEC ADMINISTRATIVE RELEASE 34-75083 THE SECURITIES AND EXCHANGE COMMISSION ANNOUNCED THAT PUBLIC ADMINISTRATIVE AND CEASE AND DESIST PROCEEDINGS WERE INSTITUTED AGAINST MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH") AND MERRILL LYNCH PROFESSIONAL CLEARING CORP. ("MLPRO") (COLLECTIVE, "MERRILL') FOR VIOLATIONS OF RULE 203(B) OF REGULATION SHO IN CONNECTION WITH ITS PRACTICES RELATED TO ITS EXECUTION OF SHORT SALES. THE VIOLATIONS AROSE FROM TWO SEPARATE ISSUES WITH RESPECT TO MERRILL'S USE OF ITS EASY TO BORROW LIST ("ETB LIST") IN CONNECTION WITH THE EXECUTION OF SHORT SALE TRANSACTIONS. FIRST, MERRILL'S EXECUTION PLATFORMS CONTINUED TO ACCEPT SHORT SALES ORDERS IN RELIANCE ON THE FIRM'S ETB LIST AS THE SOURCE OF THE LOCATE AFTER HAVING LEARNED OF FACTS INDICATING THAT SUCH RELIANCE WAS NO LONGER REASONABLE. AS A CONSEQUENCE, MERRILL'S CONDUCTED VIOLATED RULE 203(B) OF REG SHO IN THAT MERRILL LACKED THE REQUISITE REASONABLE GROUNDS TO BELIEVE THE AFFECTED SECURITIES COULD BE BORROWED FOR DELIVERY ON DELIVERY DATE AS REQUIRED BY THE RULE. IN ADDITION, BY RECORDING THE ETB LIST AS THE LOCATE SOURCE IN INSTANCES WHERE MERRILL HAD DETERMINED THAT SUCH WAS NO LONGER REASONABLE, MERRILL FAILED TO DOCUMENT AN APPROPRIATE LOCATE AS REQUIRED BY THE RULE. SECOND, THERE WERE IN CERTAIN INSTANCES IN WHICH MERRILL UTILIZED DATA THAT WAS MORE THAN 24 HOURS OLD TO CONSTRUCT ITS ETB LIST, WHICH, AT TIMES, RESULTED IN SECURITIES BEING INCLUDED ON THE ETB LIST WHEN THEY OTHERWISE SHOULD NOT HAVE BEEN. MERRILL LYNCH AND MLPRO HAVE CONSENTED TO (A) CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF RULE 203(B) OF REGULATION SHO; (B) BE CENSURED; (C) PAY DISGORGEMENT OF $1.56 MILLION PLUS PREJUDGMENT INTEREST; (D) PAY A CIVIL MONETARY PENALTY OF $9 MILLION; AND (E) COMPLY WITH CERTAIN UNDERTAKINGS, INCLUDING RETAINING AN INDEPENDENT CONSULTANT WITHIN THIRTY (30) DAYS OF ENTRY OF THE ADMINISTRATIVE ORDER TO CONDUCT A REVIEW OF THEIR POLICIES, PROCEDURES AND PRACTICES WITH RESPECT TO THEIR ACCEPTANCE OF SHORT SALE ORDERS FOR EXECUTION IN RELIANCE ON THE FIRM'S ETB LIST AND PROCEDURES TO MONITOR COMPLIANCE THEREWITH TO SATISFY CERTAIN OF ITS OBLIGATIONS UNDER RULE 203(B) OF REGULATION SHO.
Sanction detail — filed text
RESPONDENT SHALL CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF RULE 203(B) OF REGULATION SHO, IS CENSURED, SHALL PAY DISGORGEMENT OF $1,566,245.67 AND PREJUDGMENT INTEREST OF $334,564.65, AND PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $9 MILLION TO THE SECURITIES AND EXCHANGE COMMISSION. RESPONDENT SHALL COMPLY WITH THE UNDERTAKINGS ENUMERATED IN THE OFFER OF SETTLEMENT.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
g
y
g
y
(
)
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
16139
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
MERRILL LYNCH
PROFESSIONAL CLEARING
CORP.
(For individuals, Last, First,
Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
DISGORGEMENT; CEASE AND DESIST; CENSURE; UNDERTAKING; PREJUDGMENT INTEREST
3.
Date Initiated (MM/DD/YYYY):
06/01/2015
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
3-16567
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
UNSPECIFIED SECURITIES
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
ON JUNE 1, 2015, PURSUANT TO SEC ADMINISTRATIVE RELEASE 34-75083 THE SECURITIES AND EXCHANGE COMMISSION ANNOUNCED THAT PUBLIC
ADMINISTRATIVE AND CEASE AND DESIST PROCEEDINGS WERE INSTITUTED AGAINST MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
("MERRILL LYNCH") AND MERRILL LYNCH PROFESSIONAL CLEARING CORP. ("MLPRO") (COLLECTIVE, "MERRILL') FOR VIOLATIONS OF RULE 203(B) OF
REGULATION SHO IN CONNECTION WITH ITS PRACTICES RELATED TO ITS EXECUTION OF SHORT SALES. THE VIOLATIONS AROSE FROM TWO SEPARATE
ISSUES WITH RESPECT TO MERRILL'S USE OF ITS EASY TO BORROW LIST ("ETB LIST") IN CONNECTION WITH THE EXECUTION OF SHORT SALE
TRANSACTIONS. FIRST, MERRILL'S EXECUTION PLATFORMS CONTINUED TO ACCEPT SHORT SALES ORDERS IN RELIANCE ON THE FIRM'S ETB LIST AS THE
SOURCE OF THE LOCATE AFTER HAVING LEARNED OF FACTS INDICATING THAT SUCH RELIANCE WAS NO LONGER REASONABLE. AS A CONSEQUENCE,
MERRILL'S CONDUCTED VIOLATED RULE 203(B) OF REG SHO IN THAT MERRILL LACKED THE REQUISITE REASONABLE GROUNDS TO BELIEVE THE
AFFECTED SECURITIES COULD BE BORROWED FOR DELIVERY ON DELIVERY DATE AS REQUIRED BY THE RULE. IN ADDITION, BY RECORDING THE ETB
LIST AS THE LOCATE SOURCE IN INSTANCES WHERE MERRILL HAD DETERMINED THAT SUCH WAS NO LONGER REASONABLE, MERRILL FAILED TO
DOCUMENT AN APPROPRIATE LOCATE AS REQUIRED BY THE RULE. SECOND, THERE WERE IN CERTAIN INSTANCES IN WHICH MERRILL UTILIZED DATA
THAT WAS MORE THAN 24 HOURS OLD TO CONSTRUCT ITS ETB LIST, WHICH, AT TIMES, RESULTED IN SECURITIES BEING INCLUDED ON THE ETB LIST
WHEN THEY OTHERWISE SHOULD NOT HAVE BEEN. MERRILL LYNCH AND MLPRO HAVE CONSENTED TO (A) CEASE AND DESIST FROM COMMITTING OR
CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF RULE 203(B) OF REGULATION SHO; (B) BE CENSURED; (C) PAY DISGORGEMENT OF $1.56
MILLION PLUS PREJUDGMENT INTEREST; (D) PAY A CIVIL MONETARY PENALTY OF $9 MILLION; AND (E) COMPLY WITH CERTAIN UNDERTAKINGS,
INCLUDING RETAINING AN INDEPENDENT CONSULTANT WITHIN THIRTY (30) DAYS OF ENTRY OF THE ADMINISTRATIVE ORDER TO CONDUCT A REVIEW
OF THEIR POLICIES, PROCEDURES AND PRACTICES WITH RESPECT TO THEIR ACCEPTANCE OF SHORT SALE ORDERS FOR EXECUTION IN RELIANCE ON
THE FIRM'S ETB LIST AND PROCEDURES TO MONITOR COMPLIANCE THEREWITH TO SATISFY CERTAIN OF ITS OBLIGATIONS UNDER RULE 203(B) OF
REGULATION SHO.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Order
11. Resolution Date (MM/DD/YYYY):
06/01/2015
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 9,000,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
UNDERTAKINGS AND PREJUDGMENT INTEREST
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
RESPONDENT SHALL CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF RULE 203(B) OF
REGULATION SHO, IS CENSURED, SHALL PAY DISGORGEMENT OF $1,566,245.67 AND PREJUDGMENT INTEREST OF $334,564.65, AND PAY A CIVIL
MONEY PENALTY IN THE AMOUNT OF $9 MILLION TO THE SECURITIES AND EXCHANGE COMMISSION. RESPONDENT SHALL COMPLY WITH THE
UNDERTAKINGS ENUMERATED IN THE OFFER OF SETTLEMENT.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
IN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS, RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT (THE "OFFER") WHICH THE
COMMISSION HAS DETERMINED TO ACCEPT. MERRILL ADMITS THE FINDINGS, ACKNOWLEDGES THAT ITS CONDUCT VIOLATED THE FEDERAL SECURITIES
LAWS, ADMITS THE COMMISSION'S JURISDICTION OVER IT AND THE SUBJECT MATTER OF THESE PROCEEDINGS, AND CONSENTS TO THE ENTRY OF THIS
ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTIONS 15(B) AND 21C OF THE SECURITIES EXCHANGE
ACT OF 1934, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER. ACCORDINGLY, IT IS HEREBY ORDERED
THAT THE RESPONDENT CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF RULE 203(B) OF
REGULATION SHO AND IS CENSURED. RESPONDENT SHALL, WITHIN FIFTEEN (15) DAYS OF THE ENTRY OF THIS ORDER, PAY DISGORGEMENT, WHICH
REPRESENTS PROFITS GAINED AS A RESULT OF THE CONDUCT, OF $1,566,245.67 AND PREJUDGMENT INTEREST OF $334,564.65 TO THE SECURITIES
AND EXCHANGE COMMISSION. RESPONDENT SHALL, WITHIN FIFTEEN (15) DAYS OF THE ENTRY OF THIS ORDER, PAY A CIVIL MONEY PENALTY IN THE
AMOUNT OF $9 MILLION TO THE SECURITIES AND EXCHANGE COMMISSION. RESPONDENT SHALL COMPLY WITH THE UNDERTAKINGS ENUMERATED IN
THE OFFER OF SETTLEMENT.regulatory · block 92PDF pages 334–336
- Regulator name — filed text
- NYSE ARCA, INC.
- Monetary/Fine Amount — filed text
- $ 300,000.00
- How was matter resolved — filed text
- Decision & Order of Offer of Settlement
Action status / disposition — filed text
THE FIRM WAS CENSURED, FINED $300,000, AND UNDERTAKES TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES AND DESIGN REASONABLE SURVEILLANCE SYSTEMS WITH RESPECT TO PREVENTING AND DETECTING VIOLATIONS OF RULE 105 BY RETAIL CUSTOMERS.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT VIOLATED NYSE ARCA EQUITIES RULE 6.18 BY FAILING TO ESTABLISH AND MAINTAIN A SYSTEM OF SUPERVISION THAT WAS REASONABLY DESIGNED TO ENSURE FULL COMPLIANCE WITH RULE 105 BY ITS CUSTOMERS. THE FINDINGS STATED AS A RESULT THE FIRM'S RETAIL CUSTOMERS EFFECTED SHORT SALES DURING RULE 105'S RESTRICTED PERIOD AND BOUGHT SHARES OF THE SAME SECURITIES FROM THE FIRM IN FOLLOW-ON OFFERINGS. THE FIRM FAILED TO TAKE REASONABLE STEPS TO PREVENT OR IDENTIFY THE TRANSACTIONS. THE FINDINGS ALSO STATED THAT THE FIRM VIOLATED ARCA EQUITIES RULE 6.18 WITH RESPECT TO ITS INSTITUTIONAL CUSTOMERS' COMPLIANCE WITH RULE 105 IN THAT IT RELIED ON A THIRD-PARTY VENDOR THAT, IN SOME INSTANCES, PROVIDED INACCURATE DATA, WHICH THE FIRM USED TO CALCULATE THE RESTRICTED PERIOD FOR SURVEILLANCE PURPOSES.
Sanction detail — filed text
THE FIRM WAS CENSURED, FINED $300,000, AND UNDERTAKES TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES AND DESIGN REASONABLE SURVEILLANCE SYSTEMS WITH RESPECT TO PREVENTING AND DETECTING VIOLATIONS OF RULE 105 BY RETAIL CUSTOMERS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) NYSE ARCA, INC. 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 05/27/2015 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2011027872601 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT VIOLATED NYSE ARCA EQUITIES RULE 6.18 BY FAILING TO ESTABLISH AND MAINTAIN A SYSTEM OF SUPERVISION THAT WAS REASONABLY DESIGNED TO ENSURE FULL COMPLIANCE WITH RULE 105 BY ITS CUSTOMERS. THE FINDINGS STATED AS A RESULT THE FIRM'S RETAIL CUSTOMERS EFFECTED SHORT SALES DURING RULE 105'S RESTRICTED PERIOD AND BOUGHT SHARES OF THE SAME SECURITIES FROM THE FIRM IN FOLLOW-ON OFFERINGS. THE FIRM FAILED TO TAKE REASONABLE STEPS TO PREVENT OR IDENTIFY THE TRANSACTIONS. THE FINDINGS ALSO STATED THAT THE FIRM VIOLATED ARCA EQUITIES RULE 6.18 WITH RESPECT TO ITS INSTITUTIONAL CUSTOMERS' COMPLIANCE WITH RULE 105 IN THAT IT RELIED ON A THIRD-PARTY VENDOR THAT, IN SOME INSTANCES, PROVIDED INACCURATE DATA, WHICH THE FIRM USED TO CALCULATE THE RESTRICTED PERIOD FOR SURVEILLANCE PURPOSES. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Decision & Order of Offer of Settlement 11. Resolution Date (MM/DD/YYYY): 05/27/2015 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 300,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED, FINED $300,000, AND UNDERTAKES TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES AND DESIGN REASONABLE SURVEILLANCE SYSTEMS WITH RESPECT TO PREVENTING AND DETECTING VIOLATIONS OF RULE 105 BY RETAIL CUSTOMERS. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED, FINED $300,000, AND UNDERTAKES TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES AND DESIGN REASONABLE SURVEILLANCE SYSTEMS WITH RESPECT TO PREVENTING AND DETECTING VIOLATIONS OF RULE 105 BY RETAIL CUSTOMERS.
regulatory · block 93PDF pages 336–338
- Regulator name — filed text
- NYSE ARCA, INC.
- Monetary/Fine Amount — filed text
- $ 417,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THIS MATTER IS RELATED TO PROCEEDING NUMBER 20110277298.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS, THE HEARING OFFICER ACCEPTED THE OFFER OF SETTLEMENT AND CONSENT AND ISSUED A DECISION. A FINRA HEARING OFFICER CONSIDERED AN OFFER OF SETTLEMENT AND CONSENT ENTERED INTO BETWEEN FINRA ON BEHALF OF NYSE REGULATION, INC. AND THE FIRM. THE FIRM VIOLATED 17A-3(A)(6)(1) THEREUNDER, AND NYSE ARCA OPTIONS RULES 6.68(A)(8), 6.69, 11.1(B), 11.16(A), AND 11.18(A) BY FAILING TO PLACE THE CORRECT ORIGIN CODES ON ORDERS. THE FIRM ALSO VIOLATED NYSE ARCA OPTIONS RULE 11.18 BY FAILING TO PROVIDE AN ADEQUATE SYSTEM OF SUPERVISION, INCLUDING WRITTEN PROCEDURES AND A SYSTEM OF FOLLOW-UP AND REVIEW, WITH RESPECT TO COMPLIANCE WITH NYSE ARCA OPTIONS RULES AND POLICIES GOVERNING THE USE OF ACCOUNT ORIGIN CODES ON ORDERS. DURING THE REVIEW PERIOD, THE FIRM VIOLATED CERTAIN NYSE ARCA OPTIONS RULES AND FEDERAL SECURITIES LAWS WHEN ENTERING AND EXECUTING CERTAIN ORDERS ON BEHALF OF ITS BROKER-DEALER CLIENTS. THE FIRM IMPROPERLY MARKED NUMEROUS OPTIONS ORDERS WITH INCORRECT ORIGIN CODES AND SENT THOSE ORDERS TO THE EXCHANGE THROUGH VARIOUS ORDER ENTRY SYSTEMS EMPLOYED BY THE FIRM TO SEND OPTIONS ORDERS, RESULTING IN: TRANSACTIONS EXECUTED BY THE FIRM THAT MAY HAVE TRADED AHEAD OF OTHER ORDERS ENTITLED TO EXECUTION PRIORITY; POTENTIAL ADVERSE IMPACT TO THE EXECUTION PRICE AND QUANTITY OF OTHER MARKET PARTICIPANTS' ORDERS; AN INACCURATE AUDIT TRAIL AND INACCURATE ORDER RECORDS; TRADES BEING REPORTED TO THE OPTIONS CLEARING CORPORATION ("OCC") WITH INACCURATE TRADE DETAILS; AND AN ADVERSE IMPACT TO THE EXCHANGE'S ABILITY TO SURVEIL FOR AND DETECT POTENTIAL VIOLATIONS OF ITS RULES AND OF FEDERAL SECURITIES LAWS. ADDITIONALLY, IT WAS CONCLUDED THAT THE FIRM HAD SUPERVISORY DEFICIENCIES RELATED TO THESE MATTERS.
Sanction detail — filed text
THE FIRM IS CENSURED AND JOINTLY AND SEVERALLY FINED $417,000. ALSO, THE FIRM SHALL UNDERTAKE AT INTERVALS OF 90, 180, 270, AND 360 DAYS AFTER THE DATE OF THIS DECISION MAKE A WRITTEN SUBMISSION TO NYSE REGULATION, INC., IN CARE OF FINRA, REGARDING ITS COMPLIANCE WITH THE EXCHANGE'S RULES AND POLICIES GOVERNING THE INCLUSION OF ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION DATA. THE FINE MUST BE PAID WITHIN 30 DAYS OF THE DATE OF THIS DECISION OR THE FIRM MAY FACE SUSPENSION, PURSUANT TO THE TERMS OF THE DECISION AND NYSE ARCA OPTIONS RULE 13.2(A).
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
NYSE ARCA, INC.
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE; UNDERTAKING
3.
Date Initiated (MM/DD/YYYY):
05/27/2015
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
2011027729901
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Options
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS, THE HEARING OFFICER ACCEPTED THE OFFER OF SETTLEMENT AND CONSENT AND
ISSUED A DECISION. A FINRA HEARING OFFICER CONSIDERED AN OFFER OF SETTLEMENT AND CONSENT ENTERED INTO BETWEEN FINRA ON BEHALF OF
NYSE REGULATION, INC. AND THE FIRM. THE FIRM VIOLATED 17A-3(A)(6)(1) THEREUNDER, AND NYSE ARCA OPTIONS RULES 6.68(A)(8), 6.69, 11.1(B),
11.16(A), AND 11.18(A) BY FAILING TO PLACE THE CORRECT ORIGIN CODES ON ORDERS. THE FIRM ALSO VIOLATED NYSE ARCA OPTIONS RULE 11.18
BY FAILING TO PROVIDE AN ADEQUATE SYSTEM OF SUPERVISION, INCLUDING WRITTEN PROCEDURES AND A SYSTEM OF FOLLOW-UP AND REVIEW,
WITH RESPECT TO COMPLIANCE WITH NYSE ARCA OPTIONS RULES AND POLICIES GOVERNING THE USE OF ACCOUNT ORIGIN CODES ON ORDERS.
DURING THE REVIEW PERIOD, THE FIRM VIOLATED CERTAIN NYSE ARCA OPTIONS RULES AND FEDERAL SECURITIES LAWS WHEN ENTERING AND
EXECUTING CERTAIN ORDERS ON BEHALF OF ITS BROKER-DEALER CLIENTS. THE FIRM IMPROPERLY MARKED NUMEROUS OPTIONS ORDERS WITH
INCORRECT ORIGIN CODES AND SENT THOSE ORDERS TO THE EXCHANGE THROUGH VARIOUS ORDER ENTRY SYSTEMS EMPLOYED BY THE FIRM TO SEND
OPTIONS ORDERS, RESULTING IN: TRANSACTIONS EXECUTED BY THE FIRM THAT MAY HAVE TRADED AHEAD OF OTHER ORDERS ENTITLED TO EXECUTION
PRIORITY; POTENTIAL ADVERSE IMPACT TO THE EXECUTION PRICE AND QUANTITY OF OTHER MARKET PARTICIPANTS' ORDERS; AN INACCURATE AUDIT
TRAIL AND INACCURATE ORDER RECORDS; TRADES BEING REPORTED TO THE OPTIONS CLEARING CORPORATION ("OCC") WITH INACCURATE TRADE
DETAILS; AND AN ADVERSE IMPACT TO THE EXCHANGE'S ABILITY TO SURVEIL FOR AND DETECT POTENTIAL VIOLATIONS OF ITS RULES AND OF FEDERAL
SECURITIES LAWS. ADDITIONALLY, IT WAS CONCLUDED THAT THE FIRM HAD SUPERVISORY DEFICIENCIES RELATED TO THESE MATTERS.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
05/27/2015
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 417,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
UNDERTAKING
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE FIRM IS CENSURED AND JOINTLY AND SEVERALLY FINED $417,000. ALSO, THE FIRM SHALL UNDERTAKE AT INTERVALS OF 90, 180, 270, AND
360 DAYS AFTER THE DATE OF THIS DECISION MAKE A WRITTEN SUBMISSION TO NYSE REGULATION, INC., IN CARE OF FINRA, REGARDING ITS
COMPLIANCE WITH THE EXCHANGE'S RULES AND POLICIES GOVERNING THE INCLUSION OF ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION
DATA. THE FINE MUST BE PAID WITHIN 30 DAYS OF THE DATE OF THIS DECISION OR THE FIRM MAY FACE SUSPENSION, PURSUANT TO THE TERMS
OF THE DECISION AND NYSE ARCA OPTIONS RULE 13.2(A).
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
THIS MATTER IS RELATED TO PROCEEDING NUMBER 20110277298.regulatory · block 94PDF pages 338–340
- Regulator name — filed text
- UNITED STATES SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 500,000.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
IN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS, RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT (THE "OFFER") WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. SOLELY FOR THE PURPOSE OF THESE PROCEEDINGS AND ANY OTHER PROCEEDINGS BROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TO WHICH THE COMMISSION IS A PARTY, AND WITHOUT ADMITTING OR DENYING THE FINDINGS, EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER IT AND THE SUBJECT MATTER OF THESE PROCEEDINGS, WHICH ARE ADMITTED, RESPONDENT CONSENTS TO THE ENTRY OF THIS ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933 AND SECTION 15(B) OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND- DESIST ORDER. IN VIEW OF THE FOREGOING, THE COMMISSION DEEMS IT APPROPRIATE AND IN THE PUBLIC INTEREST TO IMPOSE THE SANCTIONS AGREED TO IN RESPONDENT'S OFFER. ACCORDINGLY, IT IS HEREBY ORDERED THAT RESPONDENT SHALL, CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF 17(A)(2) OF THE SECURITIES ACT; WITHIN TEN (10) DAYS OF THE ENTRY OF THIS ORDER, PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $500,000 TO THE SECURITIES AND EXCHANGE COMMISSION; AND RETAIN AN INDEPENDENT CONSULTANT TO CONDUCT A REVIEW OF RESPONDENT'S POLICIES AND PROCEDURES AS THEY RELATE TO MUNICIPAL SECURITIES UNDERWRITING DUE DILIGENCE.
Other filed details
Description of allegations — filed text
SEC ADMIN RELEASES 33-9833; 34-75227, JUNE 18, 2015: THE SECURITIES AND EXCHANGE COMMISSION DEEMS IT APPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED AGAINST MERRILL LYNCH, PIERCE, FENNER & SMITH, INCORPORATED ("RESPONDENT"). RESPONDENT WILLFULLY VIOLATED SECTION 17(A)(2) OF THE SECURITIES ACT. RESPONDENT, A REGISTERED BROKER-DEALER, CONDUCTED INADEQUATE DUE DILIGENCE IN CERTAIN OFFERINGS AND AS A RESULT, FAILED TO FORM A REASONABLE BASIS FOR BELIEVING THE TRUTHFULNESS OF THE ASSERTIONS BY THESE ISSUERS AND/OR OBLIGORS REGARDING THEIR COMPLIANCE WITH PREVIOUS CONTINUING DISCLOSURE UNDERTAKINGS PURSUANT TO RULE 15C2-12. THIS RESULTED IN RESPONDENT OFFERING AND SELLING MUNICIPAL SECURITIES ON THE BASIS OF MATERIALLY MISLEADING DISCLOSURE DOCUMENTS. THE VIOLATIONS WERE SELF-REPORTED BY RESPONDENT TO THE COMMISSION PURSUANT TO THE DIVISION OF ENFORCEMENT'S (THE "DIVISION") MUNICIPALITIES CONTINUING DISCLOSURE COOPERATION (MCDC) INITIATIVE.
Sanction detail — filed text
THE RESPONDENT SHALL CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTION 17(A) (2) OF THE SECURITIES ACT, PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $500,000 AND COMPLY WITH THE UNDERTAKINGS ENUMERATED IN THE OFFER OF SETTLEMENT.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CEASE AND DESIST;UNDERTAKING
3.
Date Initiated (MM/DD/YYYY):
06/18/2015
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
3-16626
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Debt - Municipal
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
SEC ADMIN RELEASES 33-9833; 34-75227, JUNE 18, 2015: THE SECURITIES AND EXCHANGE COMMISSION DEEMS IT APPROPRIATE AND IN THE PUBLIC
INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED AGAINST MERRILL LYNCH, PIERCE,
FENNER & SMITH, INCORPORATED ("RESPONDENT"). RESPONDENT WILLFULLY VIOLATED SECTION 17(A)(2) OF THE SECURITIES ACT. RESPONDENT, A
REGISTERED BROKER-DEALER, CONDUCTED INADEQUATE DUE DILIGENCE IN CERTAIN OFFERINGS AND AS A RESULT, FAILED TO FORM A REASONABLE
BASIS FOR BELIEVING THE TRUTHFULNESS OF THE ASSERTIONS BY THESE ISSUERS AND/OR OBLIGORS REGARDING THEIR COMPLIANCE WITH
PREVIOUS CONTINUING DISCLOSURE UNDERTAKINGS PURSUANT TO RULE 15C2-12. THIS RESULTED IN RESPONDENT OFFERING AND SELLING
MUNICIPAL SECURITIES ON THE BASIS OF MATERIALLY MISLEADING DISCLOSURE DOCUMENTS. THE VIOLATIONS WERE SELF-REPORTED BY
RESPONDENT TO THE COMMISSION PURSUANT TO THE DIVISION OF ENFORCEMENT'S (THE "DIVISION") MUNICIPALITIES CONTINUING DISCLOSURE
COOPERATION (MCDC) INITIATIVE.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Order
11. Resolution Date (MM/DD/YYYY):
06/18/2015
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 500,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
UNDERTAKINGS
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE RESPONDENT SHALL CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTION 17(A)
(2) OF THE SECURITIES ACT, PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $500,000 AND COMPLY WITH THE UNDERTAKINGS ENUMERATED IN
THE OFFER OF SETTLEMENT.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
IN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS, RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT (THE "OFFER") WHICH THE
COMMISSION HAS DETERMINED TO ACCEPT. SOLELY FOR THE PURPOSE OF THESE PROCEEDINGS AND ANY OTHER PROCEEDINGS BROUGHT BY OR ON
BEHALF OF THE COMMISSION, OR TO WHICH THE COMMISSION IS A PARTY, AND WITHOUT ADMITTING OR DENYING THE FINDINGS, EXCEPT AS TO THE
COMMISSION'S JURISDICTION OVER IT AND THE SUBJECT MATTER OF THESE PROCEEDINGS, WHICH ARE ADMITTED, RESPONDENT CONSENTS TO THE
ENTRY OF THIS ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF
1933 AND SECTION 15(B) OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-
DESIST ORDER. IN VIEW OF THE FOREGOING, THE COMMISSION DEEMS IT APPROPRIATE AND IN THE PUBLIC INTEREST TO IMPOSE THE SANCTIONS
AGREED TO IN RESPONDENT'S OFFER. ACCORDINGLY, IT IS HEREBY ORDERED THAT RESPONDENT SHALL, CEASE AND DESIST FROM COMMITTING OR
CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF 17(A)(2) OF THE SECURITIES ACT; WITHIN TEN (10) DAYS OF THE ENTRY OF THIS ORDER,
PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $500,000 TO THE SECURITIES AND EXCHANGE COMMISSION; AND RETAIN AN INDEPENDENT
CONSULTANT TO CONDUCT A REVIEW OF RESPONDENT'S POLICIES AND PROCEDURES AS THEY RELATE TO MUNICIPAL SECURITIES UNDERWRITING
DUE DILIGENCE.regulatory · block 95PDF pages 340–342
- Regulator name — filed text
- NASDAQ OMX BX, INC.
- Monetary/Fine Amount — filed text
- $ 315,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED, JOINTLY AND SEVERALLY FINED $9,000,000, OF WHICH $315,000 SHALL BE PAID TO THE NASDAQ OMX BX, INC., AND UNDERTAKES TO, AT INTERVALS OF 90, 180, 270, AND 360 DAYS AFTER ACCEPTANCE OF THIS AWC, MAKE A WRITTEN SUBMISSION TO THE NASDAQ OMX BX, INC., IN CARE OF FINRA, REGARDING ITS COMPLIANCE WITH THE NASDAQ OMX BX, INC.'S RULES AND POLICIES GOVERNING THE INCLUSION OF ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION DATA.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT WHEN TRADING ON THE BOSTON OPTIONS EXCHANGE (BOX) AS A FACILITY OF THE NASDAQ OMX BX, INC. CEASED, THE FIRM EXECUTED NUMEROUS TRANSACTIONS WITH INCORRECT ORIGIN CODES ACROSS MULTIPLE MARKETS, INCLUDING THE NASDAQ OMX BX, INC. THE FIRM'S EXECUTION OF ORDERS WITH INCORRECT ORIGIN CODES RESULTED FROM CERTAIN ACCOUNTS HAVING BEEN ON-BOARDED WITH INCORRECT ORIGIN CODES IN THEIR RESPECTIVE ACCOUNT PROFILES, LIMITATIONS IN ITS ORDER MANAGEMENT SYSTEM THAT FAILED TO INCLUDE ALL POTENTIAL ORIGIN CODE DESIGNATIONS OR DEFAULTED TO AN IMPROPER ORIGIN CODE AT VARIOUS POINTS DURING THE REVIEW PERIOD, AND FROM ERRORS MADE BY THE FIRM'S EMPLOYEES WHEN PLACING ORIGIN CODES ON ORDERS AT THE POINT OF ORDER ACCEPTANCE, ENTRY, OR EXECUTION. THE FINDINGS STATED THAT DESPITE THE FACT THAT THE FIRM TRADED MILLIONS OF CONTRACTS BY EXECUTING ORDERS WITH INCORRECT ORIGIN CODES, THE FIRM LACKED PROCEDURES FOR ENSURING ORDERS HAD BEEN ENTERED WITH CORRECT ORIGIN CODES, AND FOR CONDUCTING REVIEWS TO DETECT THAT ORDERS HAD BEEN ENTERED AND EXECUTED WITH INCORRECT ORIGIN CODES. INSTEAD, THE FIRM ONLY LEARNED ABOUT MISREPRESENTED ORDERS IN ISOLATION AND THEN ADDRESSED EACH INSTANCE IN ISOLATION AND ON AN AD HOC BASIS. THE FINDINGS ALSO STATED THAT DESPITE THE KNOWLEDGE THAT THE FIRM HAD OF THE USE OF INCORRECT ORIGIN CODES, THE FIRM DID NOT TAKE MEASURES TO ENSURE THAT IT EXECUTED ORDERS WITH CORRECT ORIGIN CODES, OR TO DETECT INSTANCES IN WHICH IT HAD EXECUTED ORDERS WITH INCORRECT ORIGIN CODES. THE FINDINGS ALSO INCLUDED THAT ALTHOUGH THE FIRM BEGAN TAKING STEPS TO ADDRESS THE EXECUTION OF ORDERS WITH INCORRECT ORIGIN CODES AFTER CONDUCTING A REVIEW THAT LED TO THE CREATION AND IMPLEMENTATION OF EXCEPTION REPORTS TO IDENTIFY INSTANCES IN WHICH IT HAD EXECUTED ORDERS WITH INCORRECT ORIGIN CODES, IT STILL CONTINUED TRADING HUNDREDS OF THOUSANDS OF CONTRACTS EACH YEAR WITH INCORRECT ORIGIN CODES, WHEN TRADING ON BOX AS A FACILITY OF THE NASDAQ OMX BX, INC. CEASED. FINRA FOUND THAT EACH INSTANCE IN WHICH THE FIRM EXECUTED AN ORDER WITH AN INCORRECT ORIGIN CODE COULD HAVE HAD ADVERSE CONSEQUENCES, SUCH AS CREATING INACCURATE ORDER RECORDS, CREATING AN INACCURATE AUDIT TRAIL, REPORTING TRADES TO THE OPTIONS CLEARING CORPORATION (OCC) WITH INACCURATE TRADE DETAILS, AND ADVERSELY IMPACTING THE NASDAQ OMX BX, INC.'S ABILITY TO SURVEIL FOR AND DETECT POTENTIAL VIOLATIONS OF ITS RULES AND FEDERAL SECURITIES LAWS. FINRA ALSO FOUND THAT THE FIRM FAILED TO HAVE SUPERVISORY SYSTEMS AND CONTROLS IN PLACE, INCLUDING A SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE NASDAQ OMX BX, INC.'S ORIGIN CODE REQUIREMENTS.
Sanction detail — filed text
THE FIRM WAS CENSURED, JOINTLY AND SEVERALLY FINED $9,000,000, OF WHICH $315,000 SHALL BE PAID TO THE NASDAQ OMX BX, INC., AND UNDERTAKES TO, AT INTERVALS OF 90, 180, 270, AND 360 DAYS AFTER ACCEPTANCE OF THIS AWC, MAKE A WRITTEN SUBMISSION TO THE NASDAQ OMX BX, INC., IN CARE OF FINRA, REGARDING ITS COMPLIANCE WITH THE NASDAQ OMX BX, INC.'S RULES AND POLICIES GOVERNING THE INCLUSION OF ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION DATA.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) NASDAQ OMX BX, INC. 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 06/23/2015 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2011027729903 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Options Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT WHEN TRADING ON THE BOSTON OPTIONS EXCHANGE (BOX) AS A FACILITY OF THE NASDAQ OMX BX, INC. CEASED, THE FIRM EXECUTED NUMEROUS TRANSACTIONS WITH INCORRECT ORIGIN CODES ACROSS MULTIPLE MARKETS, INCLUDING THE NASDAQ OMX BX, INC. THE FIRM'S EXECUTION OF ORDERS WITH INCORRECT ORIGIN CODES RESULTED FROM CERTAIN ACCOUNTS HAVING BEEN ON-BOARDED WITH INCORRECT ORIGIN CODES IN THEIR RESPECTIVE ACCOUNT PROFILES, LIMITATIONS IN ITS ORDER MANAGEMENT SYSTEM THAT FAILED TO INCLUDE ALL POTENTIAL ORIGIN CODE DESIGNATIONS OR DEFAULTED TO AN IMPROPER ORIGIN CODE AT VARIOUS POINTS DURING THE REVIEW PERIOD, AND FROM ERRORS MADE BY THE FIRM'S EMPLOYEES WHEN PLACING ORIGIN CODES ON ORDERS AT THE POINT OF ORDER ACCEPTANCE, ENTRY, OR EXECUTION. THE FINDINGS STATED THAT DESPITE THE FACT THAT THE FIRM TRADED MILLIONS OF CONTRACTS BY EXECUTING ORDERS WITH INCORRECT ORIGIN CODES, THE FIRM LACKED PROCEDURES FOR ENSURING ORDERS HAD BEEN ENTERED WITH CORRECT ORIGIN CODES, AND FOR CONDUCTING REVIEWS TO DETECT THAT ORDERS HAD BEEN ENTERED AND EXECUTED WITH INCORRECT ORIGIN CODES. INSTEAD, THE FIRM ONLY LEARNED ABOUT MISREPRESENTED ORDERS IN ISOLATION AND THEN ADDRESSED EACH INSTANCE IN ISOLATION AND ON AN AD HOC BASIS. THE FINDINGS ALSO STATED THAT DESPITE THE KNOWLEDGE THAT THE FIRM HAD OF THE USE OF INCORRECT ORIGIN CODES, THE FIRM DID NOT TAKE MEASURES TO ENSURE THAT IT EXECUTED ORDERS WITH CORRECT ORIGIN CODES, OR TO DETECT INSTANCES IN WHICH IT HAD EXECUTED ORDERS WITH INCORRECT ORIGIN CODES. THE FINDINGS ALSO INCLUDED THAT ALTHOUGH THE FIRM BEGAN TAKING STEPS TO ADDRESS THE EXECUTION OF ORDERS WITH INCORRECT ORIGIN CODES AFTER CONDUCTING A REVIEW THAT LED TO THE CREATION AND IMPLEMENTATION OF EXCEPTION REPORTS TO IDENTIFY INSTANCES IN WHICH IT HAD EXECUTED ORDERS WITH INCORRECT ORIGIN CODES, IT STILL CONTINUED TRADING HUNDREDS OF THOUSANDS OF CONTRACTS EACH YEAR WITH INCORRECT ORIGIN CODES, WHEN TRADING ON BOX AS A FACILITY OF THE NASDAQ OMX BX, INC. CEASED. FINRA FOUND THAT EACH INSTANCE IN WHICH THE FIRM EXECUTED AN ORDER WITH AN INCORRECT ORIGIN CODE COULD HAVE HAD ADVERSE CONSEQUENCES, SUCH AS CREATING INACCURATE ORDER RECORDS, CREATING AN INACCURATE AUDIT TRAIL, REPORTING TRADES TO THE OPTIONS CLEARING CORPORATION (OCC) WITH INACCURATE TRADE DETAILS, AND ADVERSELY IMPACTING THE NASDAQ OMX BX, INC.'S ABILITY TO SURVEIL FOR AND DETECT POTENTIAL VIOLATIONS OF ITS RULES AND FEDERAL SECURITIES LAWS. FINRA ALSO FOUND THAT THE FIRM FAILED TO HAVE SUPERVISORY SYSTEMS AND CONTROLS IN PLACE, INCLUDING A SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE NASDAQ OMX BX, INC.'S ORIGIN CODE REQUIREMENTS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 06/23/2015 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 315,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED, JOINTLY AND SEVERALLY FINED $9,000,000, OF WHICH $315,000 SHALL BE PAID TO THE NASDAQ OMX BX, INC., AND UNDERTAKES TO, AT INTERVALS OF 90, 180, 270, AND 360 DAYS AFTER ACCEPTANCE OF THIS AWC, MAKE A WRITTEN SUBMISSION TO THE NASDAQ OMX BX, INC., IN CARE OF FINRA, REGARDING ITS COMPLIANCE WITH THE NASDAQ OMX BX, INC.'S RULES AND POLICIES GOVERNING THE INCLUSION OF ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION DATA. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED, JOINTLY AND SEVERALLY FINED $9,000,000, OF WHICH $315,000 SHALL BE PAID TO THE NASDAQ OMX BX, INC., AND UNDERTAKES TO, AT INTERVALS OF 90, 180, 270, AND 360 DAYS AFTER ACCEPTANCE OF THIS AWC, MAKE A WRITTEN SUBMISSION TO THE NASDAQ OMX BX, INC., IN CARE OF FINRA, REGARDING ITS COMPLIANCE WITH THE NASDAQ OMX BX, INC.'S RULES AND POLICIES GOVERNING THE INCLUSION OF ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION DATA.
regulatory · block 96PDF pages 342–344
- Regulator name — filed text
- NYSE MKT LLC
- Monetary/Fine Amount — filed text
- $ 868,000.00
- How was matter resolved — filed text
- Stipulation and Consent
Action status / disposition — filed text
HEARING OFFICER DECISION RENDERED MAY 27, 2015; THEREFORE THE FIRM IS CENSURED AND FINED JOINTLY AND SEVERALLY FINED $868,000. IN ADDITION, THE FIRM SHALL UNDERTAKE AT INTERVALS OF 90, 180, 270, AND 360 DAYS AFTER THE DATE OF THIS DECISION TO MAKE A WRITTEN SUBMISSION TO NYSE REGULATION, INC., IN CARE OF FINRA, REGARDING ITS COMPLIANCE WITH THE EXCHANGE'S RULES AND POLICIES GOVERNING THE INCLUSION OF ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION DATA. THE FIRM VIOLATED EXCHANGE RULES 16, 153, 324, 955(C)(1), 956NY(A)(8), 957NY(E), 963NY(A) AND (B), AND 964NY(B)(2)(A), AS WELL AS SECTION 17(A)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 AND SEC RULE 17A-3(A)(6)(I) THEREUNDER BY MISREPRESENTING OPTIONS ORDERS EXECUTED ON THE EXCHANGE WITH INACCURATE ACCOUNT ORIGIN CODES. RESPONDENT ALSO VIOLATED EXCHANGE RULE 320 BY FAILING TO REASONABLY SUPERVISE AND IMPLEMENT ADEQUATE CONTROLS, INCLUDING SEPARATE SYSTEMS OF FOLLOW-UP AND REVIEW, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE EXCHANGE'S RULES AND POLICIES GOVERNING THE USE OF ACCOUNT ORIGIN CODES. THE DECISION BECAME FINAL AT THE CLOSE OF BUSINESS ON JUNE 22, 2015. THIS PROCEEDING INCLUDES PROCEEDING NUMBER 20110277298.
Other filed details
Description of allegations — filed text
A FINRA HEARING OFFICER CONSIDERED A STIPULATION OF FACTS AND CONSENT TO PENALTY ENTERED INTO BETWEEN FINRA ON BEHALF OF NYSE REGULATION, INC. AND THE FIRM. WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS, THE FIRM STIPULATED TO THE FACTS AND FINDINGS THAT THE FIRM VIOLATED EXCHANGE RULES 16, 153, 324, 955(C)(1), 956NY(A)(8), 957NY(E), 963NY(A) AND (B), AND 964NY(B)(2)(A), AS WELL AS SECTION 17(A)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 AND SEC RULE 17A-3(A)(6)(I) THEREUNDER BY MISREPRESENTING OPTIONS ORDERS EXECUTED ON THE EXCHANGE WITH INACCURATE ACCOUNT ORIGIN CODES. RESPONDENT ALSO VIOLATED EXCHANGE RULE 320 BY FAILING TO REASONABLY SUPERVISE AND IMPLEMENT ADEQUATE CONTROLS, INCLUDING SEPARATE SYSTEMS OF FOLLOW-UP AND REVIEW, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE EXCHANGE'S RULES AND POLICIES GOVERNING THE USE OF ACCOUNT ORIGIN CODES. DURING THE REVIEW THE FIRM VIOLATED CERTAIN NYSE MKT RULES AND FEDERAL SECURITIES LAWS WHEN ENTERING AND EXECUTING CERTAIN ORDERS ON BEHALF OF THEIR BROKER-DEALER CLIENTS. THE FIRM IMPROPERLY MARKED NUMEROUS OPTIONS ORDERS WITH INCORRECT ORIGIN CODES AND SENT THOSE ORDERS TO THE EXCHANGE THROUGH VARIOUS ORDER ENTRY SYSTEMS EMPLOYED BY THE FIRM TO SEND OPTIONS ORDERS, RESULTING IN THE FOLLOWING: TRANSACTIONS EXECUTED BY THE FIRM THAT MAY HAVE TRADED AHEAD OF OTHER ORDERS ENTITLED TO EXECUTION PRIORITY; POTENTIAL ADVERSE IMPACT TO THE EXECUTION PRICE AND QUANTITY OF OTHER MARKET PARTICIPANTS' ORDERS; AN INACCURATE AUDIT TRAIL AND INACCURATE ORDER RECORDS; TRADES BEING REPORTED TO THE OPTIONS CLEARING CORPORATION ("OCC") WITH INACCURATE TRADE DETAILS; AND AN ADVERSE IMPACT TO THE EXCHANGE'S ABILITY TO SURVEIL FOR AND DETECT POTENTIAL VIOLATIONS OF ITS RULES AND OF FEDERAL SECURITIES LAWS. ADDITIONALLY, IT WAS CONCLUDED THAT THE FIRM HAD SUPERVISORY DEFICIENCIES RELATED TO THESE MATTERS.
Sanction detail — filed text
THE FIRM IS CENSURED AND FINED JOINTLY AND SEVERALLY FINED $868,000. IN ADDITION, THE FIRM SHALL UNDERTAKE AT INTERVALS OF 90, 180, 270, AND 360 DAYS AFTER THE DATE OF THIS DECISION TO MAKE A WRITTEN SUBMISSION TO NYSE REGULATION, INC., IN CARE OF FINRA, REGARDING ITS COMPLIANCE WITH THE EXCHANGE'S RULES AND POLICIES GOVERNING THE INCLUSION OF ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION DATA. THE FINE WILL BE PAYABLE ON THE DATE ON WHICH THE DECISION BECOMES FINAL. THE FIRM IS REQUIRED TO PAY THE FINE WITHIN 45 DAYS OF THAT DATE, OR IT MAY FACE SUMMARY SUSPENSION, PURSUANT TO NYSE RULE 476(K).
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
NYSE MKT LLC
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE; UNDERTAKING
3.
Date Initiated (MM/DD/YYYY):
05/27/2015
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
2011027729902
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Options
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
A FINRA HEARING OFFICER CONSIDERED A STIPULATION OF FACTS AND CONSENT TO PENALTY ENTERED INTO BETWEEN FINRA ON BEHALF OF NYSE
REGULATION, INC. AND THE FIRM. WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS, THE FIRM STIPULATED TO THE FACTS AND
FINDINGS THAT THE FIRM VIOLATED EXCHANGE RULES 16, 153, 324, 955(C)(1), 956NY(A)(8), 957NY(E), 963NY(A) AND (B), AND 964NY(B)(2)(A), AS
WELL AS SECTION 17(A)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 AND SEC RULE 17A-3(A)(6)(I) THEREUNDER BY MISREPRESENTING OPTIONS
ORDERS EXECUTED ON THE EXCHANGE WITH INACCURATE ACCOUNT ORIGIN CODES. RESPONDENT ALSO VIOLATED EXCHANGE RULE 320 BY FAILING
TO REASONABLY SUPERVISE AND IMPLEMENT ADEQUATE CONTROLS, INCLUDING SEPARATE SYSTEMS OF FOLLOW-UP AND REVIEW, REASONABLY
DESIGNED TO ACHIEVE COMPLIANCE WITH THE EXCHANGE'S RULES AND POLICIES GOVERNING THE USE OF ACCOUNT ORIGIN CODES. DURING THE
REVIEW THE FIRM VIOLATED CERTAIN NYSE MKT RULES AND FEDERAL SECURITIES LAWS WHEN ENTERING AND EXECUTING CERTAIN ORDERS ON
BEHALF OF THEIR BROKER-DEALER CLIENTS. THE FIRM IMPROPERLY MARKED NUMEROUS OPTIONS ORDERS WITH INCORRECT ORIGIN CODES AND SENT
THOSE ORDERS TO THE EXCHANGE THROUGH VARIOUS ORDER ENTRY SYSTEMS EMPLOYED BY THE FIRM TO SEND OPTIONS ORDERS, RESULTING IN THE
FOLLOWING: TRANSACTIONS EXECUTED BY THE FIRM THAT MAY HAVE TRADED AHEAD OF OTHER ORDERS ENTITLED TO EXECUTION PRIORITY;
POTENTIAL ADVERSE IMPACT TO THE EXECUTION PRICE AND QUANTITY OF OTHER MARKET PARTICIPANTS' ORDERS; AN INACCURATE AUDIT TRAIL AND
INACCURATE ORDER RECORDS; TRADES BEING REPORTED TO THE OPTIONS CLEARING CORPORATION ("OCC") WITH INACCURATE TRADE DETAILS; AND
AN ADVERSE IMPACT TO THE EXCHANGE'S ABILITY TO SURVEIL FOR AND DETECT POTENTIAL VIOLATIONS OF ITS RULES AND OF FEDERAL SECURITIES
LAWS. ADDITIONALLY, IT WAS CONCLUDED THAT THE FIRM HAD SUPERVISORY DEFICIENCIES RELATED TO THESE MATTERS.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Stipulation and Consent
11. Resolution Date (MM/DD/YYYY):
06/22/2015
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 868,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
UNDERTAKING
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE FIRM IS CENSURED AND FINED JOINTLY AND SEVERALLY FINED $868,000. IN ADDITION, THE FIRM SHALL UNDERTAKE AT INTERVALS OF 90,
180, 270, AND 360 DAYS AFTER THE DATE OF THIS DECISION TO MAKE A WRITTEN SUBMISSION TO NYSE REGULATION, INC., IN CARE OF FINRA,
REGARDING ITS COMPLIANCE WITH THE EXCHANGE'S RULES AND POLICIES GOVERNING THE INCLUSION OF ACCOUNT ORIGIN CODES IN ORDER
AND EXECUTION DATA. THE FINE WILL BE PAYABLE ON THE DATE ON WHICH THE DECISION BECOMES FINAL. THE FIRM IS REQUIRED TO PAY THE
FINE WITHIN 45 DAYS OF THAT DATE, OR IT MAY FACE SUMMARY SUSPENSION, PURSUANT TO NYSE RULE 476(K).
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
HEARING OFFICER DECISION RENDERED MAY 27, 2015; THEREFORE THE FIRM IS CENSURED AND FINED JOINTLY AND SEVERALLY FINED $868,000. IN
ADDITION, THE FIRM SHALL UNDERTAKE AT INTERVALS OF 90, 180, 270, AND 360 DAYS AFTER THE DATE OF THIS DECISION TO MAKE A WRITTEN
SUBMISSION TO NYSE REGULATION, INC., IN CARE OF FINRA, REGARDING ITS COMPLIANCE WITH THE EXCHANGE'S RULES AND POLICIES GOVERNING
THE INCLUSION OF ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION DATA. THE FIRM VIOLATED EXCHANGE RULES 16, 153, 324, 955(C)(1),
956NY(A)(8), 957NY(E), 963NY(A) AND (B), AND 964NY(B)(2)(A), AS WELL AS SECTION 17(A)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 AND SEC
RULE 17A-3(A)(6)(I) THEREUNDER BY MISREPRESENTING OPTIONS ORDERS EXECUTED ON THE EXCHANGE WITH INACCURATE ACCOUNT ORIGIN
CODES. RESPONDENT ALSO VIOLATED EXCHANGE RULE 320 BY FAILING TO REASONABLY SUPERVISE AND IMPLEMENT ADEQUATE CONTROLS,
INCLUDING SEPARATE SYSTEMS OF FOLLOW-UP AND REVIEW, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE EXCHANGE'S RULES AND
POLICIES GOVERNING THE USE OF ACCOUNT ORIGIN CODES. THE DECISION BECAME FINAL AT THE CLOSE OF BUSINESS ON JUNE 22, 2015. THIS
PROCEEDING INCLUDES PROCEEDING NUMBER 20110277298.regulatory · block 97PDF pages 344–346
- Regulator name — filed text
- INTERNATIONAL SECURITIES EXCHANGE, LLC ("ISE")
- Monetary/Fine Amount — filed text
- $ 1,350,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM CONSENTED TO A CENSURE, A JOINT AND SEVERAL FINE IN THE AMOUNT OF $9,000,000, OF WHICH $1,350,000 SHALL BE PAID TO ISE; AND TO AN UNDERTAKING PURSUANT TO WHICH AT INTERVALS OF 90, 180, 270, AND 360 DAYS AFTER THE ACCEPTANCE OF THE AWC, THE FIRM SHALL MAKE A WRITTEN SUBMISSION TO ISE, IN CARE OF FINRA, REGARDING ITS COMPLIANCE WITH ISE'S RULES AND POLICIES GOVERNING THE INCLUSION OF ACCURATE ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION DATA.
Other filed details
Description of allegations — filed text
ON BEHALF OF THE ISE STAFF, FINRA STAFF MEMBERS CONDUCTED A REVIEW OF THE FIRM'S ORDER ENTRY ACTIVITIES IN THEIR CAPACITY AS ELECTRONIC ACCESS MEMBERS DURING THE PERIOD BETWEEN 2004 AND 2014 (THE "REVIEW PERIOD") FOR COMPLIANCE WITH ISE RULES. DURING THE REVIEW PERIOD, THE FIRM VIOLATED CERTAIN ISE RULES AND FEDERAL SECURITIES LAWS WHEN ENTERING AND EXECUTING CERTAIN ORDERS ON BEHALF OF THEIR BROKER-DEALER CLIENTS. THE FIRM IMPROPERLY MARKED NUMEROUS OPTIONS ORDERS WITH INCORRECT ORIGIN CODES AND SENT THOSE ORDERS TO ISE THROUGH VARIOUS ORDER ENTRY SYSTEMS EMPLOYED BY THE FIRM TO SEND OPTION ORDERS, RESULTING IN: (I) TRANSACTIONS EXECUTED BY THE FIRM THAT MAY HAVE TRADED AHEAD OF OTHER ORDERS ENTITLED TO EXECUTION PRIORITY; (II) POTENTIAL ADVERSE IMPACT TO THE EXECUTION PRICE AND QUANTITY OF OTHER MARKET PARTICIPANTS' ORDERS; (III) AN INACCURATE AUDIT TRAIL AND INACCURATE ORDER RECORDS; (IV) TRADES BEING REPORTED TO OCC WITH INACCURATE TRADE DETAILS; AND (V) AN ADVERSE IMPACT TO ISE'S ABILITY TO SURVEIL FOR AND DETECT POTENTIAL VIOLATIONS OF ITS RULES AND OF FEDERAL SECURITIES LAWS. ADDITIONALLY, THE STAFF CONCLUDED THAT THE FIRM HAD SUPERVISORY DEFICIENCIES RELATED TO THESE MATTERS. AS A RESULT, THE FIRM WAS FOUND TO HAVE VIOLATED OR CAUSED VIOLATIONS OF SECTION 17(A)(1) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED AND EXCHANGE ACT RULE 17A-3(A)(6)(I) PROMULGATED THEREUNDER, AND ISE RULES 400, 401, 712(A), 713(C), AND 1400(A).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM CONSENTED TO A CENSURE, A JOINT AND SEVERAL FINE IN THE AMOUNT OF $9,000,000, OF WHICH $1,350,000 SHALL BE PAID TO ISE; AND TO AN UNDERTAKING PURSUANT TO WHICH AT INTERVALS OF 90, 180, 270, AND 360 DAYS AFTER THE ACCEPTANCE OF THE AWC, THE FIRM SHALL MAKE A WRITTEN SUBMISSION TO ISE, IN CARE OF FINRA, REGARDING ITS COMPLIANCE WITH ISE'S RULES AND POLICIES GOVERNING THE INCLUSION OF ACCURATE ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION DATA.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
INTERNATIONAL SECURITIES EXCHANGE, LLC ("ISE")
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE; UNDERTAKING
3.
Date Initiated (MM/DD/YYYY):
05/20/2015
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
20110277299
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Options
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
ON BEHALF OF THE ISE STAFF, FINRA STAFF MEMBERS CONDUCTED A REVIEW OF THE FIRM'S ORDER ENTRY ACTIVITIES IN THEIR CAPACITY AS
ELECTRONIC ACCESS MEMBERS DURING THE PERIOD BETWEEN 2004 AND 2014 (THE "REVIEW PERIOD") FOR COMPLIANCE WITH ISE RULES. DURING
THE REVIEW PERIOD, THE FIRM VIOLATED CERTAIN ISE RULES AND FEDERAL SECURITIES LAWS WHEN ENTERING AND EXECUTING CERTAIN ORDERS
ON BEHALF OF THEIR BROKER-DEALER CLIENTS. THE FIRM IMPROPERLY MARKED NUMEROUS OPTIONS ORDERS WITH INCORRECT ORIGIN CODES AND
SENT THOSE ORDERS TO ISE THROUGH VARIOUS ORDER ENTRY SYSTEMS EMPLOYED BY THE FIRM TO SEND OPTION ORDERS, RESULTING IN: (I)
TRANSACTIONS EXECUTED BY THE FIRM THAT MAY HAVE TRADED AHEAD OF OTHER ORDERS ENTITLED TO EXECUTION PRIORITY; (II) POTENTIAL
ADVERSE IMPACT TO THE EXECUTION PRICE AND QUANTITY OF OTHER MARKET PARTICIPANTS' ORDERS; (III) AN INACCURATE AUDIT TRAIL AND
INACCURATE ORDER RECORDS; (IV) TRADES BEING REPORTED TO OCC WITH INACCURATE TRADE DETAILS; AND (V) AN ADVERSE IMPACT TO ISE'S
ABILITY TO SURVEIL FOR AND DETECT POTENTIAL VIOLATIONS OF ITS RULES AND OF FEDERAL SECURITIES LAWS. ADDITIONALLY, THE STAFF
CONCLUDED THAT THE FIRM HAD SUPERVISORY DEFICIENCIES RELATED TO THESE MATTERS. AS A RESULT, THE FIRM WAS FOUND TO HAVE VIOLATED
OR CAUSED VIOLATIONS OF SECTION 17(A)(1) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED AND EXCHANGE ACT RULE 17A-3(A)(6)(I)
PROMULGATED THEREUNDER, AND ISE RULES 400, 401, 712(A), 713(C), AND 1400(A).
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
06/03/2015
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 1,350,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
UNDERTAKING
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM CONSENTED TO A CENSURE, A JOINT AND SEVERAL FINE IN THE AMOUNT OF
$9,000,000, OF WHICH $1,350,000 SHALL BE PAID TO ISE; AND TO AN UNDERTAKING PURSUANT TO WHICH AT INTERVALS OF 90, 180, 270, AND
360 DAYS AFTER THE ACCEPTANCE OF THE AWC, THE FIRM SHALL MAKE A WRITTEN SUBMISSION TO ISE, IN CARE OF FINRA, REGARDING ITS
COMPLIANCE WITH ISE'S RULES AND POLICIES GOVERNING THE INCLUSION OF ACCURATE ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION
DATA.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM CONSENTED TO A CENSURE, A JOINT AND SEVERAL FINE IN THE AMOUNT OF
$9,000,000, OF WHICH $1,350,000 SHALL BE PAID TO ISE; AND TO AN UNDERTAKING PURSUANT TO WHICH AT INTERVALS OF 90, 180, 270, AND 360
DAYS AFTER THE ACCEPTANCE OF THE AWC, THE FIRM SHALL MAKE A WRITTEN SUBMISSION TO ISE, IN CARE OF FINRA, REGARDING ITS COMPLIANCE
WITH ISE'S RULES AND POLICIES GOVERNING THE INCLUSION OF ACCURATE ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION DATA.regulatory · block 98PDF pages 346–348
- Regulator name — filed text
- BATS EXCHANGE, INC. ("BATS")
- Monetary/Fine Amount — filed text
- $ 200,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO A CENSURE, A JOINT AND SEVERAL FINE IN THE AMOUNT OF $9,000,000, OF WHICH $200,000 SHALL BE PAID TO BATS; AND TO AN UNDERTAKING PURSUANT TO WHICH AT INTERVALS OF 90, 180, 270, AND 360 DAYS AFTER THE ACCEPTANCE OF THE AWC, THE FIRM SHALL MAKE A WRITTEN SUBMISSION TO BATS, IN CARE OF FINRA, REGARDING ITS COMPLIANCE WITH BATS'S RULES AND POLICIES GOVERNING THE INCLUSION OF ACCURATE ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION DATA.
Other filed details
Description of allegations — filed text
ON BEHALF OF BATS, THE STAFF OF FINRA'S MARKET REGULATION DEPARTMENT CONDUCTED A REVIEW OF THE FIRM'S ORDER ENTRY ACTIVITIES IN THEIR CAPACITY AS AN OPTIONS MEMBER DURING THE PERIOD BETWEEN FEBRUARY 2010 THROUGH 2014 (THE "REVIEW PERIOD") FOR COMPLIANCE WITH BATS RULES AND POLICIES GOVERNING THE USE OF ORIGIN CODES. DURING THE REVIEW PERIOD, THE FIRM VIOLATED CERTAIN BATS RULES AND FEDERAL SECURITIES LAWS WHEN ENTERING AND EXECUTING CERTAIN ORDERS ON BEHALF OF THEIR BROKER-DEALER CLIENTS. THE FIRM IMPROPERLY MARKED NUMEROUS OPTIONS ORDERS WITH INCORRECT ORIGIN CODES AND SENT THOSE ORDERS TO BATS THROUGH VARIOUS ORDER ENTRY SYSTEMS EMPLOYED BY THE FIRM TO SEND OPTION ORDERS, RESULTING IN: (I) AN INACCURATE AUDIT TRAIL AND INACCURATE ORDER RECORDS; (II) TRADES BEING REPORTED TO THE OPTIONS CLEARING CORPORATION ("OCC") WITH INACCURATE TRADE DETAILS; AND (III) AN ADVERSE IMPACT TO BATS'S ABILITY TO SURVEIL FOR AND DETECT POTENTIAL VIOLATIONS OF ITS RULES AND OF FEDERAL SECURITIES LAWS. ADDITIONALLY, THE STAFF CONCLUDED THAT THE FIRM HAD SUPERVISORY DEFICIENCIES RELATED TO THESE MATTERS. AS A RESULT, THE FIRM WAS FOUND TO HAVE VIOLATED SECTION 17(A)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 AND SEC RULE 17A-3(A)(6)(I) PROMULGATED THEREUNDER, AND BATS RULES 5.1, 5.2, 18.1, 18.2(A)(2), 18.2(A)(6), 20.1(B)(4), 20.7(B)(17), AND 24.1(A).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO A CENSURE, A JOINT AND SEVERAL FINE IN THE AMOUNT OF $9,000,000, OF WHICH $200,000 SHALL BE PAID TO BATS; AND TO AN UNDERTAKING PURSUANT TO WHICH AT INTERVALS OF 90, 180, 270, AND 360 DAYS AFTER THE ACCEPTANCE OF THE AWC, THE FIRM SHALL MAKE A WRITTEN SUBMISSION TO BATS, IN CARE OF FINRA, REGARDING ITS COMPLIANCE WITH BATS'S RULES AND POLICIES GOVERNING THE INCLUSION OF ACCURATE ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION DATA.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
BATS EXCHANGE, INC. ("BATS")
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE; UNDERTAKING
3.
Date Initiated (MM/DD/YYYY):
06/09/2015
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
20110277299
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Options
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
ON BEHALF OF BATS, THE STAFF OF FINRA'S MARKET REGULATION DEPARTMENT CONDUCTED A REVIEW OF THE FIRM'S ORDER ENTRY ACTIVITIES IN
THEIR CAPACITY AS AN OPTIONS MEMBER DURING THE PERIOD BETWEEN FEBRUARY 2010 THROUGH 2014 (THE "REVIEW PERIOD") FOR COMPLIANCE
WITH BATS RULES AND POLICIES GOVERNING THE USE OF ORIGIN CODES. DURING THE REVIEW PERIOD, THE FIRM VIOLATED CERTAIN BATS RULES
AND FEDERAL SECURITIES LAWS WHEN ENTERING AND EXECUTING CERTAIN ORDERS ON BEHALF OF THEIR BROKER-DEALER CLIENTS. THE FIRM
IMPROPERLY MARKED NUMEROUS OPTIONS ORDERS WITH INCORRECT ORIGIN CODES AND SENT THOSE ORDERS TO BATS THROUGH VARIOUS ORDER
ENTRY SYSTEMS EMPLOYED BY THE FIRM TO SEND OPTION ORDERS, RESULTING IN: (I) AN INACCURATE AUDIT TRAIL AND INACCURATE ORDER
RECORDS; (II) TRADES BEING REPORTED TO THE OPTIONS CLEARING CORPORATION ("OCC") WITH INACCURATE TRADE DETAILS; AND (III) AN
ADVERSE IMPACT TO BATS'S ABILITY TO SURVEIL FOR AND DETECT POTENTIAL VIOLATIONS OF ITS RULES AND OF FEDERAL SECURITIES LAWS.
ADDITIONALLY, THE STAFF CONCLUDED THAT THE FIRM HAD SUPERVISORY DEFICIENCIES RELATED TO THESE MATTERS. AS A RESULT, THE FIRM WAS
FOUND TO HAVE VIOLATED SECTION 17(A)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 AND SEC RULE 17A-3(A)(6)(I) PROMULGATED THEREUNDER,
AND BATS RULES 5.1, 5.2, 18.1, 18.2(A)(2), 18.2(A)(6), 20.1(B)(4), 20.7(B)(17), AND 24.1(A).
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
06/09/2015
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 200,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
UNDERTAKING
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO A CENSURE, A JOINT AND SEVERAL FINE IN THE AMOUNT OF
$9,000,000, OF WHICH $200,000 SHALL BE PAID TO BATS; AND TO AN UNDERTAKING PURSUANT TO WHICH AT INTERVALS OF 90, 180, 270, AND
360 DAYS AFTER THE ACCEPTANCE OF THE AWC, THE FIRM SHALL MAKE A WRITTEN SUBMISSION TO BATS, IN CARE OF FINRA, REGARDING ITS
COMPLIANCE WITH BATS'S RULES AND POLICIES GOVERNING THE INCLUSION OF ACCURATE ACCOUNT ORIGIN CODES IN ORDER AND
EXECUTION DATA.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO A CENSURE, A JOINT AND SEVERAL FINE IN THE AMOUNT OF $9,000,000,
OF WHICH $200,000 SHALL BE PAID TO BATS; AND TO AN UNDERTAKING PURSUANT TO WHICH AT INTERVALS OF 90, 180, 270, AND 360 DAYS AFTER
THE ACCEPTANCE OF THE AWC, THE FIRM SHALL MAKE A WRITTEN SUBMISSION TO BATS, IN CARE OF FINRA, REGARDING ITS COMPLIANCE WITH
BATS'S RULES AND POLICIES GOVERNING THE INCLUSION OF ACCURATE ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION DATA.regulatory · block 99PDF pages 348–350
- Regulator name — filed text
- NASDAQ OMX PHLX LLC (THE "EXCHANGE")
- Monetary/Fine Amount — filed text
- $ 9,000,000.00
- How was matter resolved — filed text
- Decision & Order of Offer of Settlement
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS OR CONCLUSIONS, THE FIRM CONSENTED TO A CENSURE, A JOINT AND SEVERAL FINE IN THE AMOUNT OF $9,000,000, OF WHICH $1,125,000 SHALL BE PAID TO THE EXCHANGE; AND TO AN UNDERTAKING PURSUANT TO WHICH AT INTERVALS OF 90, 180, 270, AND 360 DAYS AFTER THE DECISION ON THIS OFFER BECOMES FINAL, THE FIRM SHALL MAKE A WRITTEN SUBMISSION TO THE EXCHANGE, IN CARE OF FINRA, REGARDING ITS COMPLIANCE WITH EXCHANGE RULES AND POLICIES GOVERNING THE INCLUSION OF ACCURATE ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION DATA.
Other filed details
Description of allegations — filed text
ON BEHALF OF THE EXCHANGE, THE STAFF OF FINRA'S MARKET REGULATION STAFF CONDUCTED A REVIEW OF THE FIRM'S ORDER ENTRY ACTIVITIES IN THEIR CAPACITY AS A MEMBER ORGANIZATION DURING THE PERIOD BETWEEN 2004 AND 2014 (THE "REVIEW PERIOD") FOR COMPLIANCE WITH VARIOUS RULES AND FEDERAL SECURITIES LAWS. DURING THE REVIEW PERIOD, THE FIRM VIOLATED CERTAIN EXCHANGE RULES AND FEDERAL SECURITIES LAWS WHEN ENTERING CERTAIN ORDERS ON BEHALF OF THEIR BROKER-DEALER CLIENTS. THE FIRM IMPROPERLY MARKED NUMEROUS OPTIONS ORDERS WITH INCORRECT ORIGIN CODES AND SENT THOSE ORDERS TO THE EXCHANGE THROUGH VARIOUS ORDER ENTRY SYSTEMS EMPLOYED BY THE FIRM TO SEND OPTION ORDERS, RESULTING IN THE FOLLOWING: (I) TRANSACTIONS EXECUTED BY THE FIRM THAT MAY HAVE TRADED AHEAD OF OTHER ORDERS ENTITLED TO EXECUTION PRIORITY; (II) POTENTIAL ADVERSE IMPACT TO THE EXECUTION PRICE AND QUANTITY OF OTHER MARKET PARTICIPANTS' ORDERS; (III) AN INACCURATE AUDIT TRAIL AND INACCURATE ORDER RECORDS; (IV) TRADES BEING REPORTED TO THE OPTIONS CLEARING CORPORATION ("OCC") WITH INACCURATE TRADE DETAILS; AND (V) AN ADVERSE IMPACT TO THE EXCHANGE'S ABILITY TO SURVEIL FOR AND DETECT POTENTIAL VIOLATIONS OF ITS RULES AND OF FEDERAL SECURITIES LAWS. ADDITIONALLY, THE STAFF CONCLUDED THAT THE FIRM HAD SUPERVISORY DEFICIENCIES RELATED TO THESE MATTERS. AS A RESULT, THE FIRM WAS FOUND TO HAVE VIOLATED SECTION 17(A)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 AND SEC RULE 17A-3(A)(6)(I) PROMULGATED THEREUNDER, AND PHLX RULES 707, 748(B), (D), (G), LATER (H), 760, 785(C), 1014(G)(I)(A), 1053(IX), AND 1063(E)(I).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS OR CONCLUSIONS, THE FIRM CONSENTED TO A CENSURE, A JOINT AND SEVERAL FINE IN THE AMOUNT OF $9,000,000, OF WHICH $1,125,000 SHALL BE PAID TO THE EXCHANGE; AND TO AN UNDERTAKING PURSUANT TO WHICH AT INTERVALS OF 90, 180, 270, AND 360 DAYS AFTER THE DECISION ON THIS OFFER BECOMES FINAL, THE FIRM SHALL MAKE A WRITTEN SUBMISSION TO THE EXCHANGE, IN CARE OF FINRA, REGARDING ITS COMPLIANCE WITH EXCHANGE RULES AND POLICIES GOVERNING THE INCLUSION OF ACCURATE ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION DATA.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
NASDAQ OMX PHLX LLC (THE "EXCHANGE")
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE; UNDERTAKING
3.
Date Initiated (MM/DD/YYYY):
05/28/2015
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
20110277299
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Options
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
ON BEHALF OF THE EXCHANGE, THE STAFF OF FINRA'S MARKET REGULATION STAFF CONDUCTED A REVIEW OF THE FIRM'S ORDER ENTRY ACTIVITIES IN
THEIR CAPACITY AS A MEMBER ORGANIZATION DURING THE PERIOD BETWEEN 2004 AND 2014 (THE "REVIEW PERIOD") FOR COMPLIANCE WITH
VARIOUS RULES AND FEDERAL SECURITIES LAWS. DURING THE REVIEW PERIOD, THE FIRM VIOLATED CERTAIN EXCHANGE RULES AND FEDERAL
SECURITIES LAWS WHEN ENTERING CERTAIN ORDERS ON BEHALF OF THEIR BROKER-DEALER CLIENTS. THE FIRM IMPROPERLY MARKED NUMEROUS
OPTIONS ORDERS WITH INCORRECT ORIGIN CODES AND SENT THOSE ORDERS TO THE EXCHANGE THROUGH VARIOUS ORDER ENTRY SYSTEMS
EMPLOYED BY THE FIRM TO SEND OPTION ORDERS, RESULTING IN THE FOLLOWING: (I) TRANSACTIONS EXECUTED BY THE FIRM THAT MAY HAVE
TRADED AHEAD OF OTHER ORDERS ENTITLED TO EXECUTION PRIORITY; (II) POTENTIAL ADVERSE IMPACT TO THE EXECUTION PRICE AND QUANTITY OF
OTHER MARKET PARTICIPANTS' ORDERS; (III) AN INACCURATE AUDIT TRAIL AND INACCURATE ORDER RECORDS; (IV) TRADES BEING REPORTED TO THE
OPTIONS CLEARING CORPORATION ("OCC") WITH INACCURATE TRADE DETAILS; AND (V) AN ADVERSE IMPACT TO THE EXCHANGE'S ABILITY TO SURVEIL
FOR AND DETECT POTENTIAL VIOLATIONS OF ITS RULES AND OF FEDERAL SECURITIES LAWS. ADDITIONALLY, THE STAFF CONCLUDED THAT THE FIRM
HAD SUPERVISORY DEFICIENCIES RELATED TO THESE MATTERS. AS A RESULT, THE FIRM WAS FOUND TO HAVE VIOLATED SECTION 17(A)(1) OF THE
SECURITIES EXCHANGE ACT OF 1934 AND SEC RULE 17A-3(A)(6)(I) PROMULGATED THEREUNDER, AND PHLX RULES 707, 748(B), (D), (G), LATER (H),
760, 785(C), 1014(G)(I)(A), 1053(IX), AND 1063(E)(I).
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Decision & Order of Offer of Settlement
11. Resolution Date (MM/DD/YYYY):
06/08/2015
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 9,000,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
UNDERTAKING
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS OR CONCLUSIONS, THE FIRM CONSENTED TO A CENSURE, A JOINT AND SEVERAL FINE IN
THE AMOUNT OF $9,000,000, OF WHICH $1,125,000 SHALL BE PAID TO THE EXCHANGE; AND TO AN UNDERTAKING PURSUANT TO WHICH AT
INTERVALS OF 90, 180, 270, AND 360 DAYS AFTER THE DECISION ON THIS OFFER BECOMES FINAL, THE FIRM SHALL MAKE A WRITTEN
SUBMISSION TO THE EXCHANGE, IN CARE OF FINRA, REGARDING ITS COMPLIANCE WITH EXCHANGE RULES AND POLICIES GOVERNING THE
INCLUSION OF ACCURATE ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION DATA.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS OR CONCLUSIONS, THE FIRM CONSENTED TO A CENSURE, A JOINT AND SEVERAL FINE IN THE
AMOUNT OF $9,000,000, OF WHICH $1,125,000 SHALL BE PAID TO THE EXCHANGE; AND TO AN UNDERTAKING PURSUANT TO WHICH AT INTERVALS OF
90, 180, 270, AND 360 DAYS AFTER THE DECISION ON THIS OFFER BECOMES FINAL, THE FIRM SHALL MAKE A WRITTEN SUBMISSION TO THE
EXCHANGE, IN CARE OF FINRA, REGARDING ITS COMPLIANCE WITH EXCHANGE RULES AND POLICIES GOVERNING THE INCLUSION OF ACCURATE
ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION DATA.regulatory · block 100PDF pages 350–353
- Regulator name — filed text
- NASDAQ STOCK MARKET
- Monetary/Fine Amount — filed text
- $ 9,000,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED, JOINTLY AND SEVERALLY FINED $9,000,000, OF WHICH $225,000 SHALL BE PAID TO NOM, AND UNDERTAKES TO, AT INTERVALS OF 90, 180, 270, AND 360 DAYS AFTER ACCEPTANCE OF THIS AWC, MAKE A WRITTEN SUBMISSION TO NOM IN CARE OF FINRA, REGARDING ITS COMPLIANCE WITH NOM'S RULES AND POLICIES GOVERNING THE INCLUSION OF ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION DATA. DRP Pages
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THE FIRM EXECUTED NUMEROUS TRANSACTIONS WITH INCORRECT ORIGIN CODES ACROSS MULTIPLE MARKETS, INCLUDING THE NASDAQ OPTIONS MARKET, LLC (NOM). THE FIRM'S EXECUTION OF ORDERS WITH INCORRECT ORIGIN CODES RESULTED FROM CERTAIN ACCOUNTS HAVING BEEN ON-BOARDED WITH INCORRECT ORIGIN CODES IN THEIR RESPECTIVE ACCOUNT PROFILES, LIMITATIONS IN ITS ORDER MANAGEMENT SYSTEM THAT FAILED TO INCLUDE ALL POTENTIAL ORIGIN CODE DESIGNATIONS OR DEFAULTED TO AN IMPROPER ORIGIN CODE AT VARIOUS POINTS DURING THE REVIEW PERIOD, AND FROM ERRORS MADE BY THE FIRM'S EMPLOYEES WHEN PLACING ORIGIN CODES ON ORDERS AT THE POINT OF ORDER ACCEPTANCE, ENTRY, OR EXECUTION. THE FINDINGS STATED THAT DESPITE THE FACT THAT THE FIRM TRADED MILLIONS OF CONTRACTS BY EXECUTING ORDERS WITH INCORRECT ORIGIN CODES, THE FIRM LACKED PROCEDURES FOR ENSURING ORDERS HAD BEEN ENTERED WITH CORRECT ORIGIN CODES, AND FOR CONDUCTING REVIEWS TO DETECT THAT ORDERS HAD BEEN ENTERED AND EXECUTED WITH INCORRECT ORIGIN CODES. INSTEAD, THE FIRM ONLY LEARNED ABOUT MISREPRESENTED ORDERS IN ISOLATION AND THEN ADDRESSED EACH INSTANCE IN ISOLATION AND ON AN AD HOC BASIS. THE FINDINGS ALSO STATED THAT DESPITE THE KNOWLEDGE THAT THE FIRM HAD OF THE USE OF INCORRECT ORIGIN CODES, THE FIRM DID NOT TAKE MEASURES TO ENSURE THAT IT EXECUTED ORDERS WITH CORRECT ORIGIN CODES, OR TO DETECT INSTANCES IN WHICH IT HAD EXECUTED ORDERS WITH INCORRECT ORIGIN CODES. THE FINDINGS ALSO INCLUDED THAT ALTHOUGH THE FIRM BEGAN TAKING STEPS TO ADDRESS THE EXECUTION OF ORDERS WITH INCORRECT ORIGIN CODES AFTER CONDUCTING A REVIEW THAT LED TO THE CREATION AND IMPLEMENTATION OF EXCEPTION REPORTS TO IDENTIFY INSTANCES IN WHICH IT HAD EXECUTED ORDERS WITH INCORRECT ORIGIN CODES, IT STILL CONTINUED TRADING HUNDREDS OF THOUSANDS OF CONTRACTS EACH YEAR WITH INCORRECT ORIGIN CODES. FINRA FOUND THAT EACH INSTANCE IN WHICH THE FIRM EXECUTED AN ORDER WITH AN INCORRECT ORIGIN CODE COULD HAVE HAD ADVERSE CONSEQUENCES, SUCH AS CREATING INACCURATE ORDER RECORDS, CREATING AN INACCURATE AUDIT TRAIL, REPORTING TRADES TO THE OPTIONS CLEARING CORPORATION (OCC) WITH INACCURATE TRADE DETAILS, AND ADVERSELY IMPACTING NOM'S ABILITY TO SURVEIL FOR AND DETECT POTENTIAL VIOLATIONS OF ITS RULES AND FEDERAL SECURITIES LAWS. FINRA ALSO FOUND THAT THE FIRM FAILED TO HAVE SUPERVISORY SYSTEMS AND CONTROLS IN PLACE, INCLUDING A SEPARATE SYSTEM OF FOLLOW- UP AND REVIEW, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NOM'S ORIGIN CODE REQUIREMENTS.
Sanction detail — filed text
THE FIRM WAS CENSURED, JOINTLY AND SEVERALLY FINED $9,000,000, OF WHICH $225,000 SHALL BE PAID TO NOM, AND UNDERTAKES TO, AT INTERVALS OF 90, 180, 270, AND 360 DAYS AFTER ACCEPTANCE OF THIS AWC, MAKE A WRITTEN SUBMISSION TO NOM IN CARE OF FINRA, REGARDING ITS COMPLIANCE WITH NOM'S RULES AND POLICIES GOVERNING THE INCLUSION OF ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION DATA.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) NASDAQ STOCK MARKET 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE;UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 06/23/2015 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2011027729904 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Options Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THE FIRM EXECUTED NUMEROUS TRANSACTIONS WITH INCORRECT ORIGIN CODES ACROSS MULTIPLE MARKETS, INCLUDING THE NASDAQ OPTIONS MARKET, LLC (NOM). THE FIRM'S EXECUTION OF ORDERS WITH INCORRECT ORIGIN CODES RESULTED FROM CERTAIN ACCOUNTS HAVING BEEN ON-BOARDED WITH INCORRECT ORIGIN CODES IN THEIR RESPECTIVE ACCOUNT PROFILES, LIMITATIONS IN ITS ORDER MANAGEMENT SYSTEM THAT FAILED TO INCLUDE ALL POTENTIAL ORIGIN CODE DESIGNATIONS OR DEFAULTED TO AN IMPROPER ORIGIN CODE AT VARIOUS POINTS DURING THE REVIEW PERIOD, AND FROM ERRORS MADE BY THE FIRM'S EMPLOYEES WHEN PLACING ORIGIN CODES ON ORDERS AT THE POINT OF ORDER ACCEPTANCE, ENTRY, OR EXECUTION. THE FINDINGS STATED THAT DESPITE THE FACT THAT THE FIRM TRADED MILLIONS OF CONTRACTS BY EXECUTING ORDERS WITH INCORRECT ORIGIN CODES, THE FIRM LACKED PROCEDURES FOR ENSURING ORDERS HAD BEEN ENTERED WITH CORRECT ORIGIN CODES, AND FOR CONDUCTING REVIEWS TO DETECT THAT ORDERS HAD BEEN ENTERED AND EXECUTED WITH INCORRECT ORIGIN CODES. INSTEAD, THE FIRM ONLY LEARNED ABOUT MISREPRESENTED ORDERS IN ISOLATION AND THEN ADDRESSED EACH INSTANCE IN ISOLATION AND ON AN AD HOC BASIS. THE FINDINGS ALSO STATED THAT DESPITE THE KNOWLEDGE THAT THE FIRM HAD OF THE USE OF INCORRECT ORIGIN CODES, THE FIRM DID NOT TAKE MEASURES TO ENSURE THAT IT EXECUTED ORDERS WITH CORRECT ORIGIN CODES, OR TO DETECT INSTANCES IN WHICH IT HAD EXECUTED ORDERS WITH INCORRECT ORIGIN CODES. THE FINDINGS ALSO INCLUDED THAT ALTHOUGH THE FIRM BEGAN TAKING STEPS TO ADDRESS THE EXECUTION OF ORDERS WITH INCORRECT ORIGIN CODES AFTER CONDUCTING A REVIEW THAT LED TO THE CREATION AND IMPLEMENTATION OF EXCEPTION REPORTS TO IDENTIFY INSTANCES IN WHICH IT HAD EXECUTED ORDERS WITH INCORRECT ORIGIN CODES, IT STILL CONTINUED TRADING HUNDREDS OF THOUSANDS OF CONTRACTS EACH YEAR WITH INCORRECT ORIGIN CODES. FINRA FOUND THAT EACH INSTANCE IN WHICH THE FIRM EXECUTED AN ORDER WITH AN INCORRECT ORIGIN CODE COULD HAVE HAD ADVERSE CONSEQUENCES, SUCH AS CREATING INACCURATE ORDER RECORDS, CREATING AN INACCURATE AUDIT TRAIL, REPORTING TRADES TO THE OPTIONS CLEARING CORPORATION (OCC) WITH INACCURATE TRADE DETAILS, AND ADVERSELY IMPACTING NOM'S ABILITY TO SURVEIL FOR AND DETECT POTENTIAL VIOLATIONS OF ITS RULES AND FEDERAL SECURITIES LAWS. FINRA ALSO FOUND THAT THE FIRM FAILED TO HAVE SUPERVISORY SYSTEMS AND CONTROLS IN PLACE, INCLUDING A SEPARATE SYSTEM OF FOLLOW- UP AND REVIEW, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NOM'S ORIGIN CODE REQUIREMENTS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 06/23/2015 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 9,000,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED, JOINTLY AND SEVERALLY FINED $9,000,000, OF WHICH $225,000 SHALL BE PAID TO NOM, AND UNDERTAKES TO, AT INTERVALS OF 90, 180, 270, AND 360 DAYS AFTER ACCEPTANCE OF THIS AWC, MAKE A WRITTEN SUBMISSION TO NOM IN CARE OF FINRA, REGARDING ITS COMPLIANCE WITH NOM'S RULES AND POLICIES GOVERNING THE INCLUSION OF ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION DATA. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED, JOINTLY AND SEVERALLY FINED $9,000,000, OF WHICH $225,000 SHALL BE PAID TO NOM, AND UNDERTAKES TO, AT INTERVALS OF 90, 180, 270, AND 360 DAYS AFTER ACCEPTANCE OF THIS AWC, MAKE A WRITTEN SUBMISSION TO NOM IN CARE OF FINRA, REGARDING ITS COMPLIANCE WITH NOM'S RULES AND POLICIES GOVERNING THE INCLUSION OF ACCOUNT ORIGIN CODES IN ORDER AND EXECUTION DATA. DRP Pages
regulatory · block 1PDF pages 353–354
- Regulator name — filed text
- CHICAGO BOARD OPTIONS EXCHANGE
- Monetary/Fine Amount — filed text
- $ 9,000,000.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
THE FIRM WAS CENSURED, FINED $9,000,000, OF WHICH $4,500,000 SHALL BE PAID TO THE CBOE, AND UNDERTAKES TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THAT A VIOLATION OF EXCHANGE RULES HAS BEEN COMMITTED, THE FIRM CONSENTED TO THE FOLLOWING STIPULATION OF FACTS AND FINDINGS AND SANCTIONS: FROM ON OR ABOUT JANUARY 2004 THROUGH ON OR ABOUT FEBRUARY 2014, THE FIRM VIOLATED CERTAIN FEDERAL SECURITIES LAWS AND CERTAIN CBOE RULES BY IMPROPERLY MARKING NUMEROUS OPTIONS ORDERS ON BEHALF OF BROKER-DEALERS WITH INCORRECT OPTION ORIGIN CODES THAT WERE THEREAFTER SENT TO THE EXCHANGE THROUGH VARIOUS ORDER ENTRY SYSTEMS EMPLOYED BY THE FIRM TO SEND OPTIONS ORDERS, RESULTING IN (I) TRANSACTIONS EXECUTED BY THE FIRM THAT MAY HAVE TRADED ADHEAD OF OTHER ORDERS ENTITLED TO EXECUTION PRIORITY; (II) POTENTIAL ADVERSE IMPACT TO THE EXECUTION PRICE AND/OR CONTRACT QUALITY OF OTHER MARKET PARTICIPANTS' ORDERS; (III) AN INACCURATE EXCHANGE AUDIT TRAIL AND INACCURATE BOOKS AND RECORDS; (IV) TRADES BEING REPORT TO THE OPTIONS CLEARING CORPORATION WITH INACCURATE TRADE DETAILS; AND (V) AN ADVERSE IMPACT TO THE EXCHANGE'S ABILITY TO SURVEIL FOR AND DETECT POTENTIAL VIOLATIONS OF ITS RULES AND OF FEDERAL SECURITIES LAWS. IN ADDITION, THE STAFF CONCLUDED THAT THE FIRM HAD SUPERVISORY DEFICIENCIES RELATED TO THE IMPROPER MARKING, EXECUTION AND CLEARANCE OF INCORRECT ORDER ORIGIN CODES.
Sanction detail — filed text
THE FIRM WAS CENSURED, FINED $9,000,000, OF WHICH $4,500,000 SHALL BE PAID TO THE CBOE, AND UNDERTAKES TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) CHICAGO BOARD OPTIONS EXCHANGE 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 06/23/2015 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 15-0052 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Options Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THAT A VIOLATION OF EXCHANGE RULES HAS BEEN COMMITTED, THE FIRM CONSENTED TO THE FOLLOWING STIPULATION OF FACTS AND FINDINGS AND SANCTIONS: FROM ON OR ABOUT JANUARY 2004 THROUGH ON OR ABOUT FEBRUARY 2014, THE FIRM VIOLATED CERTAIN FEDERAL SECURITIES LAWS AND CERTAIN CBOE RULES BY IMPROPERLY MARKING NUMEROUS OPTIONS ORDERS ON BEHALF OF BROKER-DEALERS WITH INCORRECT OPTION ORIGIN CODES THAT WERE THEREAFTER SENT TO THE EXCHANGE THROUGH VARIOUS ORDER ENTRY SYSTEMS EMPLOYED BY THE FIRM TO SEND OPTIONS ORDERS, RESULTING IN (I) TRANSACTIONS EXECUTED BY THE FIRM THAT MAY HAVE TRADED ADHEAD OF OTHER ORDERS ENTITLED TO EXECUTION PRIORITY; (II) POTENTIAL ADVERSE IMPACT TO THE EXECUTION PRICE AND/OR CONTRACT QUALITY OF OTHER MARKET PARTICIPANTS' ORDERS; (III) AN INACCURATE EXCHANGE AUDIT TRAIL AND INACCURATE BOOKS AND RECORDS; (IV) TRADES BEING REPORT TO THE OPTIONS CLEARING CORPORATION WITH INACCURATE TRADE DETAILS; AND (V) AN ADVERSE IMPACT TO THE EXCHANGE'S ABILITY TO SURVEIL FOR AND DETECT POTENTIAL VIOLATIONS OF ITS RULES AND OF FEDERAL SECURITIES LAWS. IN ADDITION, THE STAFF CONCLUDED THAT THE FIRM HAD SUPERVISORY DEFICIENCIES RELATED TO THE IMPROPER MARKING, EXECUTION AND CLEARANCE OF INCORRECT ORDER ORIGIN CODES. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Consent 11. Resolution Date (MM/DD/YYYY): 06/23/2015 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 9,000,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED, FINED $9,000,000, OF WHICH $4,500,000 SHALL BE PAID TO THE CBOE, AND UNDERTAKES TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED, FINED $9,000,000, OF WHICH $4,500,000 SHALL BE PAID TO THE CBOE, AND UNDERTAKES TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES.
regulatory · block 2PDF pages 354–356
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 70,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED AND FINED $70,000.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO SHOW THE TERMS AND CONDITIONS ON THE MEMORANDUM OF 82 BROKERAGE ORDERS. THE FINDINGS STATED THAT ON FIVE OCCASIONS, THE FIRM ACCEPTED A SHORT SALE ORDER IN AN EQUITY SECURITY FROM ANOTHER PERSON, OR EFFECTED A SHORT SALE IN AN EQUITY SECURITY FOR ITS OWN ACCOUNT, WITHOUT: BORROWING THE SECURITY, OR ENTERING INTO A BONA-FIDE ARRANGEMENT TO BORROW THE SECURITY; OR HAVING REASONABLE GROUNDS TO BELIEVE THAT THE SECURITY COULD BE BORROWED SO THAT IT COULD BE DELIVERED ON THE DATE DELIVERY IS DUE; AND DOCUMENTING COMPLIANCE WITH SEC RULE 203(B)(1) OF REGULATION SHO. THE FINDINGS ALSO STATED THAT THE FIRM TRANSMITTED 33 REPORTS TO THE ORDER AUDIT TRAIL SYSTEM (OATS) THAT CONTAINED INACCURATE, INCOMPLETE, OR IMPROPERLY FORMATTED DATA. THE FINDINGS ALSO INCLUDED THAT THE FAILED TO APPEND THE SHORT SALE INDICATOR ON 24 TRADE REPORTS SUBMITTED TO THE FINRA/NASDAQ TRADE REPORTING FACILITY FOR A SHORT SALE TRANSACTION IN A REPORTABLE SECURITY AND FAILED TO TIMELY REPORT TO THE FINRA/NASDAQ TRADE REPORTING FACILITY REPORTING BY 8:00 P.M. EASTERN TIME 12 TRANSACTIONS THAT REQUIRED A .RX MODIFIER. FINRA FOUND THAT FOR THE MONTH OF APRIL 2012, THE FIRM MADE AVAILABLE A REPORT ON THE COVERED ORDERS IN NATIONAL MARKET SYSTEM SECURITIES THAT IT RECEIVED FOR EXECUTION FROM ANY PERSON THAT INCLUDED INACCURATE INFORMATION.
Sanction detail — filed text
THE FIRM WAS CENSURED AND FINED $70,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 08/10/2015 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2012031645001 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Equity Listed (Common & Preferred Stock) Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO SHOW THE TERMS AND CONDITIONS ON THE MEMORANDUM OF 82 BROKERAGE ORDERS. THE FINDINGS STATED THAT ON FIVE OCCASIONS, THE FIRM ACCEPTED A SHORT SALE ORDER IN AN EQUITY SECURITY FROM ANOTHER PERSON, OR EFFECTED A SHORT SALE IN AN EQUITY SECURITY FOR ITS OWN ACCOUNT, WITHOUT: BORROWING THE SECURITY, OR ENTERING INTO A BONA-FIDE ARRANGEMENT TO BORROW THE SECURITY; OR HAVING REASONABLE GROUNDS TO BELIEVE THAT THE SECURITY COULD BE BORROWED SO THAT IT COULD BE DELIVERED ON THE DATE DELIVERY IS DUE; AND DOCUMENTING COMPLIANCE WITH SEC RULE 203(B)(1) OF REGULATION SHO. THE FINDINGS ALSO STATED THAT THE FIRM TRANSMITTED 33 REPORTS TO THE ORDER AUDIT TRAIL SYSTEM (OATS) THAT CONTAINED INACCURATE, INCOMPLETE, OR IMPROPERLY FORMATTED DATA. THE FINDINGS ALSO INCLUDED THAT THE FAILED TO APPEND THE SHORT SALE INDICATOR ON 24 TRADE REPORTS SUBMITTED TO THE FINRA/NASDAQ TRADE REPORTING FACILITY FOR A SHORT SALE TRANSACTION IN A REPORTABLE SECURITY AND FAILED TO TIMELY REPORT TO THE FINRA/NASDAQ TRADE REPORTING FACILITY REPORTING BY 8:00 P.M. EASTERN TIME 12 TRANSACTIONS THAT REQUIRED A .RX MODIFIER. FINRA FOUND THAT FOR THE MONTH OF APRIL 2012, THE FIRM MADE AVAILABLE A REPORT ON THE COVERED ORDERS IN NATIONAL MARKET SYSTEM SECURITIES THAT IT RECEIVED FOR EXECUTION FROM ANY PERSON THAT INCLUDED INACCURATE INFORMATION. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 08/10/2015 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 70,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED AND FINED $70,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED AND FINED $70,000.
regulatory · block 3PDF pages 356–358
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 17,500.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED, FINED $17,500 AND REQUIRED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT, DURING THE RELEVANT REVIEW PERIOD, IT FAILED TO IMPLEMENT POLICIES AND PROCEDURES THAT REASONABLY AVOID DISPLAYING, OR ENGAGING IN A PATTERN OR PRACTICE OF DISPLAYING, LOCKING OR CROSSING QUOTATIONS IN ANY OVER-THE-COUNTER (OTC) EQUITY SECURITY. THE FINDINGS STATED THAT, DURING THE RELEVANT REVIEW PERIOD, THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONS, AND FINRA RULES, CONCERNING FINRA RULE 6437.
Sanction detail — filed text
THE FIRM WAS CENSURED, FINED $17,500 AND REQUIRED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 09/14/2015 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2013039305901 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT, DURING THE RELEVANT REVIEW PERIOD, IT FAILED TO IMPLEMENT POLICIES AND PROCEDURES THAT REASONABLY AVOID DISPLAYING, OR ENGAGING IN A PATTERN OR PRACTICE OF DISPLAYING, LOCKING OR CROSSING QUOTATIONS IN ANY OVER-THE-COUNTER (OTC) EQUITY SECURITY. THE FINDINGS STATED THAT, DURING THE RELEVANT REVIEW PERIOD, THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONS, AND FINRA RULES, CONCERNING FINRA RULE 6437. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 09/14/2015 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 17,500.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING: REVISE THE FIRM'S WRITTEN SUPERVISORY PROCEDURES. Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED, FINED $17,500 AND REQUIRED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED, FINED $17,500 AND REQUIRED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES.
regulatory · block 4PDF pages 358–360
- Regulator name — filed text
- C2 OPTIONS EXCHANGE, INCORPORATED (THE "EXCHANGE")
- Monetary/Fine Amount — filed text
- $ 75,000.00
- How was matter resolved — filed text
- Decision & Order of Offer of Settlement
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THAT A VIOLATION OF THE C2 RULES WAS COMMITTED, THE FIRM CONSENTED TO THE IMPOSITION OF THE FOLLOWING SANCTIONS: (1) A CENSURE, AND (2) A FINE IN THE AMOUNT OF $75,000.
Other filed details
Description of allegations — filed text
THE C2 OPTIONS EXCHANGE, INCORPORATED (C2) ALLEGED THAT THE FIRM FAILED TO REGISTER ITS FINANCIAL AND OPERATIONS PRINCIPAL AS A FINANCIAL/OPERATIONS PRINCIPAL WITH C2, FAILED TO REGISTER CERTAIN ASSOCIATED PERSONS AS PROPRIETARY TRADER PRINCIPALS (TP) WITH C2, FAILED TO REGISTER THE MINIMUM NUMBER OF TPS WITH C2, FAILED TO REGISTER CERTAIN ASSOCIATED PERSONS AS PROPRIETARY TRADERS WITH C2 AND FAILED TO REGISTER ITS CHIEF COMPLIANCE OFFICER AS A PROPRIETARY TRADER COMPLIANCE OFFICER WITH C2 IN VIOLATION OF C2 RULE 3.4. THE FIRM SUBMITTED A LETTER OF CONSENT, WITHOUT ADMITTING OR DENYING THAT A VIOLATION OF C2 RULES WAS COMMITTED.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THAT A VIOLATION OF THE C2 RULES WAS COMMITTED, THE FIRM CONSENTED TO THE IMPOSITION OF THE FOLLOWING SANCTIONS: (1) A CENSURE, AND (2) A FINE IN THE AMOUNT OF $75,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) C2 OPTIONS EXCHANGE, INCORPORATED (THE "EXCHANGE") 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 09/09/2015 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: FILE NO. C2 15-0015 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE C2 OPTIONS EXCHANGE, INCORPORATED (C2) ALLEGED THAT THE FIRM FAILED TO REGISTER ITS FINANCIAL AND OPERATIONS PRINCIPAL AS A FINANCIAL/OPERATIONS PRINCIPAL WITH C2, FAILED TO REGISTER CERTAIN ASSOCIATED PERSONS AS PROPRIETARY TRADER PRINCIPALS (TP) WITH C2, FAILED TO REGISTER THE MINIMUM NUMBER OF TPS WITH C2, FAILED TO REGISTER CERTAIN ASSOCIATED PERSONS AS PROPRIETARY TRADERS WITH C2 AND FAILED TO REGISTER ITS CHIEF COMPLIANCE OFFICER AS A PROPRIETARY TRADER COMPLIANCE OFFICER WITH C2 IN VIOLATION OF C2 RULE 3.4. THE FIRM SUBMITTED A LETTER OF CONSENT, WITHOUT ADMITTING OR DENYING THAT A VIOLATION OF C2 RULES WAS COMMITTED. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Decision & Order of Offer of Settlement 11. Resolution Date (MM/DD/YYYY): 06/02/2016 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 75,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THAT A VIOLATION OF THE C2 RULES WAS COMMITTED, THE FIRM CONSENTED TO THE IMPOSITION OF THE FOLLOWING SANCTIONS: (1) A CENSURE, AND (2) A FINE IN THE AMOUNT OF $75,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THAT A VIOLATION OF THE C2 RULES WAS COMMITTED, THE FIRM CONSENTED TO THE IMPOSITION OF THE FOLLOWING SANCTIONS: (1) A CENSURE, AND (2) A FINE IN THE AMOUNT OF $75,000.
regulatory · block 5PDF pages 360–362
- Regulator name — filed text
- FINANCIAL INDUSTRY REGULATORY AUTHORITY
- Monetary/Fine Amount — filed text
- $ 1,250,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
IN CONNECTION WITH THE AWC, MERRILL LYNCH AGREED TO AN UNDERTAKING TO REVIEW ITS SYSTEMS AND PROCEDURES REGARDING THE IDENTIFICATION, FINGERPRINTING, AND SCREENING OF NON-REGISTERED ASSOCIATED PERSONS TO ENSURE THAT CURRENT SYSTEMS AND PROCEDURES ARE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH ALL SECURITIES LAWS AND REGULATIONS, INCLUDING SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-3 THEREUNDER, SECTION 17(F) OF THE EXCHANGE ACT AND RULE 17F-2 THEREUNDER, FINRA BY-LAWS ARTICLE III, SECTION 3(B), AND FINRA RULE 4511.
Other filed details
Description of allegations — filed text
THE FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA) ALLEGED THAT FROM JANUARY 2009 THROUGH OCTOBER 28, 2013, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MERRILL LYNCH) DID NOT CONDUCT ADEQUATE BACKGROUND CHECKS ON APPROXIMATELY 4,500 NON- REGISTERED ASSOCIATED PERSONS, AFTER ITS ACQUISITION BY BANK OF AMERICA CORPORATION AND THE RESULTING ORGANIZATIONAL CHANGES. OF THAT TOTAL, APPROXIMATELY 3,145 WERE FINGERPRINTED, BUT WERE SCREENED UNDER THE STANDARDS APPLICABLE TO BANKS AND NOT TO BROKER-DEALERS; APPROXIMATELY 1,115 WERE NOT FINGERPRINTED; AND APPROXIMATELY 240 WERE NOT FINGERPRINTED UNTIL AFTER THEY JOINED MERRILL LYNCH. AS A RESULT, FINRA ALLEGED INDIVIDUALS WERE NOT PROPERLY SCREENED FOR STATUTORY DISQUALIFICATIONS UNDER THE SECURITIES EXCHANGE ACT OF 1934 (EXCHANGE ACT) (AND ONE PERSON SUBJECT TO AN EXCHANGE ACT STATUTORY DISQUALIFICATION ACTUALLY ASSOCIATED WITH MERRILL LYNCH); MERRILL LYNCH DID NOT HAVE ADEQUATE RECORDS AND MERRILL LYNCH DID NOT ADEQUATELY SUPERVISE THE FINGERPRINTING PROCESS. FINRA ALLEGED VIOLATIONS OF SECTION 17(F) OF THE EXCHANGE ACT AND RULE 17F-2 THEREUNDER; SECTION 17(A) OF THE EXCHANGE ACT AND RULES 17A-3(A)(12)(I)(G) AND 17A-3(A)(13) THEREUNDER; ARTICLE III, SECTION 3(B) OF THE FINRA BY-LAWS; NASD RULE 3010 AND FINRA RULES 4511 AND 2010. MERRILL LYNCH ACCEPTED AND CONSENTED TO THE ENTRY OF AN AWC, WITHOUT ADMITTING OR DENYING THE FINDINGS.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH CONSENTED TO THE IMPOSITION OF THE FOLLOWING SANCTIONS: (1) A CENSURE, (2) A FINE IN THE AMOUNT OF $1,250,000, AND (3) A CERTAIN UNDERTAKING. THE FINE WAS TIMELY PAID ON DECEMBER 22, 2015.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINANCIAL INDUSTRY REGULATORY AUTHORITY 2. Principal Sanction: Censure Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 12/16/2015 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: AWC NO. 2013038772501 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA) ALLEGED THAT FROM JANUARY 2009 THROUGH OCTOBER 28, 2013, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MERRILL LYNCH) DID NOT CONDUCT ADEQUATE BACKGROUND CHECKS ON APPROXIMATELY 4,500 NON- REGISTERED ASSOCIATED PERSONS, AFTER ITS ACQUISITION BY BANK OF AMERICA CORPORATION AND THE RESULTING ORGANIZATIONAL CHANGES. OF THAT TOTAL, APPROXIMATELY 3,145 WERE FINGERPRINTED, BUT WERE SCREENED UNDER THE STANDARDS APPLICABLE TO BANKS AND NOT TO BROKER-DEALERS; APPROXIMATELY 1,115 WERE NOT FINGERPRINTED; AND APPROXIMATELY 240 WERE NOT FINGERPRINTED UNTIL AFTER THEY JOINED MERRILL LYNCH. AS A RESULT, FINRA ALLEGED INDIVIDUALS WERE NOT PROPERLY SCREENED FOR STATUTORY DISQUALIFICATIONS UNDER THE SECURITIES EXCHANGE ACT OF 1934 (EXCHANGE ACT) (AND ONE PERSON SUBJECT TO AN EXCHANGE ACT STATUTORY DISQUALIFICATION ACTUALLY ASSOCIATED WITH MERRILL LYNCH); MERRILL LYNCH DID NOT HAVE ADEQUATE RECORDS AND MERRILL LYNCH DID NOT ADEQUATELY SUPERVISE THE FINGERPRINTING PROCESS. FINRA ALLEGED VIOLATIONS OF SECTION 17(F) OF THE EXCHANGE ACT AND RULE 17F-2 THEREUNDER; SECTION 17(A) OF THE EXCHANGE ACT AND RULES 17A-3(A)(12)(I)(G) AND 17A-3(A)(13) THEREUNDER; ARTICLE III, SECTION 3(B) OF THE FINRA BY-LAWS; NASD RULE 3010 AND FINRA RULES 4511 AND 2010. MERRILL LYNCH ACCEPTED AND CONSENTED TO THE ENTRY OF AN AWC, WITHOUT ADMITTING OR DENYING THE FINDINGS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 12/16/2015 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 1,250,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH CONSENTED TO THE IMPOSITION OF THE FOLLOWING SANCTIONS: (1) A CENSURE, (2) A FINE IN THE AMOUNT OF $1,250,000, AND (3) A CERTAIN UNDERTAKING. THE FINE WAS TIMELY PAID ON DECEMBER 22, 2015. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). IN CONNECTION WITH THE AWC, MERRILL LYNCH AGREED TO AN UNDERTAKING TO REVIEW ITS SYSTEMS AND PROCEDURES REGARDING THE IDENTIFICATION, FINGERPRINTING, AND SCREENING OF NON-REGISTERED ASSOCIATED PERSONS TO ENSURE THAT CURRENT SYSTEMS AND PROCEDURES ARE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH ALL SECURITIES LAWS AND REGULATIONS, INCLUDING SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-3 THEREUNDER, SECTION 17(F) OF THE EXCHANGE ACT AND RULE 17F-2 THEREUNDER, FINRA BY-LAWS ARTICLE III, SECTION 3(B), AND FINRA RULE 4511.
regulatory · block 6PDF pages 362–364
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 155,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
p p ) IN DETERMINING TO RESOLVE THIS MATTER IN THE MANNER SET FORTH HEREIN, AND IN DETERMINING THE APPROPRIATE MONETARY SANCTION, FINRA GAVE CONSIDERATION THAT THE FIRM SELF-REPORTED TO FINRA IN JULY 2013 THE FAILURE TO SUBMIT TO OATS THE ROES INVOLVED IN THIS MATTER. THE FIRM FURTHER UNDERTOOK STEPS TO REMEDIATE THE ISSUES, AND SUBSEQUENTLY SUBMITTED TO OATS THE ROES IT FAILED TO SUBMIT DURING THE PERIOD BETWEEN MARCH 2012 AND MAY 2013.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO TRANSMIT REPORTABLE ORDER EVENTS (ROES) TO THE ORDER AUDIT TRAIL SYSTEM (OATS) UNDER ITS VARIOUS MARKET PARTICIPANT IDENTIFIERS (MPIDS). THE FINDINGS STATED THAT THE FIRM FAILED TO REPORT TO THE FINRA/NASDAQ TRADE REPORTING FACILITY BY 8:00 P.M. EASTERN TIME TRANSACTIONS THAT REQUIRED A .X MODIFIER. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONS, AND FINRA RULES CONCERNING OATS AND TRADE REPORTING.
Sanction detail — filed text
THE FIRM WAS CENSURED AND FINED $155,000. FINE PAID IN FULL ON MAY 13, 2016.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 03/15/2016 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2013037678901 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: UNSPECIFIED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO TRANSMIT REPORTABLE ORDER EVENTS (ROES) TO THE ORDER AUDIT TRAIL SYSTEM (OATS) UNDER ITS VARIOUS MARKET PARTICIPANT IDENTIFIERS (MPIDS). THE FINDINGS STATED THAT THE FIRM FAILED TO REPORT TO THE FINRA/NASDAQ TRADE REPORTING FACILITY BY 8:00 P.M. EASTERN TIME TRANSACTIONS THAT REQUIRED A .X MODIFIER. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONS, AND FINRA RULES CONCERNING OATS AND TRADE REPORTING. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 03/15/2016 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 155,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED AND FINED $155,000. FINE PAID IN FULL ON MAY 13, 2016. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). p p ) IN DETERMINING TO RESOLVE THIS MATTER IN THE MANNER SET FORTH HEREIN, AND IN DETERMINING THE APPROPRIATE MONETARY SANCTION, FINRA GAVE CONSIDERATION THAT THE FIRM SELF-REPORTED TO FINRA IN JULY 2013 THE FAILURE TO SUBMIT TO OATS THE ROES INVOLVED IN THIS MATTER. THE FIRM FURTHER UNDERTOOK STEPS TO REMEDIATE THE ISSUES, AND SUBSEQUENTLY SUBMITTED TO OATS THE ROES IT FAILED TO SUBMIT DURING THE PERIOD BETWEEN MARCH 2012 AND MAY 2013.
regulatory · block 7PDF pages 364–365
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 565,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED, FINED $565,000 AND ORDERED TO PAY CUSTOMERS RESTITUTION OF $95,530.93, PLUS INTEREST. THE FIRM HAS PAID REMEDIATION TO RELEVANT CUSTOMERS IN THE AMOUNT OF $90,841.10.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IN TRANSACTIONS, THE FIRM PURCHASED MUNICIPAL SECURITIES FOR ITS OWN ACCOUNT FROM A CUSTOMER AND/OR SOLD MUNICIPAL SECURITIES FOR ITS OWN ACCOUNT TO A CUSTOMER AT AN AGGREGATE PRICE (INCLUDING ANY MARK-DOWN OR MARK-UP) THAT WAS NOT FAIR AND REASONABLE, TAKING INTO CONSIDERATION ALL RELEVANT FACTORS, INCLUDING THE BEST JUDGMENT OF THE BROKER, DEALER OR MUNICIPAL SECURITIES DEALER AS TO THE FAIR MARKET VALUE OF THE SECURITIES AT THE TIME OF THE TRANSACTION AND OF ANY SECURITIES EXCHANGED OR TRADED IN CONNECTION WITH THE TRANSACTION, THE EXPENSE INVOLVED IN EFFECTING THE TRANSACTION, THE FACT THAT THE BROKER, DEALER, OR MUNICIPAL SECURITIES DEALER IS ENTITLED TO A PROFIT, AND THE TOTAL DOLLAR AMOUNT OF THE TRANSACTION. THE FINDINGS STATED THAT IN CORPORATE BOND TRANSACTIONS FOR OR WITH A CUSTOMER, THE FIRM FAILED TO USE REASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER-DEALER MARKET AND FAILED TO BUY OR SELL IN SUCH MARKET SO THAT THE RESULTANT PRICE TO ITS CUSTOMER WAS AS FAVORABLE AS POSSIBLE UNDER PREVAILING MARKET CONDITIONS. IN CORPORATE BOND TRANSACTIONS, THE FIRM SOLD (BOUGHT) CORPORATE BONDS TO (FROM) CUSTOMERS AND FAILED TO SELL (BUY) SUCH BONDS AT A PRICE THAT WAS FAIR, TAKING INTO CONSIDERATION ALL RELEVANT CIRCUMSTANCES, INCLUDING MARKET CONDITIONS WITH RESPECT TO EACH BOND AT THE TIME OF THE TRANSACTION, THE EXPENSE INVOLVED AND THAT THE FIRM WAS ENTITLED TO A PROFIT.
Sanction detail — filed text
THE FIRM WAS CENSURED, FINED $565,000 AND ORDERED TO PAY CUSTOMERS RESTITUTION OF $95,530.93, PLUS INTEREST. THE FIRM HAS PAID REMEDIATION TO RELEVANT CUSTOMERS IN THE AMOUNT OF $90,841.10.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE;RESTITUTION;INTEREST 3. Date Initiated (MM/DD/YYYY): 03/24/2016 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2009020201201 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Debt - Corporate Other Product Types: MUNICIPAL SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IN TRANSACTIONS, THE FIRM PURCHASED MUNICIPAL SECURITIES FOR ITS OWN ACCOUNT FROM A CUSTOMER AND/OR SOLD MUNICIPAL SECURITIES FOR ITS OWN ACCOUNT TO A CUSTOMER AT AN AGGREGATE PRICE (INCLUDING ANY MARK-DOWN OR MARK-UP) THAT WAS NOT FAIR AND REASONABLE, TAKING INTO CONSIDERATION ALL RELEVANT FACTORS, INCLUDING THE BEST JUDGMENT OF THE BROKER, DEALER OR MUNICIPAL SECURITIES DEALER AS TO THE FAIR MARKET VALUE OF THE SECURITIES AT THE TIME OF THE TRANSACTION AND OF ANY SECURITIES EXCHANGED OR TRADED IN CONNECTION WITH THE TRANSACTION, THE EXPENSE INVOLVED IN EFFECTING THE TRANSACTION, THE FACT THAT THE BROKER, DEALER, OR MUNICIPAL SECURITIES DEALER IS ENTITLED TO A PROFIT, AND THE TOTAL DOLLAR AMOUNT OF THE TRANSACTION. THE FINDINGS STATED THAT IN CORPORATE BOND TRANSACTIONS FOR OR WITH A CUSTOMER, THE FIRM FAILED TO USE REASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER-DEALER MARKET AND FAILED TO BUY OR SELL IN SUCH MARKET SO THAT THE RESULTANT PRICE TO ITS CUSTOMER WAS AS FAVORABLE AS POSSIBLE UNDER PREVAILING MARKET CONDITIONS. IN CORPORATE BOND TRANSACTIONS, THE FIRM SOLD (BOUGHT) CORPORATE BONDS TO (FROM) CUSTOMERS AND FAILED TO SELL (BUY) SUCH BONDS AT A PRICE THAT WAS FAIR, TAKING INTO CONSIDERATION ALL RELEVANT CIRCUMSTANCES, INCLUDING MARKET CONDITIONS WITH RESPECT TO EACH BOND AT THE TIME OF THE TRANSACTION, THE EXPENSE INVOLVED AND THAT THE FIRM WAS ENTITLED TO A PROFIT. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 03/24/2016 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 565,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: INTEREST Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED, FINED $565,000 AND ORDERED TO PAY CUSTOMERS RESTITUTION OF $95,530.93, PLUS INTEREST. THE FIRM HAS PAID REMEDIATION TO RELEVANT CUSTOMERS IN THE AMOUNT OF $90,841.10. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED, FINED $565,000 AND ORDERED TO PAY CUSTOMERS RESTITUTION OF $95,530.93, PLUS INTEREST. THE FIRM HAS PAID REMEDIATION TO RELEVANT CUSTOMERS IN THE AMOUNT OF $90,841.10.
regulatory · block 8PDF pages 366–367
- Regulator name — filed text
- EUREX DEUTSCHLAND
- How was matter resolved — filed text
- Decision
Action status / disposition — filed text
THE FIRM WAS REPRIMANDED AND NO MONETARY FINE WAS IMPOSED. THE FIRM WAS REQUIRED TO BEAR THE COST OF THE PROCEEDING (APPROXIMATELY US$2,263.25). IN DETERMINING TO IMPOSE THE LOWEST FORM OF SANCTION, THE SANCTIONS COMMITTEE TOOK INTO ACCOUNT THE FACT THAT THE FIRM TOOK PROMPT CORRECTIVE ACTION AND IMPLEMENTED CONTROLS TO PREVENT SIMILAR INCIDENTS IN THE FUTURE. THE COMMITTEE ALSO NOTED THAT THERE WAS NO FINANCIAL LOSS TO OTHER MARKET PARTICIPANTS NOR ANY LOSS IN TRUST FOR THE FIRM AND THAT THE FIRM DID NOT GAIN ANY FINANCIAL ADVANTAGE.
Other filed details
Description of allegations — filed text
THE FIRM EXCEEDED THE ORDER TO TRADE RATIO MENTIONED IN SECTION 17B OF THE EUREX DEUTSCHLAND AND EUREX ZURICH EXCHANGE RULES BY 0.0955 AS PER SEPTEMBER 30, 2015.
Sanction detail — filed text
THE FIRM WAS REPRIMANDED AND NO MONETARY FINE WAS IMPOSED. THE FIRM WAS REQUIRED TO BEAR THE COST OF THE PROCEEDING (APPROXIMATELY US$2,263.25).
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) EUREX DEUTSCHLAND 2. Principal Sanction: Reprimand Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 03/17/2016 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2016/06 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Futures - Financial Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE FIRM EXCEEDED THE ORDER TO TRADE RATIO MENTIONED IN SECTION 17B OF THE EUREX DEUTSCHLAND AND EUREX ZURICH EXCHANGE RULES BY 0.0955 AS PER SEPTEMBER 30, 2015. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Decision 11. Resolution Date (MM/DD/YYYY): 03/17/2016 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: REPRIMAND AND COSTS OF THE PROCEEDING (APPROXIMATELY US$2,263.25). Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS REPRIMANDED AND NO MONETARY FINE WAS IMPOSED. THE FIRM WAS REQUIRED TO BEAR THE COST OF THE PROCEEDING (APPROXIMATELY US$2,263.25). 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS REPRIMANDED AND NO MONETARY FINE WAS IMPOSED. THE FIRM WAS REQUIRED TO BEAR THE COST OF THE PROCEEDING (APPROXIMATELY US$2,263.25). IN DETERMINING TO IMPOSE THE LOWEST FORM OF SANCTION, THE SANCTIONS COMMITTEE TOOK INTO ACCOUNT THE FACT THAT THE FIRM TOOK PROMPT CORRECTIVE ACTION AND IMPLEMENTED CONTROLS TO PREVENT SIMILAR INCIDENTS IN THE FUTURE. THE COMMITTEE ALSO NOTED THAT THERE WAS NO FINANCIAL LOSS TO OTHER MARKET PARTICIPANTS NOR ANY LOSS IN TRUST FOR THE FIRM AND THAT THE FIRM DID NOT GAIN ANY FINANCIAL ADVANTAGE.
regulatory · block 9PDF pages 367–369
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 5,000,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED AND FINED $5,000,000.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT SOLD APPROXIMATELY $168 MILLION OF STRUCTURED NOTES KNOWN AS "STRATEGIC RETURN NOTES" (SRNS) LINKED TO A PROPRIETARY VOLATILITY INDEX, WITHOUT ADEQUATELY DISCLOSING CERTAIN FIXED COSTS. THE FINDINGS STATED THAT THE FIRM EMPHASIZED IN OFFERING MATERIALS THAT INVESTORS WOULD BE SUBJECT TO A 2% SALES COMMISSION AND A 0.75% ANNUAL FEE IN CONNECTION WITH THE SRNS. THE FIRM ALSO DISCLOSED A THIRD FIXED, REGULARLY OCCURRING COST INCLUDED IN ITS PROPRIETARY VOLATILITY INDEX KNOWN AS THE "EXECUTION FACTOR" (DISTINCT FROM "HOLDING" OR "DECAY" COSTS ASSOCIATED WITH DAILY CALCULATION OF THE UNDERLYING INDEX WHICH ARE VARIABLE AND DEPEND ON MARKET CONDITIONS), BUT DID NOT DO SO IN THE SAME MANNER AS THE SALES COMMISSION AND ANNUAL FEE. AS A RESULT, THE FIRM'S DISCLOSURES IN THE OFFERING MATERIALS OF THE FIXED COSTS ASSOCIATED WITH THE SRNS WERE MATERIALLY MISLEADING, WERE NOT FAIR AND BALANCED AND FAILED TO PROVIDE A SOUND BASIS FOR EVALUATION OF THE SRNS BY NOT ADEQUATELY DISCLOSING THE EXECUTION FACTOR. THE FINDINGS ALSO STATED THE FIRM FAILED TO MAINTAIN SUPERVISORY PROCEDURES REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH APPLICABLE DISCLOSURE STANDARDS IN CONNECTION WITH THE SALE OF THE SRNS.
Sanction detail — filed text
THE FIRM WAS CENSURED AND FINED $5,000,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 06/23/2016 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2012032967901 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: N/A 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT SOLD APPROXIMATELY $168 MILLION OF STRUCTURED NOTES KNOWN AS "STRATEGIC RETURN NOTES" (SRNS) LINKED TO A PROPRIETARY VOLATILITY INDEX, WITHOUT ADEQUATELY DISCLOSING CERTAIN FIXED COSTS. THE FINDINGS STATED THAT THE FIRM EMPHASIZED IN OFFERING MATERIALS THAT INVESTORS WOULD BE SUBJECT TO A 2% SALES COMMISSION AND A 0.75% ANNUAL FEE IN CONNECTION WITH THE SRNS. THE FIRM ALSO DISCLOSED A THIRD FIXED, REGULARLY OCCURRING COST INCLUDED IN ITS PROPRIETARY VOLATILITY INDEX KNOWN AS THE "EXECUTION FACTOR" (DISTINCT FROM "HOLDING" OR "DECAY" COSTS ASSOCIATED WITH DAILY CALCULATION OF THE UNDERLYING INDEX WHICH ARE VARIABLE AND DEPEND ON MARKET CONDITIONS), BUT DID NOT DO SO IN THE SAME MANNER AS THE SALES COMMISSION AND ANNUAL FEE. AS A RESULT, THE FIRM'S DISCLOSURES IN THE OFFERING MATERIALS OF THE FIXED COSTS ASSOCIATED WITH THE SRNS WERE MATERIALLY MISLEADING, WERE NOT FAIR AND BALANCED AND FAILED TO PROVIDE A SOUND BASIS FOR EVALUATION OF THE SRNS BY NOT ADEQUATELY DISCLOSING THE EXECUTION FACTOR. THE FINDINGS ALSO STATED THE FIRM FAILED TO MAINTAIN SUPERVISORY PROCEDURES REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH APPLICABLE DISCLOSURE STANDARDS IN CONNECTION WITH THE SALE OF THE SRNS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 06/23/2016 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 5,000,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED AND FINED $5,000,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED AND FINED $5,000,000.
regulatory · block 10PDF pages 369–371
- Regulator name — filed text
- CHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED
- Monetary/Fine Amount — filed text
- $ 33,000.00
- How was matter resolved — filed text
- Decision & Order of Offer of Settlement
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THAT A VIOLATION OF THE CBOE RULES WAS COMMITTED, THE FIRM CONSENTED TO THE IMPOSITION OF THE FOLLOWING SANCTIONS: (1) A CENSURE, AND (2) A FINE IN THE AMOUNT OF $33,000.
Other filed details
Description of allegations — filed text
THE CHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED (CBOE) ALLEGED THAT THE FIRM FAILED TO REGISTER CERTAIN ASSOCIATED PERSONS AS PROPRIETARY TRADERS WITH CBOE, FAILED TO REGISTER AN ASSOCIATED PERSON AS A PROPRIETARY TRADER PRINCIPAL WITH CBOE AND FAILED TO REGISTER ITS CHIEF COMPLIANCE OFFICER AS A PROPRIETARY TRADER COMPLIANCE OFFICER WITH CBOE IN VIOLATION OF CBOE RULE 3.6A. THE FIRM SUBMITTED A LETTER OF CONSENT, WITHOUT ADMITTING OR DENYING THAT A VIOLATION OF CBOE RULES WAS COMMITTED.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THAT A VIOLATION OF THE CBOE RULES WAS COMMITTED, THE FIRM CONSENTED TO THE IMPOSITION OF THE FOLLOWING SANCTIONS: (1) A CENSURE, AND (2) A FINE IN THE AMOUNT OF $33,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) CHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 06/02/2016 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: FILE NO. 15-0091 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE CHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED (CBOE) ALLEGED THAT THE FIRM FAILED TO REGISTER CERTAIN ASSOCIATED PERSONS AS PROPRIETARY TRADERS WITH CBOE, FAILED TO REGISTER AN ASSOCIATED PERSON AS A PROPRIETARY TRADER PRINCIPAL WITH CBOE AND FAILED TO REGISTER ITS CHIEF COMPLIANCE OFFICER AS A PROPRIETARY TRADER COMPLIANCE OFFICER WITH CBOE IN VIOLATION OF CBOE RULE 3.6A. THE FIRM SUBMITTED A LETTER OF CONSENT, WITHOUT ADMITTING OR DENYING THAT A VIOLATION OF CBOE RULES WAS COMMITTED. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Decision & Order of Offer of Settlement 11. Resolution Date (MM/DD/YYYY): 06/02/2016 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 33,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THAT A VIOLATION OF THE CBOE RULES WAS COMMITTED, THE FIRM CONSENTED TO THE IMPOSITION OF THE FOLLOWING SANCTIONS: (1) A CENSURE, AND (2) A FINE IN THE AMOUNT OF $33,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THAT A VIOLATION OF THE CBOE RULES WAS COMMITTED, THE FIRM CONSENTED TO THE IMPOSITION OF THE FOLLOWING SANCTIONS: (1) A CENSURE, AND (2) A FINE IN THE AMOUNT OF $33,000.
regulatory · block 11PDF pages 371–373
- Regulator name — filed text
- VIRGINIA STATE CORPORATION COMMISSION
- Monetary/Fine Amount — filed text
- $ 5,000.00
- How was matter resolved — filed text
- Settled
Action status / disposition — filed text
ALLEGED FAILURE TO ENFORCE WRITTEN POLICIES AND PROCEDURES, FAILING TO EXERCISE DILIGENT SUPERVISION OVER THE ACTIVITIES OF ITS AGENTS, AND RECOMMENDING A PURCHASE OF A SECURITY WITHOUT REASONABLE GROUNDS. RESOLUTION EFFECTIVE MAY 26, 2016, WITH A MONETARY FINE IN THE AMOUNT OF $5,000, AND COST OF INVESTIGATION IN THE AMOUNT OF $6,500.
Other filed details
Description of allegations — filed text
ALLEGED FAILURE TO ENFORCE WRITTEN POLICIES AND PROCEDURES, FAILING TO EXERCISE DILIGENT SUPERVISION OVER THE ACTIVITIES OF ITS AGENTS, AND RECOMMENDING A PURCHASE OF A SECURITY WITHOUT REASONABLE GROUNDS.
Sanction detail — filed text
RESOLUTION EFFECTIVE MAY 26, 2016, WITH A MONETARY FINE IN THE AMOUNT OF $5,000, AND COST OF INVESTIGATION IN THE AMOUNT OF $6,500.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) VIRGINIA STATE CORPORATION COMMISSION 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: COST OF INVESTIGATION 3. Date Initiated (MM/DD/YYYY): 05/26/2016 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: SEC-2015-00060 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Annuity(ies) - Variable Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): ALLEGED FAILURE TO ENFORCE WRITTEN POLICIES AND PROCEDURES, FAILING TO EXERCISE DILIGENT SUPERVISION OVER THE ACTIVITIES OF ITS AGENTS, AND RECOMMENDING A PURCHASE OF A SECURITY WITHOUT REASONABLE GROUNDS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Settled 11. Resolution Date (MM/DD/YYYY): 05/26/2016 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 5,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: COST OF INVESTIGATION: $6,500. Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: RESOLUTION EFFECTIVE MAY 26, 2016, WITH A MONETARY FINE IN THE AMOUNT OF $5,000, AND COST OF INVESTIGATION IN THE AMOUNT OF $6,500. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). ALLEGED FAILURE TO ENFORCE WRITTEN POLICIES AND PROCEDURES, FAILING TO EXERCISE DILIGENT SUPERVISION OVER THE ACTIVITIES OF ITS AGENTS, AND RECOMMENDING A PURCHASE OF A SECURITY WITHOUT REASONABLE GROUNDS. RESOLUTION EFFECTIVE MAY 26, 2016, WITH A MONETARY FINE IN THE AMOUNT OF $5,000, AND COST OF INVESTIGATION IN THE AMOUNT OF $6,500.
regulatory · block 12PDF pages 373–375
- Regulator name — filed text
- UNITED STATES SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 10,000,000.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
IN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS, MERRILL LYNCH HAS SUBMITTED AN OFFER OF SETTLEMENT ("OFFER") WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. SOLELY FOR THE PURPOSE OF THESE PROCEEDINGS AND ANY OTHER PROCEEDINGS BROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TO WHICH THE COMMISSION IS A PARTY, AND WITHOUT ADMITTING OR DENYING THE FINDINGS HEREIN, EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER IT AND THE SUBJECT MATTER OF THESE PROCEEDINGS, WHICH ARE ADMITTED, MERRILL LYNCH CONSENTS TO THE ENTRY OF THIS ORDER INSTITUTING CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933, MAKING FINDINGS AND IMPOSING A CEASE-AND-DESIST ORDER. ACCORDINGLY, PURSUANT TO SECTION 8A OF THE SECURITIES ACT, IT IS HEREBY ORDERED THAT: MERRILL LYNCH CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTION 17(A)(2) OF THE SECURITIES ACT. MERRILL LYNCH SHALL, WITHIN TEN (10) DAYS OF THE ENTRY OF THIS ORDER, PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $10 MILLION TO THE SECURITIES AND EXCHANGE COMMISSION.
Other filed details
Description of allegations — filed text
SEC ADMIN RELEASE 33-10103 / JUNE 23, 2016: THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMS IT APPROPRIATE AND IN THE PUBLIC INTEREST THAT CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933 ("SECURITIES ACT") AGAINST MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH" OR "RESPONDENT"). ON THE BASIS OF THIS ORDER AND MERRILL LYNCH'S OFFER, THE COMMISSION FINDS THAT THESE PROCEEDINGS INVOLVE MERRILL LYNCH'S FAILURE TO ADEQUATELY DISCLOSE CERTAIN FIXED COSTS IN A PROPRIETARY VOLATILITY INDEX LINKED TO STRUCTURED NOTES KNOWN AS STRATEGIC RETURN NOTES ("SRNS") OF A BANK. MERRILL LYNCH OFFERED AND SOLD APPROXIMATELY $150 MILLION OF THESE VOLATILITY NOTES TO APPROXIMATELY 4,000 RETAIL INVESTOR ACCOUNTS IN 2010 AND 2011. THE DISCLOSURES MADE IT APPEAR AS IF THE VOLATILITY PRODUCT HAD RELATIVELY LOW FIXED COSTS. THE OFFERING MATERIALS EMPHASIZED THAT INVESTORS WOULD BE SUBJECT TO A 2 PERCENT SALES COMMISSION AND A 0.75 PERCENT ANNUAL FEE. THE OFFERING MATERIALS FAILED TO ADEQUATELY DISCLOSE A THIRD FIXED, REGULARLY OCCURRING COST INCLUDED IN ITS PROPRIETARY VOLATILITY INDEX KNOWN AS THE "EXECUTION FACTOR" (DISTINCT FROM "HOLDING" OR "DECAY" COSTS ASSOCIATED WITH DAILY CALCULATION OF THE UNDERLYING INDEX WHICH ARE VARIABLE AND DEPEND UPON MARKET CONDITIONS). AS A RESULT, THE DISCLOSURES IN THE OFFERING MATERIALS OF THE FIXED COSTS ASSOCIATED WITH THE SRNS WERE MATERIALLY MISLEADING. AS AN ISSUER OF SECURITIES, THE BANK HAD A DUTY TO DISCLOSE ALL MATERIAL INFORMATION NECESSARY TO MAKE STATEMENTS CONTAINED IN THE RETAIL PRICING SUPPLEMENTS, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING. THE BANK DELEGATED TO MERRILL LYNCH PRINCIPAL RESPONSIBILITY FOR DRAFTING AND REVIEWING THE RETAIL PRICING SUPPLEMENTS. WITHIN MERRILL LYNCH, PRIMARY RESPONSIBILITY FOR DRAFTING AND REVIEWING THE RETAIL PRICING SUPPLEMENTS WAS SPREAD AMONG DIFFERENT GROUPS (AS SUPPLEMENTED BY OUTSIDE COUNSEL). MERRILL LYNCH FAILED TO HAVE IN PLACE AN EFFECTIVE POLICY, PROCEDURE OR INTERNAL COMMUNICATION PROCESS TO PROVIDE REASONABLE ASSURANCES THAT THE INDIVIDUALS WITH PRIMARY RESPONSIBILITY FOR DRAFTING, REVIEWING AND APPROVING THE RETAIL PRICING SUPPLEMENTS PREPARED DISCLOSURES FOR THE BANK REGARDING THE EXECUTION FACTOR THAT WERE NOT MATERIALLY MISLEADING IN LIGHT OF THE DISCLOSURE OF OTHER FIXED, REGULARLY OCCURRING COSTS. AS A RESULT OF THE NEGLIGENT CONDUCT, MERRILL LYNCH VIOLATED SECTION 17(A)(2) OF THE SECURITIES ACT WHICH PROHIBITS OBTAINING MONEY OR PROPERTY BY MEANS OF MATERIAL MISSTATEMENTS AND OMISSIONS IN THE OFFER OR SALE OF SECURITIES.
Sanction detail — filed text
MERRILL LYNCH SHALL CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTION 17(A)(2) OF THE SECURITIES ACT, AND PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $10 MILLION TO THE SECURITIES AND EXCHANGE COMMISSION.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CEASE AND DESIST
3.
Date Initiated (MM/DD/YYYY):
06/23/2016
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
3-17314
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
STRATEGIC RETURN NOTES
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
SEC ADMIN RELEASE 33-10103 / JUNE 23, 2016: THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMS IT APPROPRIATE AND IN THE
PUBLIC INTEREST THAT CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF
1933 ("SECURITIES ACT") AGAINST MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH" OR "RESPONDENT"). ON THE BASIS
OF THIS ORDER AND MERRILL LYNCH'S OFFER, THE COMMISSION FINDS THAT THESE PROCEEDINGS INVOLVE MERRILL LYNCH'S FAILURE TO
ADEQUATELY DISCLOSE CERTAIN FIXED COSTS IN A PROPRIETARY VOLATILITY INDEX LINKED TO STRUCTURED NOTES KNOWN AS STRATEGIC RETURN
NOTES ("SRNS") OF A BANK. MERRILL LYNCH OFFERED AND SOLD APPROXIMATELY $150 MILLION OF THESE VOLATILITY NOTES TO APPROXIMATELY
4,000 RETAIL INVESTOR ACCOUNTS IN 2010 AND 2011. THE DISCLOSURES MADE IT APPEAR AS IF THE VOLATILITY PRODUCT HAD RELATIVELY LOW
FIXED COSTS. THE OFFERING MATERIALS EMPHASIZED THAT INVESTORS WOULD BE SUBJECT TO A 2 PERCENT SALES COMMISSION AND A 0.75
PERCENT ANNUAL FEE. THE OFFERING MATERIALS FAILED TO ADEQUATELY DISCLOSE A THIRD FIXED, REGULARLY OCCURRING COST INCLUDED IN ITS
PROPRIETARY VOLATILITY INDEX KNOWN AS THE "EXECUTION FACTOR" (DISTINCT FROM "HOLDING" OR "DECAY" COSTS ASSOCIATED WITH DAILY
CALCULATION OF THE UNDERLYING INDEX WHICH ARE VARIABLE AND DEPEND UPON MARKET CONDITIONS). AS A RESULT, THE DISCLOSURES IN THE
OFFERING MATERIALS OF THE FIXED COSTS ASSOCIATED WITH THE SRNS WERE MATERIALLY MISLEADING. AS AN ISSUER OF SECURITIES, THE BANK
HAD A DUTY TO DISCLOSE ALL MATERIAL INFORMATION NECESSARY TO MAKE STATEMENTS CONTAINED IN THE RETAIL PRICING SUPPLEMENTS, IN
LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING. THE BANK DELEGATED TO MERRILL LYNCH PRINCIPAL
RESPONSIBILITY FOR DRAFTING AND REVIEWING THE RETAIL PRICING SUPPLEMENTS. WITHIN MERRILL LYNCH, PRIMARY RESPONSIBILITY FOR
DRAFTING AND REVIEWING THE RETAIL PRICING SUPPLEMENTS WAS SPREAD AMONG DIFFERENT GROUPS (AS SUPPLEMENTED BY OUTSIDE COUNSEL).
MERRILL LYNCH FAILED TO HAVE IN PLACE AN EFFECTIVE POLICY, PROCEDURE OR INTERNAL COMMUNICATION PROCESS TO PROVIDE REASONABLE
ASSURANCES THAT THE INDIVIDUALS WITH PRIMARY RESPONSIBILITY FOR DRAFTING, REVIEWING AND APPROVING THE RETAIL PRICING SUPPLEMENTS
PREPARED DISCLOSURES FOR THE BANK REGARDING THE EXECUTION FACTOR THAT WERE NOT MATERIALLY MISLEADING IN LIGHT OF THE DISCLOSURE
OF OTHER FIXED, REGULARLY OCCURRING COSTS. AS A RESULT OF THE NEGLIGENT CONDUCT, MERRILL LYNCH VIOLATED SECTION 17(A)(2) OF THE
SECURITIES ACT WHICH PROHIBITS OBTAINING MONEY OR PROPERTY BY MEANS OF MATERIAL MISSTATEMENTS AND OMISSIONS IN THE OFFER OR
SALE OF SECURITIES.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Order
11. Resolution Date (MM/DD/YYYY):
06/23/2016
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 10,000,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
MERRILL LYNCH SHALL CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTION 17(A)(2)
OF THE SECURITIES ACT, AND PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $10 MILLION TO THE SECURITIES AND EXCHANGE
COMMISSION.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
IN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS, MERRILL LYNCH HAS SUBMITTED AN OFFER OF SETTLEMENT ("OFFER") WHICH THE
COMMISSION HAS DETERMINED TO ACCEPT. SOLELY FOR THE PURPOSE OF THESE PROCEEDINGS AND ANY OTHER PROCEEDINGS BROUGHT BY OR ON
BEHALF OF THE COMMISSION, OR TO WHICH THE COMMISSION IS A PARTY, AND WITHOUT ADMITTING OR DENYING THE FINDINGS HEREIN, EXCEPT AS
TO THE COMMISSION'S JURISDICTION OVER IT AND THE SUBJECT MATTER OF THESE PROCEEDINGS, WHICH ARE ADMITTED, MERRILL LYNCH CONSENTS
TO THE ENTRY OF THIS ORDER INSTITUTING CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933, MAKING
FINDINGS AND IMPOSING A CEASE-AND-DESIST ORDER. ACCORDINGLY, PURSUANT TO SECTION 8A OF THE SECURITIES ACT, IT IS HEREBY ORDERED
THAT: MERRILL LYNCH CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTION 17(A)(2) OF
THE SECURITIES ACT. MERRILL LYNCH SHALL, WITHIN TEN (10) DAYS OF THE ENTRY OF THIS ORDER, PAY A CIVIL MONETARY PENALTY IN THE AMOUNT
OF $10 MILLION TO THE SECURITIES AND EXCHANGE COMMISSION.regulatory · block 13MERRILL LYNCH PROFESSIONAL CLEARING CORP.PDF pages 375–377
- Advisory affiliate name — filed text
- MERRILL LYNCH PROFESSIONAL CLEARING CORP.
- Regulator name — filed text
- UNITED STATES SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 358,000,000.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
IN DETERMINING TO ACCEPT ML'S OFFER, THE SEC CONSIDERED REMEDIAL ACTS PROMPTLY UNDERTAKEN BY ML AND SUBSTANTIAL COOPERATION AFFORDED THE SEC STAFF DURING THE COURSE OF ITS INVESTIGATION. IN THE ORDER, (I) MERRILL LYNCH AND MLPRO WERE CENSURED, (II) MERRILL LYNCH WAS ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 15(C)(3) AND 17(A)(1) OF THE EXCHANGE ACT AND RULES 15C3-3, 17A-3(A)(10), 17A-5(A), 17A-5(D)(2)(II), 17A-5(D)(3), 17A-11(E) AND 21F-17 THEREUNDER, (III) MLPRO WAS ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 15(C)(3) AND 17(A)(1) OF THE EXCHANGE ACT AND RULES 15C3-3, 17A-3(A)(10) AND 17A-5(A) THEREUNDER, (IV) MERRILL LYNCH AND MLPRO WERE ORDERED TO PAY DISGORGEMENT OF $50,000,000 AND PREJUDGMENT INTEREST IN THE AMOUNT OF $7,000,000, AND (V) MERRILL LYNCH WAS ORDERED TO PAY A CIVIL MONETARY PENALTY OF $358,000,000. NO CUSTOMERS WERE HARMED, AND THE ISSUES RELATED TO ML'S PROCEDURES AND CONTROLS HAVE BEEN CORRECTED. THE PENALTY WAS PAID ON JUNE 29, 2016.
Other filed details
Description of allegations — filed text
ON JUNE 23, 2016, THE SECURITIES AND EXCHANGE COMMISSION ("SEC") ISSUED AN ADMINISTRATIVE ORDER IN WHICH IT FOUND THAT MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH") AND MERRILL LYNCH PROFESSIONAL CLEARING CORP. ("MLPRO") (COLLECTIVELY, "ML") HAD WILLFULLY VIOLATED SECTION 15(C)(3) OF THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND RULE 15C3-3 THEREUNDER AND SECTION 17(A)(1) OF THE EXCHANGE ACT AND RULES 17A-3(A)(10) AND 17A-5(A) THEREUNDER, AND THAT MERRILL LYNCH WILLFULLY VIOLATED SECTION 17(A)(1) OF THE EXCHANGE ACT AND RULES 17A-5(D)(3) (AS IT EXISTED PRIOR TO AMENDMENTS TO RULE 17A-5 IN 2014), 17A-5(D)(2)(II), 17A-5(D)(3) AND 17A-11(E) THEREUNDER, AND EXCHANGE ACT RULE 21F-17. SPECIFICALLY, THE ORDER FOUND THAT (I) ML ENGAGED IN A SERIES OF COMPLEX TRADES THAT ALLOWED IT TO USE CUSTOMER CASH TO FINANCE FIRM INVENTORY AND (II) MERRILL LYNCH ALLOWED CERTAIN OF ITS CLEARING BANKS TO HOLD LIENS ON CUSTOMER SECURITIES.
Sanction detail — filed text
IN DETERMINING TO ACCEPT ML'S OFFER, THE SEC CONSIDERED REMEDIAL ACTS PROMPTLY UNDERTAKEN BY ML AND SUBSTANTIAL COOPERATION AFFORDED THE SEC STAFF DURING THE COURSE OF ITS INVESTIGATION. IN THE ORDER, (I) MERRILL LYNCH AND MLPRO WERE CENSURED, (II) MERRILL LYNCH WAS ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 15(C)(3) AND 17(A)(1) OF THE EXCHANGE ACT AND RULES 15C3-3, 17A-3(A)(10), 17A-5(A), 17A-5(D)(2)(II), 17A-5(D) (3), 17A-11(E) AND 21F-17 THEREUNDER, (III) MLPRO WAS ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 15(C)(3) AND 17(A)(1) OF THE EXCHANGE ACT AND RULES 15C3-3, 17A-3(A)(10) AND 17A-5(A) THEREUNDER, (IV) MERRILL LYNCH AND MLPRO WERE ORDERED TO PAY DISGORGEMENT OF $50,000,000 AND PREJUDGMENT INTEREST IN THE AMOUNT OF $7,000,000, AND (V) MERRILL LYNCH WAS ORDERED TO PAY A CIVIL MONETARY PENALTY OF $358,000,000. NO CUSTOMERS WERE HARMED, AND THE ISSUES RELATED TO ML'S PROCEDURES AND CONTROLS HAVE BEEN CORRECTED. THE PENALTY WAS PAID ON JUNE 29, 2016.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
16139
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
MERRILL LYNCH
PROFESSIONAL CLEARING
CORP.
(For individuals, Last, First,
Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CEASE AND DESIST; CENSURE; DISGORGEMENT; PREJUDGMENT INTEREST
3.
Date Initiated (MM/DD/YYYY):
06/23/2016
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
3-17312
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
ON JUNE 23, 2016, THE SECURITIES AND EXCHANGE COMMISSION ("SEC") ISSUED AN ADMINISTRATIVE ORDER IN WHICH IT FOUND THAT MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH") AND MERRILL LYNCH PROFESSIONAL CLEARING CORP. ("MLPRO")
(COLLECTIVELY, "ML") HAD WILLFULLY VIOLATED SECTION 15(C)(3) OF THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND RULE 15C3-3
THEREUNDER AND SECTION 17(A)(1) OF THE EXCHANGE ACT AND RULES 17A-3(A)(10) AND 17A-5(A) THEREUNDER, AND THAT MERRILL LYNCH
WILLFULLY VIOLATED SECTION 17(A)(1) OF THE EXCHANGE ACT AND RULES 17A-5(D)(3) (AS IT EXISTED PRIOR TO AMENDMENTS TO RULE 17A-5 IN
2014), 17A-5(D)(2)(II), 17A-5(D)(3) AND 17A-11(E) THEREUNDER, AND EXCHANGE ACT RULE 21F-17. SPECIFICALLY, THE ORDER FOUND THAT (I) ML
ENGAGED IN A SERIES OF COMPLEX TRADES THAT ALLOWED IT TO USE CUSTOMER CASH TO FINANCE FIRM INVENTORY AND (II) MERRILL LYNCH
ALLOWED CERTAIN OF ITS CLEARING BANKS TO HOLD LIENS ON CUSTOMER SECURITIES.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Order
11. Resolution Date (MM/DD/YYYY):
06/23/2016
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 358,000,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
PREJUDGMENT INTEREST
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
IN DETERMINING TO ACCEPT ML'S OFFER, THE SEC CONSIDERED REMEDIAL ACTS PROMPTLY UNDERTAKEN BY ML AND SUBSTANTIAL
COOPERATION AFFORDED THE SEC STAFF DURING THE COURSE OF ITS INVESTIGATION. IN THE ORDER, (I) MERRILL LYNCH AND MLPRO WERE
CENSURED, (II) MERRILL LYNCH WAS ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE
VIOLATIONS OF SECTIONS 15(C)(3) AND 17(A)(1) OF THE EXCHANGE ACT AND RULES 15C3-3, 17A-3(A)(10), 17A-5(A), 17A-5(D)(2)(II), 17A-5(D)
(3), 17A-11(E) AND 21F-17 THEREUNDER, (III) MLPRO WAS ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS
AND ANY FUTURE VIOLATIONS OF SECTIONS 15(C)(3) AND 17(A)(1) OF THE EXCHANGE ACT AND RULES 15C3-3, 17A-3(A)(10) AND 17A-5(A)
THEREUNDER, (IV) MERRILL LYNCH AND MLPRO WERE ORDERED TO PAY DISGORGEMENT OF $50,000,000 AND PREJUDGMENT INTEREST IN THE
AMOUNT OF $7,000,000, AND (V) MERRILL LYNCH WAS ORDERED TO PAY A CIVIL MONETARY PENALTY OF $358,000,000. NO CUSTOMERS WERE
HARMED, AND THE ISSUES RELATED TO ML'S PROCEDURES AND CONTROLS HAVE BEEN CORRECTED. THE PENALTY WAS PAID ON JUNE 29, 2016.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
IN DETERMINING TO ACCEPT ML'S OFFER, THE SEC CONSIDERED REMEDIAL ACTS PROMPTLY UNDERTAKEN BY ML AND SUBSTANTIAL COOPERATION
AFFORDED THE SEC STAFF DURING THE COURSE OF ITS INVESTIGATION. IN THE ORDER, (I) MERRILL LYNCH AND MLPRO WERE CENSURED, (II) MERRILL
LYNCH WAS ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 15(C)(3)
AND 17(A)(1) OF THE EXCHANGE ACT AND RULES 15C3-3, 17A-3(A)(10), 17A-5(A), 17A-5(D)(2)(II), 17A-5(D)(3), 17A-11(E) AND 21F-17 THEREUNDER,
(III) MLPRO WAS ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS
15(C)(3) AND 17(A)(1) OF THE EXCHANGE ACT AND RULES 15C3-3, 17A-3(A)(10) AND 17A-5(A) THEREUNDER, (IV) MERRILL LYNCH AND MLPRO WERE
ORDERED TO PAY DISGORGEMENT OF $50,000,000 AND PREJUDGMENT INTEREST IN THE AMOUNT OF $7,000,000, AND (V) MERRILL LYNCH WAS
ORDERED TO PAY A CIVIL MONETARY PENALTY OF $358,000,000. NO CUSTOMERS WERE HARMED, AND THE ISSUES RELATED TO ML'S PROCEDURES AND
CONTROLS HAVE BEEN CORRECTED. THE PENALTY WAS PAID ON JUNE 29, 2016.regulatory · block 14PDF pages 377–379
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 20,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED AND FINED $20,000.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT MADE PUBLICLY AVAILABLE A REPORT ON ITS ROUTING OF NON-DIRECTED ORDERS IN COVERED SECURITIES DURING THE TIME PERIOD EXAMINED. THE FINDINGS STATED THAT THESE REPORTS INCLUDED INCOMPLETE INFORMATION AS TO THE IDENTITY OF THE VENUES TO WHICH THE LARGEST NUMBER OF TOTAL NON-DIRECTED ORDERS WERE ROUTED FOR EXECUTION AND OTHER VENUES TO WHICH FIVE PERCENT OR MORE OF NON-DIRECTED ORDERS WERE ROUTED FOR EXECUTION.
Sanction detail — filed text
THE FIRM WAS CENSURED AND FINED $20,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 08/26/2016 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2014042962101 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: UNSPECIFIED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT MADE PUBLICLY AVAILABLE A REPORT ON ITS ROUTING OF NON-DIRECTED ORDERS IN COVERED SECURITIES DURING THE TIME PERIOD EXAMINED. THE FINDINGS STATED THAT THESE REPORTS INCLUDED INCOMPLETE INFORMATION AS TO THE IDENTITY OF THE VENUES TO WHICH THE LARGEST NUMBER OF TOTAL NON-DIRECTED ORDERS WERE ROUTED FOR EXECUTION AND OTHER VENUES TO WHICH FIVE PERCENT OR MORE OF NON-DIRECTED ORDERS WERE ROUTED FOR EXECUTION. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 08/26/2016 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 20,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED AND FINED $20,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED AND FINED $20,000.
regulatory · block 15PDF pages 379–381
- Regulator name — filed text
- CHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED
- Monetary/Fine Amount — filed text
- $ 35,000.00
- How was matter resolved — filed text
- Decision & Order of Offer of Settlement
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE VIOLATIONS ALLEGED IN THE STATEMENT OF CHARGES, MERRILL LYNCH AGREED TO A $35,000 FINE AND A CENSURE. THE FINE WAS PAID ON JANUARY 4, 2017.
Other filed details
Description of allegations — filed text
THE BUSINESS CONDUCT COMMITTEE OF THE CHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED ("CBOE") ALLEGED THAT, FROM IN OR ABOUT MARCH 2012 THROUGH IN OR ABOUT MARCH 2013, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH") (1) MISMARKED NUMEROUS ORDERS AS SHORT EXEMPT WHEN THE SUBJECT ORDERS DID NOT SATISFY THE REQUIREMENTS OF REGULATION SHO RULE 201 IN VIOLATION OF CBOE RULE 4.2, SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND RULE 17A-3 THEREUNDER, AND REGULATION SHO RULES 200 AND 201, (2) FAILED TO HAVE ADEQUATE SUPERVISORY POLICIES AND PROCEDURES TO IDENTIFY SHORT EXEMPT ORDERS THAT WERE NOT ELIGIBLE FOR SUCH MARKING AND FAILED TO REGULARLY SURVEIL TO ASCERTAIN THE EFFECTIVENESS OF THE POLICIES AND PROCEDURES REQUIRED BY REGULATION SHO RULE 201 AND TAKE PROMPT ACTION TO REMEDY DEFICIENCIES IN SUCH POLICIES AND PROCEDURES IN VIOLATION OF CBOE RULE 4.2 AND REGULATION SHO RULE 201, AND (3) FAILED TO ADEQUATELY SUPERVISE TO ASSURE COMPLIANCE WITH THE REQUIREMENTS OF RULES 200 AND 201 OF REGULATION SHO PERTAINING TO THE ACCURATE MARKING OF SALE ORDERS IN VIOLATION OF CBOE RULE 4.2.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE VIOLATIONS ALLEGED IN THE STATEMENT OF CHARGES, MERRILL LYNCH AGREED TO A $35,000 FINE AND A CENSURE. THE FINE WAS PAID ON JANUARY 4, 2017.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
CHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE
3.
Date Initiated (MM/DD/YYYY):
07/07/2016
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
16-0021/ 20150459492
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Equity Listed (Common & Preferred Stock)
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE BUSINESS CONDUCT COMMITTEE OF THE CHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED ("CBOE") ALLEGED THAT, FROM IN OR ABOUT
MARCH 2012 THROUGH IN OR ABOUT MARCH 2013, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH") (1) MISMARKED
NUMEROUS ORDERS AS SHORT EXEMPT WHEN THE SUBJECT ORDERS DID NOT SATISFY THE REQUIREMENTS OF REGULATION SHO RULE 201 IN
VIOLATION OF CBOE RULE 4.2, SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND RULE 17A-3 THEREUNDER, AND
REGULATION SHO RULES 200 AND 201, (2) FAILED TO HAVE ADEQUATE SUPERVISORY POLICIES AND PROCEDURES TO IDENTIFY SHORT EXEMPT
ORDERS THAT WERE NOT ELIGIBLE FOR SUCH MARKING AND FAILED TO REGULARLY SURVEIL TO ASCERTAIN THE EFFECTIVENESS OF THE POLICIES AND
PROCEDURES REQUIRED BY REGULATION SHO RULE 201 AND TAKE PROMPT ACTION TO REMEDY DEFICIENCIES IN SUCH POLICIES AND PROCEDURES
IN VIOLATION OF CBOE RULE 4.2 AND REGULATION SHO RULE 201, AND (3) FAILED TO ADEQUATELY SUPERVISE TO ASSURE COMPLIANCE WITH THE
REQUIREMENTS OF RULES 200 AND 201 OF REGULATION SHO PERTAINING TO THE ACCURATE MARKING OF SALE ORDERS IN VIOLATION OF CBOE RULE
4.2.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Decision & Order of Offer of Settlement
11. Resolution Date (MM/DD/YYYY):
12/08/2016
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 35,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE VIOLATIONS ALLEGED IN THE STATEMENT OF CHARGES, MERRILL LYNCH AGREED TO A $35,000 FINE AND
A CENSURE. THE FINE WAS PAID ON JANUARY 4, 2017.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE VIOLATIONS ALLEGED IN THE STATEMENT OF CHARGES, MERRILL LYNCH AGREED TO A $35,000 FINE AND A
CENSURE. THE FINE WAS PAID ON JANUARY 4, 2017.regulatory · block 16PDF pages 381–382
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 50,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED, FINED $50,000, AND UNDERTAKES TO SUBMIT TO FINRA, NO LATER THAN 30 DAYS AFTER THE AWC BECOMES FINAL, A SIGNED, DATED LETTER OR E-MAIL OF THE REGISTERED PRINCIPAL ACKNOWLEDGING THAT THE FIRM REVISED ITS WRITTEN SUPERVISORY PROCEDURES (WSPS) TO ADDRESS THE DEFICIENCIES DESCRIBED IN THE AWC, AND THE DATE THE REVISED PROCEDURES WERE IMPLEMENTED.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IN CUSTOMER TRANSACTIONS EXECUTED ON THE FIRM'S ALTERNATIVE TRADING SYSTEM, IT FAILED TO USE REASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER- DEALER MARKET AND FAILED TO BUY OR SELL IN SUCH MARKET SO THAT THE RESULTANT PRICE TO THE CUSTOMER WAS AS FAVORABLE AS POSSIBLE UNDER PREVAILING MARKET CONDITIONS. THE FINDINGS STATED THAT THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONS, AND FINRA RULES, CONCERNING BEST EXECUTION. SPECIFICALLY, THE FIRM, WHEN PERFORMING ITS BEST EXECUTION REVIEWS FOR TRANSACTIONS EXECUTED ON ITS ALTERNATIVE TRADING SYSTEM, FAILED TO USE AN INDEPENDENT DATA SOURCE TO EVALUATE EXECUTIONS OR TO REVIEW THE MARKET DATA USED BY THE ALTERNATIVE TRADING SYSTEM FOR ORDER HANDLING AND EXECUTION.
Sanction detail — filed text
THE FIRM WAS CENSURED, FINED $50,000, AND UNDERTAKES TO SUBMIT TO FINRA, NO LATER THAN 30 DAYS AFTER THE AWC BECOMES FINAL, A SIGNED, DATED LETTER OR E-MAIL OF THE REGISTERED PRINCIPAL ACKNOWLEDGING THAT THE FIRM REVISED ITS WRITTEN SUPERVISORY PROCEDURES (WSPS) TO ADDRESS THE DEFICIENCIES DESCRIBED IN THE AWC, AND THE DATE THE REVISED PROCEDURES WERE IMPLEMENTED.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 09/20/2016 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2011028816701 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: UNSPECIFIED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IN CUSTOMER TRANSACTIONS EXECUTED ON THE FIRM'S ALTERNATIVE TRADING SYSTEM, IT FAILED TO USE REASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER- DEALER MARKET AND FAILED TO BUY OR SELL IN SUCH MARKET SO THAT THE RESULTANT PRICE TO THE CUSTOMER WAS AS FAVORABLE AS POSSIBLE UNDER PREVAILING MARKET CONDITIONS. THE FINDINGS STATED THAT THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONS, AND FINRA RULES, CONCERNING BEST EXECUTION. SPECIFICALLY, THE FIRM, WHEN PERFORMING ITS BEST EXECUTION REVIEWS FOR TRANSACTIONS EXECUTED ON ITS ALTERNATIVE TRADING SYSTEM, FAILED TO USE AN INDEPENDENT DATA SOURCE TO EVALUATE EXECUTIONS OR TO REVIEW THE MARKET DATA USED BY THE ALTERNATIVE TRADING SYSTEM FOR ORDER HANDLING AND EXECUTION. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 09/20/2016 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 50,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKINGS Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED, FINED $50,000, AND UNDERTAKES TO SUBMIT TO FINRA, NO LATER THAN 30 DAYS AFTER THE AWC BECOMES FINAL, A SIGNED, DATED LETTER OR E-MAIL OF THE REGISTERED PRINCIPAL ACKNOWLEDGING THAT THE FIRM REVISED ITS WRITTEN SUPERVISORY PROCEDURES (WSPS) TO ADDRESS THE DEFICIENCIES DESCRIBED IN THE AWC, AND THE DATE THE REVISED PROCEDURES WERE IMPLEMENTED. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED, FINED $50,000, AND UNDERTAKES TO SUBMIT TO FINRA, NO LATER THAN 30 DAYS AFTER THE AWC BECOMES FINAL, A SIGNED, DATED LETTER OR E-MAIL OF THE REGISTERED PRINCIPAL ACKNOWLEDGING THAT THE FIRM REVISED ITS WRITTEN SUPERVISORY PROCEDURES (WSPS) TO ADDRESS THE DEFICIENCIES DESCRIBED IN THE AWC, AND THE DATE THE REVISED PROCEDURES WERE IMPLEMENTED.
regulatory · block 17ZIMMERMAN, ANDREW, HUGHESPDF pages 383–384
- Advisory affiliate name — filed text
- ZIMMERMAN, ANDREW, HUGHES
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 2007585 This advisory affiliate is a Firm an Individual Registered: Yes No Name: ZIMMERMAN, ANDREW, HUGHES (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 10/27/2016 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: R2016-0088 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 18CHANG, WARRENPDF pages 384–386
- Advisory affiliate name — filed text
- CHANG, WARREN
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 5783926 This advisory affiliate is a Firm an Individual Registered: Yes No Name: CHANG, WARREN (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 01/19/2017 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: OFR FILE NO.: 93747 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 19DEHN, DARYL, WPDF pages 386–388
- Advisory affiliate name — filed text
- DEHN, DARYL, W
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 4778271 This advisory affiliate is a Firm an Individual Registered: Yes No Name: DEHN, DARYL, W (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. y ( ) g This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 01/27/2017 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: PLBS 11034-A (AR) 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 20Allan, Nas, ADELPDF pages 388–389
- Advisory affiliate name — filed text
- Allan, Nas, ADEL
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 4562149 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Allan, Nas, ADEL (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 08/15/2017 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2015046971701 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 21Macbeth, Scott, TPDF pages 389–391
- Advisory affiliate name — filed text
- Macbeth, Scott, T
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 3166221 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Macbeth, Scott, T (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 01/25/2018 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: OBS 3121-A (AR) 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 22BARBER, LAWRENCE, KIMBALLPDF pages 391–393
- Advisory affiliate name — filed text
- BARBER, LAWRENCE, KIMBALL
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 2932803 This advisory affiliate is a Firm an Individual Registered: Yes No Name: BARBER, LAWRENCE, KIMBALL (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 02/21/2018 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 18-011-S 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 23Smith, Kevin, PPDF pages 393–394
- Advisory affiliate name — filed text
- Smith, Kevin, P
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 6345204 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Smith, Kevin, P (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 10/24/2018 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 54631 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 24MCKAY, MICHAEL, DAVIDPDF pages 395–396
- Advisory affiliate name — filed text
- MCKAY, MICHAEL, DAVID
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 6423726 This advisory affiliate is a Firm an Individual Registered: Yes No Name: MCKAY, MICHAEL, DAVID (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 01/17/2019 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: PLBS 12640-A 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 25TOSHA, STEPHEN, PATRICKPDF pages 396–398
- Advisory affiliate name — filed text
- TOSHA, STEPHEN, PATRICK
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 5970854 This advisory affiliate is a Firm an Individual Registered: Yes No Name: TOSHA, STEPHEN, PATRICK (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 05/08/2019 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2018058794401 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 26TOSHA, STEPHEN, PATRICKPDF pages 398–400
- Advisory affiliate name — filed text
- TOSHA, STEPHEN, PATRICK
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 5970854 This advisory affiliate is a Firm an Individual Registered: Yes No Name: TOSHA, STEPHEN, PATRICK (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. y ( ) g This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 01/20/2020 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: FILE NO. OBS 3809-A 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 27Hancock, Elizabeth, LouisaPDF pages 400–401
- Advisory affiliate name — filed text
- Hancock, Elizabeth, Louisa
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7221056 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Hancock, Elizabeth, Louisa (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 09/17/2019 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 19A-033-INS 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 28BOMBERRY, RYANPDF pages 401–403
- Advisory affiliate name — filed text
- BOMBERRY, RYAN
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 6753400 This advisory affiliate is a Firm an Individual Registered: Yes No Name: BOMBERRY, RYAN (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 11/30/2017 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 70387 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 29Hardison, DonPDF pages 403–405
- Advisory affiliate name — filed text
- Hardison, Don
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 5083497 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Hardison, Don (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 01/27/2021 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2020-0392-S 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 30EUSTAQUIO, JOSE, ARQUIMEDESPDF pages 405–406
- Advisory affiliate name — filed text
- EUSTAQUIO, JOSE, ARQUIMEDES
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 6149600 This advisory affiliate is a Firm an Individual Registered: Yes No Name: EUSTAQUIO, JOSE, ARQUIMEDES (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 11/03/2016 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 66023-SR 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 31BERGSTROM, BRANDON, LUKEPDF pages 407–408
- Advisory affiliate name — filed text
- BERGSTROM, BRANDON, LUKE
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 2887425 This advisory affiliate is a Firm an Individual Registered: Yes No Name: BERGSTROM, BRANDON, LUKE (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 03/19/2021 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: CSB-01379819 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 32TENTLER, ALLAN, LEOPDF pages 408–410
- Advisory affiliate name — filed text
- TENTLER, ALLAN, LEO
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 5601241 This advisory affiliate is a Firm an Individual Registered: Yes No Name: TENTLER, ALLAN, LEO (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 11/18/2021 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 287743-21-AG 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 33Georger, F, DPDF pages 410–412
- Advisory affiliate name — filed text
- Georger, F, D
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 3057970 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Georger, F, D (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 11/17/2021 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2021-0220-S 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 34GATTO, JOHN, CHRISTOPHERPDF pages 412–413
- Advisory affiliate name — filed text
- GATTO, JOHN, CHRISTOPHER
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 1415454 This advisory affiliate is a Firm an Individual Registered: Yes No Name: GATTO, JOHN, CHRISTOPHER (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 08/01/2022 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: CSB-2021-01395558 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 35RUSSON, CHRISTOPHER, JOHNPDF pages 413–415
- Advisory affiliate name — filed text
- RUSSON, CHRISTOPHER, JOHN
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 5108670 This advisory affiliate is a Firm an Individual Registered: Yes No Name: RUSSON, CHRISTOPHER, JOHN (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 12/16/2016 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 68556-SR 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 36KELSO, JASON, PPDF pages 415–417
- Advisory affiliate name — filed text
- KELSO, JASON, P
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 4828284 This advisory affiliate is a Firm an Individual Registered: Yes No Name: KELSO, JASON, P (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 02/28/2023 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 112042-SR 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 37Smith, Jameson, sPDF pages 417–418
- Advisory affiliate name — filed text
- Smith, Jameson, s
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7692959 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Smith, Jameson, s (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 10/20/2020 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: NA 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 38Stukes, Vaughn, MauricePDF pages 419–420
- Advisory affiliate name — filed text
- Stukes, Vaughn, Maurice
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 7693046 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Stukes, Vaughn, Maurice (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 09/23/2022 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: L21000192570 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 39SANCHEZ CARRASQUILLO, FELIX, RENEPDF pages 420–422
- Advisory affiliate name — filed text
- SANCHEZ CARRASQUILLO, FELIX, RENE
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 5392527 This advisory affiliate is a Firm an Individual Registered: Yes No Name: SANCHEZ CARRASQUILLO, FELIX, RENE (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 06/15/2018 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 89202-SR 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 40SHERMAN, TODD, GPDF pages 422–424
- Advisory affiliate name — filed text
- SHERMAN, TODD, G
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 5171201 This advisory affiliate is a Firm an Individual Registered: Yes No Name: SHERMAN, TODD, G (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 11/09/2017 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: H-40835 LA 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 41Martinez, Eduardo, AndrewPDF pages 424–425
- Advisory affiliate name — filed text
- Martinez, Eduardo, Andrew
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 5950799 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Martinez, Eduardo, Andrew (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 08/22/2023 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 21-01565 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 42Reid, Wayne, DalePDF pages 425–427
- Advisory affiliate name — filed text
- Reid, Wayne, Dale
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 3103262 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Reid, Wayne, Dale (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 01/30/2024 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 118067-SR 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 43Senegal, Ronald, CHARLESPDF pages 427–429
- Advisory affiliate name — filed text
- Senegal, Ronald, CHARLES
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 1511146 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Senegal, Ronald, CHARLES (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 02/02/2024 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2024-0019-S 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 44NICHOLAS, STEFANPDF pages 429–430
- Advisory affiliate name — filed text
- NICHOLAS, STEFAN
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 6177685 This advisory affiliate is a Firm an Individual Registered: Yes No Name: NICHOLAS, STEFAN (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 11/17/2022 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2022-04014 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 45Hardison, DonPDF pages 431–432
- Advisory affiliate name — filed text
- Hardison, Don
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 5083497 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Hardison, Don (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 03/15/2024 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: N/A 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 46somlo, marvinPDF pages 432–434
- Advisory affiliate name — filed text
- somlo, marvin
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 6617205 This advisory affiliate is a Firm an Individual Registered: Yes No Name: somlo, marvin (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 06/12/2024 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2022073421501 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 47Wallach, Roger, MPDF pages 434–436
- Advisory affiliate name — filed text
- Wallach, Roger, M
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 2460445 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Wallach, Roger, M (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. y ( ) g This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 06/18/2024 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2024-0148-S 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 48Duckett, Stephen, GregoryPDF pages 436–437
- Advisory affiliate name — filed text
- Duckett, Stephen, Gregory
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 6341604 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Duckett, Stephen, Gregory (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 10/28/2024 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 24SEC145 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 49Friedman, Dina, MPDF pages 437–439
- Advisory affiliate name — filed text
- Friedman, Dina, M
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 5303648 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Friedman, Dina, M (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 01/30/2017 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2024-06228 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 50Canup, Leanna, ValliePDF pages 439–441
- Advisory affiliate name — filed text
- Canup, Leanna, Vallie
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 6686485 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Canup, Leanna, Vallie (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 07/10/2024 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: NA 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 51RUSSON, CHRISTOPHER, JOHNPDF pages 441–442
- Advisory affiliate name — filed text
- RUSSON, CHRISTOPHER, JOHN
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 5108670 This advisory affiliate is a Firm an Individual Registered: Yes No Name: RUSSON, CHRISTOPHER, JOHN (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 09/30/2025 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: CSB01509063 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 52Culpepper, RyanPDF pages 443–444
- Advisory affiliate name — filed text
- Culpepper, Ryan
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 4225424 This advisory affiliate is a Firm an Individual Registered: Yes No Name: Culpepper, Ryan (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 10/24/2023 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2023-0243-S 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 53RAMIREZ, RICARDOPDF pages 444–446
- Advisory affiliate name — filed text
- RAMIREZ, RICARDO
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 4974913 This advisory affiliate is a Firm an Individual Registered: Yes No Name: RAMIREZ, RICARDO (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 03/27/2026 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 25-00601-A 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 54TMC BONDS L.L.C.PDF pages 446–448
- Advisory affiliate name — filed text
- TMC BONDS L.L.C.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 104507 This advisory affiliate is a Firm an Individual Registered: Yes No Name: TMC BONDS L.L.C. (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. y ( ) g This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 2. Principal Sanction: Other Sanctions: 3. Date Initiated (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: 11. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided).
regulatory · block 55PDF pages 448–449
- Regulator name — filed text
- BATS BZX EXCHANGE, INC.
- Monetary/Fine Amount — filed text
- $ 300,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
SOLELY FOR THE PURPOSE OF SETTLING THESE PROCEEDINGS, MERRILL LYNCH ENTERED INTO THE CONSENT WITHOUT ADMITTING OR DENYING THE FINDINGS REFERRED TO IN THE CONSENT. THE ALLEGATIONS, DISPOSITIONS, FINDINGS AND SANCTIONS OF THE CONSENT ARE DESCRIBED ABOVE IN ITEMS 7 AND 12. PURSUANT TO BATS BZX RULES, THE DECISION IN THIS MATTER IS FINAL 20 BUSINESS DAYS AFTER THE ISSUANCE OF THE CONSENT. THIS AWC BECAME FINAL OCTOBER 25, 2016.
Other filed details
Description of allegations — filed text
ON SEPTEMBER 26, 2016, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH") ENTERED INTO A LETTER OF ACCEPTANCE, WAIVER AND CONSENT (THE "CONSENT") WITH BATS BZX EXCHANGE, INC. ("BATS BZX"). THE CONSENT FINDS THAT MERRILL LYNCH VIOLATED RULE 15C3-5 UNDER THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND BATS BZX RULES 3.1, 3.2, AND 5.1 BY FAILING TO ESTABLISH, DOCUMENT, AND MAINTAIN A SYSTEM OF RISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES REASONABLY DESIGNED TO MANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKS OF MARKET ACCESS.
Sanction detail — filed text
THE CONSENT CENSURES MERRILL LYNCH AND REQUIRES MERRILL LYNCH TO PAY A FINE OF $300,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
BATS BZX EXCHANGE, INC.
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE
3.
Date Initiated (MM/DD/YYYY):
09/26/2016
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
20120344693-02
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
UNSPECIFIED SECURITIES
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
ON SEPTEMBER 26, 2016, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH") ENTERED INTO A LETTER OF ACCEPTANCE,
WAIVER AND CONSENT (THE "CONSENT") WITH BATS BZX EXCHANGE, INC. ("BATS BZX"). THE CONSENT FINDS THAT MERRILL LYNCH VIOLATED RULE
15C3-5 UNDER THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND BATS BZX RULES 3.1, 3.2, AND 5.1 BY FAILING TO ESTABLISH,
DOCUMENT, AND MAINTAIN A SYSTEM OF RISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES REASONABLY DESIGNED TO MANAGE THE
FINANCIAL, REGULATORY, AND OTHER RISKS OF MARKET ACCESS.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
10/25/2016
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 300,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE CONSENT CENSURES MERRILL LYNCH AND REQUIRES MERRILL LYNCH TO PAY A FINE OF $300,000.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
SOLELY FOR THE PURPOSE OF SETTLING THESE PROCEEDINGS, MERRILL LYNCH ENTERED INTO THE CONSENT WITHOUT ADMITTING OR DENYING THE
FINDINGS REFERRED TO IN THE CONSENT. THE ALLEGATIONS, DISPOSITIONS, FINDINGS AND SANCTIONS OF THE CONSENT ARE DESCRIBED ABOVE IN
ITEMS 7 AND 12. PURSUANT TO BATS BZX RULES, THE DECISION IN THIS MATTER IS FINAL 20 BUSINESS DAYS AFTER THE ISSUANCE OF THE CONSENT.
THIS AWC BECAME FINAL OCTOBER 25, 2016.regulatory · block 56PDF pages 449–451
- Regulator name — filed text
- BATS EDGX EXCHANGE, INC.
- Monetary/Fine Amount — filed text
- $ 200,000.00
- How was matter resolved — filed text
- Settled
Action status / disposition — filed text
SOLELY FOR THE PURPOSE OF SETTLING THESE PROCEEDINGS, MERRILL LYNCH ENTERED INTO THE CONSENT WITHOUT ADMITTING OR DENYING THE FINDINGS REFERRED TO IN THE CONSENT. THE ALLEGATIONS, DISPOSITIONS, FINDINGS AND SANCTIONS OF THE CONSENT ARE DESCRIBED ABOVE IN ITEMS 7 AND 12.
Other filed details
Description of allegations — filed text
ON SEPTEMBER 26, 2016, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH") ENTERED INTO A LETTER OF ACCEPTANCE, WAIVER AND CONSENT (THE "CONSENT") WITH BATS EDGX EXCHANGE, INC. ("BATS EDGX"). THE CONSENT FINDS THAT IT VIOLATED RULE 15C3-5 UNDER THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND BATS EDGX RULES 3.1, 3.2, AND 5.1 BY FAILING TO ESTABLISH, DOCUMENT, AND MAINTAIN A SYSTEM OF RISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES REASONABLY DESIGNED TO MANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKS OF MARKET ACCESS.
Sanction detail — filed text
THE CONSENT CENSURES MERRILL LYNCH AND REQUIRES MERRILL LYNCH TO PAY A FINE OF $200,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
BATS EDGX EXCHANGE, INC.
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE
3.
Date Initiated (MM/DD/YYYY):
09/26/2016
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
20120344693-04
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
UNSPECIFIED SECURITIES
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
ON SEPTEMBER 26, 2016, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH") ENTERED INTO A LETTER OF ACCEPTANCE,
WAIVER AND CONSENT (THE "CONSENT") WITH BATS EDGX EXCHANGE, INC. ("BATS EDGX"). THE CONSENT FINDS THAT IT VIOLATED RULE 15C3-5
UNDER THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND BATS EDGX RULES 3.1, 3.2, AND 5.1 BY FAILING TO ESTABLISH, DOCUMENT,
AND MAINTAIN A SYSTEM OF RISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES REASONABLY DESIGNED TO MANAGE THE FINANCIAL,
REGULATORY, AND OTHER RISKS OF MARKET ACCESS.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Settled
11. Resolution Date (MM/DD/YYYY):
09/26/2016
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 200,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE CONSENT CENSURES MERRILL LYNCH AND REQUIRES MERRILL LYNCH TO PAY A FINE OF $200,000.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
SOLELY FOR THE PURPOSE OF SETTLING THESE PROCEEDINGS, MERRILL LYNCH ENTERED INTO THE CONSENT WITHOUT ADMITTING OR DENYING THE
FINDINGS REFERRED TO IN THE CONSENT. THE ALLEGATIONS, DISPOSITIONS, FINDINGS AND SANCTIONS OF THE CONSENT ARE DESCRIBED ABOVE IN
ITEMS 7 AND 12.regulatory · block 57PDF pages 451–453
- Regulator name — filed text
- U.S. SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 12,500,000.00
- How was matter resolved — filed text
- Settled
Action status / disposition — filed text
SOLELY FOR THE PURPOSE OF SETTLING THESE PROCEEDINGS, MERRILL LYNCH CONSENTED TO THE ORDER WITHOUT ADMITTING OR DENYING THE FINDINGS IN THE ORDER, EXCEPT AS TO THE SEC'S JURISDICTION OVER IT AND THE SUBJECT MATTER. THE ALLEGATIONS, DISPOSITIONS, FINDINGS AND SANCTIONS OF THE ORDER ARE DESCRIBED ABOVE IN ITEMS 7 AND 12.
Other filed details
Description of allegations — filed text
ON SEPTEMBER 26, 2016, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH") ENTERED INTO A SETTLEMENT WITH THE SECURITIES AND EXCHANGE COMMISSION ("SEC") RESULTING IN THE SEC ISSUING AN ORDER. MERRILL LYNCH CONSENTED TO THE ENTRY OF THE ORDER (THE "ORDER") THAT FINDS THAT IT VIOLATED SECTION 15(C)(3) OF THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND RULE 15C3-5 THEREUNDER (THE "MARKET ACCESS RULE"). THE ORDER FINDS THAT MERRILL LYNCH VIOLATED THE MARKET ACCESS RULE BY FAILING TO ESTABLISH, DOCUMENT, AND MAINTAIN A SYSTEM OF RISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES REASONABLY DESIGNED TO MANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKS OF ITS MARKET ACCESS ACTIVITY. IN PARTICULAR, MERRILL LYNCH FAILED TO ESTABLISH PRE-TRADE RISK MANAGEMENT CONTROLS REASONABLY DESIGNED TO PREVENT THE ENTRY OF ERRONEOUS ORDERS, TO ESTABLISH PRE-TRADE RISK MANAGEMENT CONTROLS REASONABLY DESIGNED TO PREVENT THE ENTRY OF ORDERS THAT WOULD EXCEED PRE-SET CREDIT OR CAPITAL LIMITS FOR SEVERAL OF ITS TRADING DESKS, TO ESTABLISH REQUIRED CONTROLS AND PROCEDURES FOR FIXED INCOME SECURITIES, TO REVIEW ADEQUATELY THE EFFECTIVENESS OF ITS RISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES REQUIRED BY THE MARKET ACCESS RULE, PARTICULARLY FOR PREVENTING THE ENTRY OF ERRONEOUS ORDERS, AND TO COMPLY WITH THE RULE'S CEO CERTIFICATION REQUIREMENTS.
Sanction detail — filed text
THE ORDER CENSURES MERRILL LYNCH AND DIRECTS IT TO CEASE-AND-DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF EXCHANGE ACT SECTION 15(C)(3) AND RULE 15C3-5 THEREUNDER. ADDITIONALLY, THE ORDER REQUIRES MERRILL LYNCH TO PAY A $12,500,000 CIVIL MONEY PENALTY, WHICH WAS PAID ON OCTOBER 3, 2016.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
U.S. SECURITIES AND EXCHANGE COMMISSION
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CEASE AND DESIST; CENSURE
3.
Date Initiated (MM/DD/YYYY):
09/26/2016
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
3-17573
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
UNSPECIFIED SECURITIES
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
ON SEPTEMBER 26, 2016, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH") ENTERED INTO A SETTLEMENT WITH THE
SECURITIES AND EXCHANGE COMMISSION ("SEC") RESULTING IN THE SEC ISSUING AN ORDER. MERRILL LYNCH CONSENTED TO THE ENTRY OF THE
ORDER (THE "ORDER") THAT FINDS THAT IT VIOLATED SECTION 15(C)(3) OF THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND RULE
15C3-5 THEREUNDER (THE "MARKET ACCESS RULE"). THE ORDER FINDS THAT MERRILL LYNCH VIOLATED THE MARKET ACCESS RULE BY FAILING TO
ESTABLISH, DOCUMENT, AND MAINTAIN A SYSTEM OF RISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES REASONABLY DESIGNED TO
MANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKS OF ITS MARKET ACCESS ACTIVITY. IN PARTICULAR, MERRILL LYNCH FAILED TO ESTABLISH
PRE-TRADE RISK MANAGEMENT CONTROLS REASONABLY DESIGNED TO PREVENT THE ENTRY OF ERRONEOUS ORDERS, TO ESTABLISH PRE-TRADE RISK
MANAGEMENT CONTROLS REASONABLY DESIGNED TO PREVENT THE ENTRY OF ORDERS THAT WOULD EXCEED PRE-SET CREDIT OR CAPITAL LIMITS FOR
SEVERAL OF ITS TRADING DESKS, TO ESTABLISH REQUIRED CONTROLS AND PROCEDURES FOR FIXED INCOME SECURITIES, TO REVIEW ADEQUATELY
THE EFFECTIVENESS OF ITS RISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES REQUIRED BY THE MARKET ACCESS RULE, PARTICULARLY
FOR PREVENTING THE ENTRY OF ERRONEOUS ORDERS, AND TO COMPLY WITH THE RULE'S CEO CERTIFICATION REQUIREMENTS.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Settled
11. Resolution Date (MM/DD/YYYY):
09/26/2016
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 12,500,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE ORDER CENSURES MERRILL LYNCH AND DIRECTS IT TO CEASE-AND-DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY
FUTURE VIOLATIONS OF EXCHANGE ACT SECTION 15(C)(3) AND RULE 15C3-5 THEREUNDER. ADDITIONALLY, THE ORDER REQUIRES MERRILL
LYNCH TO PAY A $12,500,000 CIVIL MONEY PENALTY, WHICH WAS PAID ON OCTOBER 3, 2016.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
SOLELY FOR THE PURPOSE OF SETTLING THESE PROCEEDINGS, MERRILL LYNCH CONSENTED TO THE ORDER WITHOUT ADMITTING OR DENYING THE
FINDINGS IN THE ORDER, EXCEPT AS TO THE SEC'S JURISDICTION OVER IT AND THE SUBJECT MATTER. THE ALLEGATIONS, DISPOSITIONS, FINDINGS
AND SANCTIONS OF THE ORDER ARE DESCRIBED ABOVE IN ITEMS 7 AND 12.regulatory · block 58PDF pages 453–455
- Regulator name — filed text
- NASDAQ STOCK MARKET
- Monetary/Fine Amount — filed text
- $ 1,350,000.00
- How was matter resolved — filed text
- Settled
Action status / disposition — filed text
SOLELY FOR THE PURPOSE OF SETTLING THESE PROCEEDINGS, MERRILL LYNCH ENTERED INTO THE CONSENT WITHOUT ADMITTING OR DENYING THE FINDINGS REFERRED TO IN THE CONSENT. THE ALLEGATIONS, DISPOSITIONS, FINDINGS AND SANCTIONS OF THE CONSENT ARE DESCRIBED ABOVE IN ITEMS 7 AND 12.
Other filed details
Description of allegations — filed text
ON SEPTEMBER 26, 2016, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH") ENTERED INTO A LETTER OF ACCEPTANCE, WAIVER AND CONSENT (THE "CONSENT") WITH THE NASDAQ STOCK MARKET LLC ("NASDAQ"). THE CONSENT FINDS THAT MERRILL LYNCH VIOLATED RULE 15C3-5 UNDER THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND NASDAQ RULES 3010, 2010A (FOR CONDUCT ON OR AFTER NOV. 21, 2012) AND 2110 (FOR CONDUCT PRIOR TO NOV. 21, 2012), AND 4611(D) BY FAILING TO ESTABLISH, DOCUMENT, AND MAINTAIN A SYSTEM OF RISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES REASONABLY DESIGNED TO MANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKS OF MARKET ACCESS.
Sanction detail — filed text
THE CONSENT CENSURES MERRILL LYNCH AND REQUIRES MERRILL LYNCH TO PAY A FINE OF $1,350,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
NASDAQ STOCK MARKET
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE
3.
Date Initiated (MM/DD/YYYY):
09/29/2016
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
20120344693-06
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
UNSPECIFIED SECURITIES
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
ON SEPTEMBER 26, 2016, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH") ENTERED INTO A LETTER OF ACCEPTANCE,
WAIVER AND CONSENT (THE "CONSENT") WITH THE NASDAQ STOCK MARKET LLC ("NASDAQ"). THE CONSENT FINDS THAT MERRILL LYNCH VIOLATED
RULE 15C3-5 UNDER THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND NASDAQ RULES 3010, 2010A (FOR CONDUCT ON OR AFTER
NOV. 21, 2012) AND 2110 (FOR CONDUCT PRIOR TO NOV. 21, 2012), AND 4611(D) BY FAILING TO ESTABLISH, DOCUMENT, AND MAINTAIN A SYSTEM OF
RISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES REASONABLY DESIGNED TO MANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKS
OF MARKET ACCESS.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Settled
11. Resolution Date (MM/DD/YYYY):
09/29/2016
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 1,350,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE CONSENT CENSURES MERRILL LYNCH AND REQUIRES MERRILL LYNCH TO PAY A FINE OF $1,350,000.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
SOLELY FOR THE PURPOSE OF SETTLING THESE PROCEEDINGS, MERRILL LYNCH ENTERED INTO THE CONSENT WITHOUT ADMITTING OR DENYING THE
FINDINGS REFERRED TO IN THE CONSENT. THE ALLEGATIONS, DISPOSITIONS, FINDINGS AND SANCTIONS OF THE CONSENT ARE DESCRIBED ABOVE IN
ITEMS 7 AND 12.regulatory · block 59PDF pages 455–457
- Regulator name — filed text
- BATS BYX EXCHANGE, INC.
- Monetary/Fine Amount — filed text
- $ 100,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
SOLELY FOR THE PURPOSE OF SETTLING THESE PROCEEDINGS, MERRILL LYNCH ENTERED INTO THE CONSENT WITHOUT ADMITTING OR DENYING THE FINDINGS REFERRED TO IN THE CONSENT. THE ALLEGATIONS, DISPOSITIONS, FINDINGS AND SANCTIONS OF THE CONSENT ARE DESCRIBED ABOVE IN ITEMS 7 AND 12. PURSUANT TO BATS BYX RULES, THE DECISION IN THIS MATTER IS FINAL 20 BUSINESS DAYS AFTER THE ISSUANCE OF THE CONSENT. THIS AWC BECAME FINAL OCTOBER 25, 2016.
Other filed details
Description of allegations — filed text
ON SEPTEMBER 26, 2016, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH") ENTERED INTO A LETTER OF ACCEPTANCE, WAIVER AND CONSENT (THE "CONSENT") WITH BATS BYX EXCHANGE, INC. ("BATS BYX"). THE CONSENT FINDS THAT MERRILL LYNCH VIOLATED RULE 15C3-5 UNDER THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND BATS BYX RULES 3.1, 3.2, AND 5.1 BY FAILING TO ESTABLISH, DOCUMENT, AND MAINTAIN A SYSTEM OF RISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES REASONABLY DESIGNED TO MANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKS OF MARKET ACCESS.
Sanction detail — filed text
THE CONSENT CENSURES MERRILL LYNCH AND REQUIRES MERRILL LYNCH TO PAY A FINE OF $100,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
BATS BYX EXCHANGE, INC.
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE
3.
Date Initiated (MM/DD/YYYY):
09/29/2016
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
20120344693-03
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
UNSPECIFIED SECURITIES
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
ON SEPTEMBER 26, 2016, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH") ENTERED INTO A LETTER OF ACCEPTANCE,
WAIVER AND CONSENT (THE "CONSENT") WITH BATS BYX EXCHANGE, INC. ("BATS BYX"). THE CONSENT FINDS THAT MERRILL LYNCH VIOLATED RULE
15C3-5 UNDER THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND BATS BYX RULES 3.1, 3.2, AND 5.1 BY FAILING TO ESTABLISH,
DOCUMENT, AND MAINTAIN A SYSTEM OF RISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES REASONABLY DESIGNED TO MANAGE THE
FINANCIAL, REGULATORY, AND OTHER RISKS OF MARKET ACCESS.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
10/25/2016
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 100,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE CONSENT CENSURES MERRILL LYNCH AND REQUIRES MERRILL LYNCH TO PAY A FINE OF $100,000.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
SOLELY FOR THE PURPOSE OF SETTLING THESE PROCEEDINGS, MERRILL LYNCH ENTERED INTO THE CONSENT WITHOUT ADMITTING OR DENYING THE
FINDINGS REFERRED TO IN THE CONSENT. THE ALLEGATIONS, DISPOSITIONS, FINDINGS AND SANCTIONS OF THE CONSENT ARE DESCRIBED ABOVE IN
ITEMS 7 AND 12. PURSUANT TO BATS BYX RULES, THE DECISION IN THIS MATTER IS FINAL 20 BUSINESS DAYS AFTER THE ISSUANCE OF THE CONSENT.
THIS AWC BECAME FINAL OCTOBER 25, 2016.regulatory · block 60PDF pages 457–459
- Regulator name — filed text
- NEW YORK STOCK EXCHANGE
- Monetary/Fine Amount — filed text
- $ 525,000.00
- How was matter resolved — filed text
- Settled
Action status / disposition — filed text
SOLELY FOR THE PURPOSE OF SETTLING THESE PROCEEDINGS, MERRILL LYNCH ENTERED INTO THE CONSENT WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS REFERRED TO IN THE CONSENT. THE ALLEGATIONS, DISPOSITIONS, FINDINGS AND SANCTIONS OF THE CONSENT ARE DESCRIBED ABOVE IN ITEMS 7 AND 12. PURSUANT TO NYSE RULES, THE CONSENT SHALL BE DEEMED FINAL ON OCTOBER 7, 2016, UNLESS REVIEW BY THE NYSE EXCHANGE BOARD OF DIRECTORS IS REQUESTED.
Other filed details
Description of allegations — filed text
ON SEPTEMBER 26, 2016, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH") ENTERED INTO A LETTER OF ACCEPTANCE, WAIVER AND CONSENT (THE "CONSENT") WITH THE NEW YORK STOCK EXCHANGE LLC ("NYSE"). THE CONSENT FINDS THAT MERRILL LYNCH VIOLATED RULE 15C3-5 UNDER THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND NYSE RULES 342 AND 2010 BY FAILING TO ESTABLISH, DOCUMENT, AND MAINTAIN A SYSTEM OF RISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES REASONABLY DESIGNED TO MANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKS OF MARKET ACCESS.
Sanction detail — filed text
THE CONSENT CENSURES MERRILL LYNCH AND REQUIRES MERRILL LYNCH TO PAY A FINE OF $525,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
NEW YORK STOCK EXCHANGE
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE
3.
Date Initiated (MM/DD/YYYY):
09/26/2016
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
20120344693-05
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
UNSPECIFIED SECURITIES
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
ON SEPTEMBER 26, 2016, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH") ENTERED INTO A LETTER OF ACCEPTANCE,
WAIVER AND CONSENT (THE "CONSENT") WITH THE NEW YORK STOCK EXCHANGE LLC ("NYSE"). THE CONSENT FINDS THAT MERRILL LYNCH VIOLATED
RULE 15C3-5 UNDER THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND NYSE RULES 342 AND 2010 BY FAILING TO ESTABLISH,
DOCUMENT, AND MAINTAIN A SYSTEM OF RISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES REASONABLY DESIGNED TO MANAGE THE
FINANCIAL, REGULATORY, AND OTHER RISKS OF MARKET ACCESS.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Settled
11. Resolution Date (MM/DD/YYYY):
09/26/2016
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 525,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE CONSENT CENSURES MERRILL LYNCH AND REQUIRES MERRILL LYNCH TO PAY A FINE OF $525,000.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
SOLELY FOR THE PURPOSE OF SETTLING THESE PROCEEDINGS, MERRILL LYNCH ENTERED INTO THE CONSENT WITHOUT ADMITTING OR DENYING ANY
ALLEGATIONS OR FINDINGS REFERRED TO IN THE CONSENT. THE ALLEGATIONS, DISPOSITIONS, FINDINGS AND SANCTIONS OF THE CONSENT ARE
DESCRIBED ABOVE IN ITEMS 7 AND 12. PURSUANT TO NYSE RULES, THE CONSENT SHALL BE DEEMED FINAL ON OCTOBER 7, 2016, UNLESS REVIEW BY
THE NYSE EXCHANGE BOARD OF DIRECTORS IS REQUESTED.regulatory · block 61PDF pages 459–461
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 2,800,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED, FINED $2,800,000, AND UNDERTAKES TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT SUBMITTED TO THE FINRA/NASDAQ TRADE REPORTING FACILITY (TRF) MILLIONS OF INACCURATE TRADES IN WHICH PURCHASES WERE REPORTED AS PRINCIPAL SALES AND AGENCY CROSSES. THE FIRM ALSO SUBMITTED MILLIONS OF TRADES IT WAS NOT REQUIRED TO SUBMIT. THE FINDINGS STATED THAT THE FIRM ALSO SUBMITTED MILLIONS OF INACCURATE OR INCOMPLETE REPORTABLE ORDER EVENTS (ROES) TO THE ORDER AUDIT TRAIL SYSTEM (OATS) INCLUDING THE SUBMISSION OF NEW ORDERS WITH INACCURATELY PLACED CANCEL STAMPS, NEW ORDER REPORTS FOR MODIFICATIONS OF EXISTING ORDERS, BROKER-DEALER ORDERS REPORTED AS CUSTOMER ORDERS, INACCURATE GOOD TILL TIME (GTT) TIME IN FORCE DESIGNATIONS, AND INTERMARKET SWEEPS ORDERS (ISOS) WITHOUT THE REQUIRED ISO SPECIAL HANDLING CODE. THE FIRM ALSO FAILED TO REPORT MILLIONS OF EXECUTION REPORTS TO OATS. THE FINDINGS ALSO INCLUDED THAT THE FIRM FAILED TO CAPTURE THE MINIMUM QUANTITY (MQT) SPECIAL HANDLING INSTRUCTIONS ON MILLIONS OF ORDER TICKETS WHICH ARE USED FOR TRANSACTIONS THAT SHOULD BE CANCELED IF A SPECIFIED MINIMUM QUANTITY CANNOT BE EXECUTED. THE FIRM ALSO RECORDED INCORRECT RECEIPT AND ROUTE TIMESTAMPS ON MILLIONS OF ORDER TICKETS. IN ADDITION, FINRA FOUND THAT THE FIRM INCLUDED INCORRECT INFORMATION AS TO CANCELLED SHARES IN ITS RULE 605 REPORT. FINRA FOUND THAT THE FIRM'S WRITTEN SUPERVISORY PROCEDURES (WSPS) WERE NOT REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH FINRA'S TRADE AND OATS REPORTING RULES, CUSTOMER CONFIRMATION RULES, AND THE BOOKS AND RECORDS REQUIREMENTS IN SEC RULE 17A-3. THE FIRM'S WSPS REQUIRED SUPERVISION OF A NUMBER OF MODIFIERS BUT FAILED TO CALL FOR A SUPERVISORY REVIEW OF THE .RX MODIFIER WHICH CONCERN TRANSACTIONS REPORTED FOR REGULATORY TRANSACTION FEES. THE FIRM'S OATS REPORTING WSPS REQUIRED THE REVIEW OF A SMALL NUMBER OF OATS REPORTS ON A MONTHLY BASIS TO ENSURE THE ACCURACY OF SUCH REPORTS. GIVEN THE VOLUME OF THE FIRM'S OATS REPORTING OBLIGATIONS, THE SCOPE OF THE FIRM'S WSPS WAS NOT REASONABLY DESIGNED TO CAPTURE AND IDENTIFY ANY REPORTING PROBLEMS. THE FIRM'S BOOKS AND RECORDS, CUSTOMER CONFIRMATIONS AND OATS WSPS REQUIRED THE REVIEW OF A SMALL NUMBER OF BOOKS AND RECORDS AND CUSTOMER CONFIRMATIONS ON A MONTHLY BASIS TO ENSURE THE ACCURACY OF SUCH RECORDS. GIVEN THE VOLUME OF THE FIRM'S BOOKS AND RECORDS, CUSTOMER CONFIRMATIONS AND OATS REPORTING OBLIGATIONS, THE SCOPE OF THE FIRM'S WSPS WAS NOT REASONABLY DESIGNED TO CAPTURE AND IDENTIFY THE ACCURACY OF SUCH RECORDS.
Sanction detail — filed text
THE FIRM WAS CENSURED, FINED $2,800,000, AND UNDERTAKES TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE;UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 10/17/2016 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2013035822901 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: UNSPECIFIED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT SUBMITTED TO THE FINRA/NASDAQ TRADE REPORTING FACILITY (TRF) MILLIONS OF INACCURATE TRADES IN WHICH PURCHASES WERE REPORTED AS PRINCIPAL SALES AND AGENCY CROSSES. THE FIRM ALSO SUBMITTED MILLIONS OF TRADES IT WAS NOT REQUIRED TO SUBMIT. THE FINDINGS STATED THAT THE FIRM ALSO SUBMITTED MILLIONS OF INACCURATE OR INCOMPLETE REPORTABLE ORDER EVENTS (ROES) TO THE ORDER AUDIT TRAIL SYSTEM (OATS) INCLUDING THE SUBMISSION OF NEW ORDERS WITH INACCURATELY PLACED CANCEL STAMPS, NEW ORDER REPORTS FOR MODIFICATIONS OF EXISTING ORDERS, BROKER-DEALER ORDERS REPORTED AS CUSTOMER ORDERS, INACCURATE GOOD TILL TIME (GTT) TIME IN FORCE DESIGNATIONS, AND INTERMARKET SWEEPS ORDERS (ISOS) WITHOUT THE REQUIRED ISO SPECIAL HANDLING CODE. THE FIRM ALSO FAILED TO REPORT MILLIONS OF EXECUTION REPORTS TO OATS. THE FINDINGS ALSO INCLUDED THAT THE FIRM FAILED TO CAPTURE THE MINIMUM QUANTITY (MQT) SPECIAL HANDLING INSTRUCTIONS ON MILLIONS OF ORDER TICKETS WHICH ARE USED FOR TRANSACTIONS THAT SHOULD BE CANCELED IF A SPECIFIED MINIMUM QUANTITY CANNOT BE EXECUTED. THE FIRM ALSO RECORDED INCORRECT RECEIPT AND ROUTE TIMESTAMPS ON MILLIONS OF ORDER TICKETS. IN ADDITION, FINRA FOUND THAT THE FIRM INCLUDED INCORRECT INFORMATION AS TO CANCELLED SHARES IN ITS RULE 605 REPORT. FINRA FOUND THAT THE FIRM'S WRITTEN SUPERVISORY PROCEDURES (WSPS) WERE NOT REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH FINRA'S TRADE AND OATS REPORTING RULES, CUSTOMER CONFIRMATION RULES, AND THE BOOKS AND RECORDS REQUIREMENTS IN SEC RULE 17A-3. THE FIRM'S WSPS REQUIRED SUPERVISION OF A NUMBER OF MODIFIERS BUT FAILED TO CALL FOR A SUPERVISORY REVIEW OF THE .RX MODIFIER WHICH CONCERN TRANSACTIONS REPORTED FOR REGULATORY TRANSACTION FEES. THE FIRM'S OATS REPORTING WSPS REQUIRED THE REVIEW OF A SMALL NUMBER OF OATS REPORTS ON A MONTHLY BASIS TO ENSURE THE ACCURACY OF SUCH REPORTS. GIVEN THE VOLUME OF THE FIRM'S OATS REPORTING OBLIGATIONS, THE SCOPE OF THE FIRM'S WSPS WAS NOT REASONABLY DESIGNED TO CAPTURE AND IDENTIFY ANY REPORTING PROBLEMS. THE FIRM'S BOOKS AND RECORDS, CUSTOMER CONFIRMATIONS AND OATS WSPS REQUIRED THE REVIEW OF A SMALL NUMBER OF BOOKS AND RECORDS AND CUSTOMER CONFIRMATIONS ON A MONTHLY BASIS TO ENSURE THE ACCURACY OF SUCH RECORDS. GIVEN THE VOLUME OF THE FIRM'S BOOKS AND RECORDS, CUSTOMER CONFIRMATIONS AND OATS REPORTING OBLIGATIONS, THE SCOPE OF THE FIRM'S WSPS WAS NOT REASONABLY DESIGNED TO CAPTURE AND IDENTIFY THE ACCURACY OF SUCH RECORDS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 10/17/2016 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 2,800,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED, FINED $2,800,000, AND UNDERTAKES TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED, FINED $2,800,000, AND UNDERTAKES TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES.
regulatory · block 62PDF pages 461–463
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 52,500.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED, FINED $52,500, ORDERED TO PAY RESTITUTION IN THE AMOUNT OF $582.72 PLUS INTEREST, AND UNDERTAKES TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT, IN 86 INSTANCES DURING THE JULY 1, 2012 THROUGH SEPTEMBER 30, 2014 REVIEW PERIOD, IT ACCEPTED AND HELD AN ORDER IN AN OTC EQUITY SECURITY (LIMITED TO UNLISTED, PINK SHEET SECURITIES) FROM ITS OWN CUSTOMER, OR A CUSTOMER OR ANOTHER BROKER-DEALER, AND TRADED THAT SECURITY ON THE SAME SIDE OF THE MARKET FOR ITS OWN ACCOUNT AT A PRICE THAT WOULD HAVE SATISFIED THE CUSTOMER ORDER WITHOUT IMMEDIATELY THEREAFTER EXECUTING THE CUSTOMER ORDER UP TO THE SIZE AND AT THE SAME OR BETTER PRICE AT WHICH IT TRADED FOR ITS OWN ACCOUNT. THE FINDINGS STATED THAT, IN 38 OF THE ABOVE 86 INSTANCES, THE FIRM ALSO FAILED TO MAKE EVERY EFFORT TO CROSS A MARKETABLE CUSTOMER ORDER WITH ANOTHER ORDER RECEIVED BY THE FIRM ON THE OPPOSITE SIDE OF THE MARKET. FUTHERMORE, ON 13 OCCASIONS INVOLVING EITHER A TRADING AHEAD AND/OR CROSSING FAILURE, THE FIRM FAILED TO EXECUTE A MARKETABLE CUSTOMER ORDER FULLY AND PROMPTLY. THE FINDINGS ALSO STATED THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TO TRADING AHEAD OF CUSTOMER ORDERS. SPECIFICALLY, THE FIRM, WHEN PERFORMING ITS TRADING AHEAD REVIEWS IN OTC SECURITIES, FAILED TO IDENTIFY PRICE EXCEPTIONS OF MARKET HELD ORDERS, AND ENSURE THAT CUSTOMER ORDERS WERE EXECUTED WITHIN 60 SECONDS OF THE FIRM'S PROPRIETARY TRADE AND UP TO THE LESSER OF THE PROPRIETARY OR CUSTOMER ORDER SHARE QUANTITY. THE FINDINGS ALSO INCLUDED THAT THE FIRM'S TRADING SUPERVISION CHECKLIST DID NOT EVIDENCE A SUPERVISORY REVIEW RELATED TO TRADING AHEAD OF CUSTOMER ORDERS, AND IT ALSO FAILED TO PROVIDE TO THE STAFF EVIDENCE OF A SUPERVISORY REVIEW RELATED TO TRADING AHEAD OF CUSTOMER ORDERS.
Sanction detail — filed text
THE FIRM WAS CENSURED, FINED $52,500, ORDERED TO PAY RESTITUTION IN THE AMOUNT OF $582.72 PLUS INTEREST, AND UNDERTAKES TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE;RESTITUTION;UNDERTAKING;OTHER;INTEREST 3. Date Initiated (MM/DD/YYYY): 10/31/2016 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2013036708101 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Equity - OTC Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT, IN 86 INSTANCES DURING THE JULY 1, 2012 THROUGH SEPTEMBER 30, 2014 REVIEW PERIOD, IT ACCEPTED AND HELD AN ORDER IN AN OTC EQUITY SECURITY (LIMITED TO UNLISTED, PINK SHEET SECURITIES) FROM ITS OWN CUSTOMER, OR A CUSTOMER OR ANOTHER BROKER-DEALER, AND TRADED THAT SECURITY ON THE SAME SIDE OF THE MARKET FOR ITS OWN ACCOUNT AT A PRICE THAT WOULD HAVE SATISFIED THE CUSTOMER ORDER WITHOUT IMMEDIATELY THEREAFTER EXECUTING THE CUSTOMER ORDER UP TO THE SIZE AND AT THE SAME OR BETTER PRICE AT WHICH IT TRADED FOR ITS OWN ACCOUNT. THE FINDINGS STATED THAT, IN 38 OF THE ABOVE 86 INSTANCES, THE FIRM ALSO FAILED TO MAKE EVERY EFFORT TO CROSS A MARKETABLE CUSTOMER ORDER WITH ANOTHER ORDER RECEIVED BY THE FIRM ON THE OPPOSITE SIDE OF THE MARKET. FUTHERMORE, ON 13 OCCASIONS INVOLVING EITHER A TRADING AHEAD AND/OR CROSSING FAILURE, THE FIRM FAILED TO EXECUTE A MARKETABLE CUSTOMER ORDER FULLY AND PROMPTLY. THE FINDINGS ALSO STATED THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TO TRADING AHEAD OF CUSTOMER ORDERS. SPECIFICALLY, THE FIRM, WHEN PERFORMING ITS TRADING AHEAD REVIEWS IN OTC SECURITIES, FAILED TO IDENTIFY PRICE EXCEPTIONS OF MARKET HELD ORDERS, AND ENSURE THAT CUSTOMER ORDERS WERE EXECUTED WITHIN 60 SECONDS OF THE FIRM'S PROPRIETARY TRADE AND UP TO THE LESSER OF THE PROPRIETARY OR CUSTOMER ORDER SHARE QUANTITY. THE FINDINGS ALSO INCLUDED THAT THE FIRM'S TRADING SUPERVISION CHECKLIST DID NOT EVIDENCE A SUPERVISORY REVIEW RELATED TO TRADING AHEAD OF CUSTOMER ORDERS, AND IT ALSO FAILED TO PROVIDE TO THE STAFF EVIDENCE OF A SUPERVISORY REVIEW RELATED TO TRADING AHEAD OF CUSTOMER ORDERS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 10/31/2016 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 52,500.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED, FINED $52,500, ORDERED TO PAY RESTITUTION IN THE AMOUNT OF $582.72 PLUS INTEREST, AND UNDERTAKES TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED, FINED $52,500, ORDERED TO PAY RESTITUTION IN THE AMOUNT OF $582.72 PLUS INTEREST, AND UNDERTAKES TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES.
regulatory · block 63PDF pages 463–465
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 6,250,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
IN DETERMINING THE APPROPRIATE SANCTION, FINRA CONSIDERED THE FOLLOWING FACTORS: PRIOR TO DETECTION BY A REGULATOR, THE FIRM CONDUCTED A COMPREHENSIVE INTERNAL REVIEW OF THE USE OF NON-PURPOSE LMA PROCEEDS TO PURCHASE MARGIN STOCK AND TOOK REMEDIAL MEASURES TO STRENGTHEN ITS RELATED CONTROLS AND PROCEDURES; THE FIRM REPORTED TO FINRA CERTAIN OF THE VIOLATIONS ADDRESSED IN THE AWC; AND THE FIRM PROVIDED SUBSTANTIAL ASSISTANCE DURING FINRA'S INVESTIGATION BY SHARING THE RESULTS OF ITS INTERNAL INVESTIGATION WITH FINRA.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT DID NOT ESTABLISH AND MAINTAIN ADEQUATE SUPERVISORY SYSTEMS, AND DID NOT ESTABLISH, MAINTAIN, AND ENFORCE ADEQUATE WRITTEN PROCEDURES, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONS GOVERNING THE USE OF PROCEEDS FROM LOANS ORIGINATED UNDER A SECURITIES-BASED LENDING PROGRAM CALLED LOAN MANAGEMENT ACCOUNTS (LMAS). THE FINDINGS STATED THAT THE FIRM DID NOT ADEQUATELY EDUCATE ITS REPRESENTATIVES ABOUT LMAS OR TRAIN THEM ON THE DIFFERENCES BETWEEN PURPOSE AND NONPURPOSE LMAS, THE CONTRACTUAL AND FIRM PROHIBITION AGAINST USING PROCEEDS FROM NON-PURPOSE LMAS TO BUY MARGIN STOCK, OR THE REGULATORY REQUIREMENTS APPLICABLE TO LMAS USED TO BUY MARGIN STOCK. THE FIRM ALSO DID NOT REASONABLY SUPERVISE THE LMA ACCOUNT-OPENING PROCESS. THE FINDINGS ALSO STATED THE FIRM DID NOT ESTABLISH AND MAINTAIN REASONABLE SUPERVISORY SYSTEMS, OR ESTABLISH, MAINTAIN, AND ENFORCE ADEQUATE WRITTEN PROCEDURES, DESIGNED TO PREVENT, DETER, AND DETECT THE USE OF PROCEEDS FROM NON-PURPOSE LMAS TO PURCHASE MARGIN STOCK. EXCEPT IN LIMITED SITUATIONS WHERE A CUSTOMER HAD AN OPEN MARGIN DEBIT BALANCE OR A PENDING TRADE, THERE WAS NO EFFECTIVE CONTROL IN PLACE TO PREVENT CUSTOMERS FROM TRANSFERRING PROCEEDS FROM A NON-PURPOSE LMA TO THEIR FIRM BROKERAGE ACCOUNT AND IMMEDIATELY PURCHASING MARGIN STOCK, NOR ANY EFFECTIVE POST-TRANSACTION REVIEW TO DETECT SUCH PROHIBITED USE OF THE LMA PROCEEDS. THIS FAILURE TO SUPERVISE EXTENDED TO THE FIRM'S POLICIES AND PROCEDURES, WHICH PROHIBITED THE USE OF PROCEEDS FROM NON-PURPOSE LMAS TO PURCHASE SECURITIES GENERALLY, AND TO THE LMA AGREEMENTS, WHICH PROHIBITED THE USE OF PROCEEDS FROM NON-PURPOSE LMAS TO PURCHASE MARGIN STOCK. LIKEWISE, BECAUSE THE FIRM DID NOT HAVE ADEQUATE SYSTEMS TO MONITOR WHETHER PROCEEDS FROM NON-PURPOSE LMAS WERE USED TO PURCHASE MARGIN STOCK, THE FIRM FAILED TO ADEQUATELY MONITOR TO ENSURE THE COLLATERAL REQUIREMENT WAS MET IN THOSE INSTANCES WHEN LMA PROCEEDS WERE, IN FACT, USED TO PURCHASE MARGIN STOCK. AS A RESULT OF THESE FAILURES, DURING THE LMA REVIEW PERIOD, THE FIRM CUSTOMERS DREW DOWN ON NON- PURPOSE LMAS, TRANSFERRED THE FUNDS TO THEIR FIRM BROKERAGE ACCOUNTS, AND WITHIN A SHORT TIMEFRAME (OFTEN THE SAME DAY) ON THOUSANDS OF OCCASIONS PURCHASED MARGIN STOCK. THE FINDINGS ALSO INCLUDED THAT THE FIRM FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, AND FAILED TO ESTABLISH, MAINTAIN, AND ENFORCE WRITTEN PROCEDURES, REASONABLY DESIGNED TO ENSURE THE SUITABILITY OF TRANSACTIONS IN PUERTO RICO MUNICIPAL BONDS AND PUERTO RICO CLOSED-END FUNDS (PR SECURITIES) IN CERTAIN CIRCUMSTANCES. MANY PUERTO RICO CUSTOMERS WERE CONCENTRATED IN PR SECURITIES, AND MANY USED LEVERAGE TO BUY ADDITIONAL PR SECURITIES EITHER THROUGH LMAS OR THROUGH THE USE OF MARGIN IN THEIR SECURITIES ACCOUNTS. LEVERAGED CUSTOMERS WERE REQUIRED TO MAINTAIN ACCOUNT EQUITY IN ORDER TO PROVIDE ADEQUATE COLLATERAL TO SUPPORT THEIR LEVERAGE. DESPITE THE RISK OF CUSTOMERS WHO WERE BOTH LEVERAGED AND HIGHLY CONCENTRATED IN PR SECURITIES, THE FIRM DID NOT ESTABLISH AND MAINTAIN ADEQUATE SUPERVISORY SYSTEMS AND PROCEDURES TO ENSURE THAT, WHERE CUSTOMERS WERE BOTH HIGHLY CONCENTRATED IN PR SECURITIES AND USING LEVERAGE, TRANSACTIONS WERE SUITABLE IN LIGHT OF THE CUSTOMERS' RISK OBJECTIVES AND PROFILES. FINRA FOUND THAT SEVERAL HUNDRED CUSTOMER ACCOUNTS IN THE FIRM'S PUERTO RICO BRANCH WITH MODEST NET WORTH AND CONSERVATIVE OR MODERATE INVESTMENT OBJECTIVES HAD 75 PERCENT OR MORE OF THEIR ACCOUNT ASSETS INVESTED IN PR SECURITIES. OF THOSE ACCOUNTS, APPROXIMATELY 50 ALSO WERE LEVERAGED THROUGH LMAS OR MARGIN. APPROXIMATELY HALF OF THOSE ACCOUNTS EVENTUALLY RECEIVED MARGIN OR MAINTENANCE CALLS UPON WHICH THEY LIQUIDATED PR SECURITIES AT A LOSS. THESE CUSTOMERS - 25 IN TOTAL - SUFFERED AGGREGATE LOSSES OF NEARLY $1.2 MILLION AS A RESULT OF LIQUIDATING PR SECURITIES TO MEET THE CALLS.
Sanction detail — filed text
THE FIRM WAS CENSURED, FINED $6,250,000, AND REQUIRED TO PAY $779,999, INCLUDING PREJUDGMENT INTEREST, IN RESTITUTION TO 22 CUSTOMERS. THE AMOUNT OF RESTITUTION ORDERED TAKES INTO ACCOUNT THAT THE FIRM HAS ALREADY REIMBURSED CERTAIN AFFECTED CUSTOMERS PURSUANT TO PRIVATE SETTLEMENT AGREEMENTS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; RESTITUTION; PREJUDGMENT INTEREST 3. Date Initiated (MM/DD/YYYY): 11/30/2016 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2014042578001 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Debt - Municipal Other Product Types: CLOSED END FUNDS AND UNSPECIFIED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT DID NOT ESTABLISH AND MAINTAIN ADEQUATE SUPERVISORY SYSTEMS, AND DID NOT ESTABLISH, MAINTAIN, AND ENFORCE ADEQUATE WRITTEN PROCEDURES, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONS GOVERNING THE USE OF PROCEEDS FROM LOANS ORIGINATED UNDER A SECURITIES-BASED LENDING PROGRAM CALLED LOAN MANAGEMENT ACCOUNTS (LMAS). THE FINDINGS STATED THAT THE FIRM DID NOT ADEQUATELY EDUCATE ITS REPRESENTATIVES ABOUT LMAS OR TRAIN THEM ON THE DIFFERENCES BETWEEN PURPOSE AND NONPURPOSE LMAS, THE CONTRACTUAL AND FIRM PROHIBITION AGAINST USING PROCEEDS FROM NON-PURPOSE LMAS TO BUY MARGIN STOCK, OR THE REGULATORY REQUIREMENTS APPLICABLE TO LMAS USED TO BUY MARGIN STOCK. THE FIRM ALSO DID NOT REASONABLY SUPERVISE THE LMA ACCOUNT-OPENING PROCESS. THE FINDINGS ALSO STATED THE FIRM DID NOT ESTABLISH AND MAINTAIN REASONABLE SUPERVISORY SYSTEMS, OR ESTABLISH, MAINTAIN, AND ENFORCE ADEQUATE WRITTEN PROCEDURES, DESIGNED TO PREVENT, DETER, AND DETECT THE USE OF PROCEEDS FROM NON-PURPOSE LMAS TO PURCHASE MARGIN STOCK. EXCEPT IN LIMITED SITUATIONS WHERE A CUSTOMER HAD AN OPEN MARGIN DEBIT BALANCE OR A PENDING TRADE, THERE WAS NO EFFECTIVE CONTROL IN PLACE TO PREVENT CUSTOMERS FROM TRANSFERRING PROCEEDS FROM A NON-PURPOSE LMA TO THEIR FIRM BROKERAGE ACCOUNT AND IMMEDIATELY PURCHASING MARGIN STOCK, NOR ANY EFFECTIVE POST-TRANSACTION REVIEW TO DETECT SUCH PROHIBITED USE OF THE LMA PROCEEDS. THIS FAILURE TO SUPERVISE EXTENDED TO THE FIRM'S POLICIES AND PROCEDURES, WHICH PROHIBITED THE USE OF PROCEEDS FROM NON-PURPOSE LMAS TO PURCHASE SECURITIES GENERALLY, AND TO THE LMA AGREEMENTS, WHICH PROHIBITED THE USE OF PROCEEDS FROM NON-PURPOSE LMAS TO PURCHASE MARGIN STOCK. LIKEWISE, BECAUSE THE FIRM DID NOT HAVE ADEQUATE SYSTEMS TO MONITOR WHETHER PROCEEDS FROM NON-PURPOSE LMAS WERE USED TO PURCHASE MARGIN STOCK, THE FIRM FAILED TO ADEQUATELY MONITOR TO ENSURE THE COLLATERAL REQUIREMENT WAS MET IN THOSE INSTANCES WHEN LMA PROCEEDS WERE, IN FACT, USED TO PURCHASE MARGIN STOCK. AS A RESULT OF THESE FAILURES, DURING THE LMA REVIEW PERIOD, THE FIRM CUSTOMERS DREW DOWN ON NON- PURPOSE LMAS, TRANSFERRED THE FUNDS TO THEIR FIRM BROKERAGE ACCOUNTS, AND WITHIN A SHORT TIMEFRAME (OFTEN THE SAME DAY) ON THOUSANDS OF OCCASIONS PURCHASED MARGIN STOCK. THE FINDINGS ALSO INCLUDED THAT THE FIRM FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, AND FAILED TO ESTABLISH, MAINTAIN, AND ENFORCE WRITTEN PROCEDURES, REASONABLY DESIGNED TO ENSURE THE SUITABILITY OF TRANSACTIONS IN PUERTO RICO MUNICIPAL BONDS AND PUERTO RICO CLOSED-END FUNDS (PR SECURITIES) IN CERTAIN CIRCUMSTANCES. MANY PUERTO RICO CUSTOMERS WERE CONCENTRATED IN PR SECURITIES, AND MANY USED LEVERAGE TO BUY ADDITIONAL PR SECURITIES EITHER THROUGH LMAS OR THROUGH THE USE OF MARGIN IN THEIR SECURITIES ACCOUNTS. LEVERAGED CUSTOMERS WERE REQUIRED TO MAINTAIN ACCOUNT EQUITY IN ORDER TO PROVIDE ADEQUATE COLLATERAL TO SUPPORT THEIR LEVERAGE. DESPITE THE RISK OF CUSTOMERS WHO WERE BOTH LEVERAGED AND HIGHLY CONCENTRATED IN PR SECURITIES, THE FIRM DID NOT ESTABLISH AND MAINTAIN ADEQUATE SUPERVISORY SYSTEMS AND PROCEDURES TO ENSURE THAT, WHERE CUSTOMERS WERE BOTH HIGHLY CONCENTRATED IN PR SECURITIES AND USING LEVERAGE, TRANSACTIONS WERE SUITABLE IN LIGHT OF THE CUSTOMERS' RISK OBJECTIVES AND PROFILES. FINRA FOUND THAT SEVERAL HUNDRED CUSTOMER ACCOUNTS IN THE FIRM'S PUERTO RICO BRANCH WITH MODEST NET WORTH AND CONSERVATIVE OR MODERATE INVESTMENT OBJECTIVES HAD 75 PERCENT OR MORE OF THEIR ACCOUNT ASSETS INVESTED IN PR SECURITIES. OF THOSE ACCOUNTS, APPROXIMATELY 50 ALSO WERE LEVERAGED THROUGH LMAS OR MARGIN. APPROXIMATELY HALF OF THOSE ACCOUNTS EVENTUALLY RECEIVED MARGIN OR MAINTENANCE CALLS UPON WHICH THEY LIQUIDATED PR SECURITIES AT A LOSS. THESE CUSTOMERS - 25 IN TOTAL - SUFFERED AGGREGATE LOSSES OF NEARLY $1.2 MILLION AS A RESULT OF LIQUIDATING PR SECURITIES TO MEET THE CALLS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 11/30/2016 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 6,250,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: PREJUDGMENT INTEREST Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED, FINED $6,250,000, AND REQUIRED TO PAY $779,999, INCLUDING PREJUDGMENT INTEREST, IN RESTITUTION TO 22 CUSTOMERS. THE AMOUNT OF RESTITUTION ORDERED TAKES INTO ACCOUNT THAT THE FIRM HAS ALREADY REIMBURSED CERTAIN AFFECTED CUSTOMERS PURSUANT TO PRIVATE SETTLEMENT AGREEMENTS. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). IN DETERMINING THE APPROPRIATE SANCTION, FINRA CONSIDERED THE FOLLOWING FACTORS: PRIOR TO DETECTION BY A REGULATOR, THE FIRM CONDUCTED A COMPREHENSIVE INTERNAL REVIEW OF THE USE OF NON-PURPOSE LMA PROCEEDS TO PURCHASE MARGIN STOCK AND TOOK REMEDIAL MEASURES TO STRENGTHEN ITS RELATED CONTROLS AND PROCEDURES; THE FIRM REPORTED TO FINRA CERTAIN OF THE VIOLATIONS ADDRESSED IN THE AWC; AND THE FIRM PROVIDED SUBSTANTIAL ASSISTANCE DURING FINRA'S INVESTIGATION BY SHARING THE RESULTS OF ITS INTERNAL INVESTIGATION WITH FINRA.
regulatory · block 64PDF pages 465–467
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 30,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED AND FINED $30,000.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT EXCEEDED THE RELEVANT POSITION LIMIT IN TWO DIFFERENT SECURITIES FOR TWO DIFFERENT CUSTOMERS (EXCEEDING THE RELEVANT POSITION LIMIT IN A RANGE OF BETWEEN 102.5% AND 538.5%) FOR FIVE DAYS, RESPECTIVELY. THE FINDINGS STATED THAT THE FIRM FAILED TO MAINTAIN AN ADEQUATE SYSTEM OF SUPERVISION, INCLUDING SYSTEMS OF FOLLOW-UP AND REVIEW, WHICH WERE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE RULES GOVERNING THE REPORTING OF OPTIONS POSITION LIMITS TO THE LARGE OPTIONS POSITION REPORTS (LOPR) SYSTEM.
Sanction detail — filed text
THE FIRM WAS CENSURED AND FINED $30,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 12/15/2016 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2015043999801 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Options Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT EXCEEDED THE RELEVANT POSITION LIMIT IN TWO DIFFERENT SECURITIES FOR TWO DIFFERENT CUSTOMERS (EXCEEDING THE RELEVANT POSITION LIMIT IN A RANGE OF BETWEEN 102.5% AND 538.5%) FOR FIVE DAYS, RESPECTIVELY. THE FINDINGS STATED THAT THE FIRM FAILED TO MAINTAIN AN ADEQUATE SYSTEM OF SUPERVISION, INCLUDING SYSTEMS OF FOLLOW-UP AND REVIEW, WHICH WERE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE RULES GOVERNING THE REPORTING OF OPTIONS POSITION LIMITS TO THE LARGE OPTIONS POSITION REPORTS (LOPR) SYSTEM. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 12/15/2016 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 30,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED AND FINED $30,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED AND FINED $30,000.
regulatory · block 65PDF pages 467–468
- Regulator name — filed text
- CHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED
- Monetary/Fine Amount — filed text
- $ 7,500.00
- How was matter resolved — filed text
- Decision & Order of Offer of Settlement
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE VIOLATIONS ALLEGED IN THE STATEMENT OF CHARGES AND LETTER OF CONSENT, MERRILL LYNCH AGREED TO A $7,500 FINE AND A CENSURE.
Other filed details
Description of allegations — filed text
THE BUSINESS CONDUCT COMMITTEE OF THE CHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED ("CBOE") ALLEGED THAT, FROM IN OR ABOUT JANUARY 1, 2009 THROUGH ON OR ABOUT JUNE 15, 2015, MERRILL LYNCH, (1) ON NUMEROUS OCCASIONS, FAILED TO GRANT PRIORITY TO THE HIGHEST BID AND/OR LOWEST OFFER WHEN SUCH BID OR OFFER WAS AVAILABLE AND, ON NUMEROUS OCCASIONS, FAILED TO USE DUE DILIGENCE TO EXECUTE ORDERS AT THE BEST PRICES AVAILABLE IN VIOLATION OF CBOE RULES 6.45A, 6.45B AND 6.73, AND (2) FAILED TO SUPERVISE ITS ASSOCIATED PERSONS TO ASSURE COMPLIANCE WITH CBOE RULES 6.45A, 6.45B, AND 6.73 IN CONNECTION WITH THE ABOVE MENTIONED CONDUCT IN VIOLATION OF CBOE RULE 4.2.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE VIOLATIONS ALLEGED IN THE STATEMENT OF CHARGES AND LETTER OF CONSENT, MERRILL LYNCH AGREED TO A $7,500 FINE AND A CENSURE. THE FINE WAS PAID ON JANUARY 13, 2017.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
CHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE
3.
Date Initiated (MM/DD/YYYY):
12/29/2016
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
FILE NO. 15-0020 / 20150442656 AND 20150466721
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Options
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE BUSINESS CONDUCT COMMITTEE OF THE CHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED ("CBOE") ALLEGED THAT, FROM IN OR ABOUT
JANUARY 1, 2009 THROUGH ON OR ABOUT JUNE 15, 2015, MERRILL LYNCH, (1) ON NUMEROUS OCCASIONS, FAILED TO GRANT PRIORITY TO THE
HIGHEST BID AND/OR LOWEST OFFER WHEN SUCH BID OR OFFER WAS AVAILABLE AND, ON NUMEROUS OCCASIONS, FAILED TO USE DUE DILIGENCE
TO EXECUTE ORDERS AT THE BEST PRICES AVAILABLE IN VIOLATION OF CBOE RULES 6.45A, 6.45B AND 6.73, AND (2) FAILED TO SUPERVISE ITS
ASSOCIATED PERSONS TO ASSURE COMPLIANCE WITH CBOE RULES 6.45A, 6.45B, AND 6.73 IN CONNECTION WITH THE ABOVE MENTIONED CONDUCT
IN VIOLATION OF CBOE RULE 4.2.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Decision & Order of Offer of Settlement
11. Resolution Date (MM/DD/YYYY):
12/29/2016
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 7,500.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE VIOLATIONS ALLEGED IN THE STATEMENT OF CHARGES AND LETTER OF CONSENT, MERRILL LYNCH
AGREED TO A $7,500 FINE AND A CENSURE. THE FINE WAS PAID ON JANUARY 13, 2017.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE VIOLATIONS ALLEGED IN THE STATEMENT OF CHARGES AND LETTER OF CONSENT, MERRILL LYNCH AGREED TO A
$7,500 FINE AND A CENSURE.regulatory · block 66PDF pages 468–470
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 30,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED AND FINED $30,000.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO SUBMIT TO THE OVER-THE-COUNTER (OTC) REPORTING FACILITY (OTCRF) LAST SALE REPORTS OF TRANSACTIONS IN OTC EQUITY SECURITIES WITHIN 10 SECONDS AFTER EXECUTION. THE FINDINGS STATED THAT THE FIRM'S SUPERVISORY PROCEDURES WERE NOT REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONS AND TO FINRA RULES CONCERNING LATE TRADE REPORTING. SPECIFICALLY, THE FIRM FAILED TO IDENTIFY, PREVENT AND CORRECT THE FIRM'S PATTERN OR PRACTICE OF LATE TRADE REPORTING RESULTING IN VIOLATIONS OF FINRA RULE 6622(A).
Sanction detail — filed text
THE FIRM WAS CENSURED AND FINED $30,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 04/07/2017 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2015046460201 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Equity - OTC Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO SUBMIT TO THE OVER-THE-COUNTER (OTC) REPORTING FACILITY (OTCRF) LAST SALE REPORTS OF TRANSACTIONS IN OTC EQUITY SECURITIES WITHIN 10 SECONDS AFTER EXECUTION. THE FINDINGS STATED THAT THE FIRM'S SUPERVISORY PROCEDURES WERE NOT REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONS AND TO FINRA RULES CONCERNING LATE TRADE REPORTING. SPECIFICALLY, THE FIRM FAILED TO IDENTIFY, PREVENT AND CORRECT THE FIRM'S PATTERN OR PRACTICE OF LATE TRADE REPORTING RESULTING IN VIOLATIONS OF FINRA RULE 6622(A). 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 04/07/2017 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 30,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED AND FINED $30,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED AND FINED $30,000.
regulatory · block 67PDF pages 470–472
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 650,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
IN CONNECTION WITH THE AWC, THE FIRM AGREED TO AN UNDERTAKING TO SUBMIT A SIGNED, DATED LETTER OR E-MAIL TO FINRA ACKNOWLEDGING THAT IT REVISED ITS WRITTEN SUPERVISORY PROCEDURES TO ADDRESS CERTAIN OF THE MATTERS DISCUSSED IN THE AWC.
Other filed details
Description of allegations — filed text
AS RELATED TO THE HANDLING OF CERTAIN CUSTOMER ORDERS IN NON-CONVERTIBLE PREFERRED SECURITIES (NCPS), THE FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA) FOUND THAT THE FIRM VIOLATED (A) NASD RULE 2320 (OR FINRA RULE 5310 ON OR AFTER MAY 31, 2012) AND FINRA RULE 2010 IN CONNECTION WITH ITS FAILURE, IN CERTAIN INSTANCES, TO USE REASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER-DEALER MARKET AND FAILURE TO BUY OR SELL IN SUCH MARKET SO THAT THE RESULTANT PRICE TO ITS CUSTOMER WAS AS FAVORABLE AS POSSIBLE UNDER PREVAILING MARKET CONDITIONS; (B) FINRA RULE 7230A IN CONNECTION WITH THE SUBMISSION TO THE TRADE REPORTING FACILITY (TRF), IN CERTAIN INSTANCES, OF LAST SALE REPORTS OF TRANSACTIONS IN REPORTABLE SECURITIES THAT INCLUDED AN INACCURATE TIME OF EXECUTION AND MARK-UP OR MARK-DOWN IN THE UNIT PRICE; (C) SECTION 17 OF THE SECURITIES EXCHANGE ACT OF 1934 (EXCHANGE ACT) AND SEC RULE 17A- 3 THEREUNDER, NASD RULE 3110 (OR FINRA RULE 4511 ON OR AFTER DECEMBER 5, 2011) AND FINRA RULE 2010 IN CONNECTION WITH THE FAILURE TO RECORD THE CORRECT TIME OF ORDER ENTRY AND CORRECT TIME OF EXECUTION ON THE MEMORANDUM OF BROKERAGE ORDERS, IN CERTAIN INSTANCES; (D) SECTION 10 OF THE EXCHANGE ACT AND SEC RULE 10B-10 THEREUNDER, NASD RULE 2230 (OR FINRA RULE 2232 ON OR AFTER JUNE 17, 2011), AND FINRA RULE 2010 IN CONNECTION WITH THE FAILURE TO DISCLOSE, IN CERTAIN INSTANCES, ON CUSTOMER CONFIRMATIONS THE DIFFERENCE BETWEEN THE PRICE REPORTED TO THE TRF AND THE PRICE TO THE CUSTOMER, WHICH REPRESENTED COMPENSATION TO THE FIRM AND THAT THE PRICE DISCLOSED TO THE CUSTOMER DID NOT MATCH THE PRICE REPORTED TO THE TRF BUT INSTEAD INCLUDED A MARK-UP OR MARK- DOWN; AND (E) NASD RULE 3010 AND FINRA RULE 2010 BY FAILING TO HAVE IN PLACE ADEQUATE WRITTEN SUPERVISORY PROCEDURES (WSPS) REGARDING EQUITY TRADE REPORTING, THE ACCURACY OF CUSTOMER CONFIRMATIONS AND THE ACCURACY OF BOOKS AND RECORDS ON THE FIRM'S GLOBAL BANKING & MARKETS CREDIT TRADING DESK. AS RELATED TO THE HANDLING OF CUSTOMER ORDERS IN OVER-THE-COUNTER CONVERTIBLE PREFERRED SECURITIES (OTC CPS), FINRA ALSO FOUND THAT THE FIRM VIOLATED (I) NASD RULE 2320 (FOR FINRA RULE 5310 ON OR AFTER MAY 31, 2012) AND FINRA RULE 2010 IN CONNECTION WITH ITS FAILURE, IN CERTAIN INSTANCES, TO USE REASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER-DEALER MARKET AND FAILURE TO BUY OR SELL IN SUCH MARKET SO THAT THE RESULTANT PRICE TO ITS CUSTOMER WAS AS FAVORABLE AS POSSIBLE UNDER PREVAILING MARKET CONDITIONS; (II) NASD RULE 2111(A) (OR FINRA RULE 5310.01 FOR CONDUCT ON OR AFTER MAY 31, 2012) AND FINRA RULE 2010 IN CONNECTION WITH THE FAILURE TO EXECUTE ORDERS, IN CERTAIN INSTANCES; (III) VIOLATED SECTION 17 OF THE EXCHANGE ACT AND SEC RULE 17A-3 THEREUNDER, NASD RULE 3110 (OR FINRA RULE 4511 ON OR AFTER DECEMBER 5, 2011) AND FINRA RULE 2010 IN CONNECTION WITH THE INCORRECT MARKING, IN CERTAIN INSTANCES, OF "HELD" MARKET ORDERS AS "NOT HELD"; (IV) NASD RULE 3010 AND FINRA RULE 2010 BY FAILING TO HAVE IN PLACE ADEQUATE WRITTEN SUPERVISORY PROCEDURES FOR THE TIMELY HANDLING OF MARKET ORDERS IN OTC CPS HANDLED BY THE FIRM'S GLOBAL WEALTH AND RETIREMENT SOLUTIONS BLOCK TRADING DESK (BLOCK DESK); AND (V) NASD RULE 3010 AND FINRA RULE 2010 BY FAILING TO PROVIDE DOCUMENTARY EVIDENCE THAT DURING THE OTC CPS REVIEW PERIOD IT PERFORMED THE SUPERVISORY REVIEWS SET FORTH IN ITS WSPS CONCERNING BEST EXECUTION OF CUSTOMER ORDERS IN OTC CPS EXECUTED ON THE BLOCK DESK.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS IN THE AWC, THE FIRM CONSENTED TO THE IMPOSITION OF THE FOLLOWING SANCTIONS: (1) A CENSURE, (2) A FINE IN THE AMOUNT OF $650,000, (3) RESTITUTION IN THE AMOUNT OF $124,128.30 PLUS INTEREST, AND (4) A CERTAIN UNDERTAKING.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE;RESTITUTION;UNDERTAKING;INTEREST ON RESTITUTION 3. Date Initiated (MM/DD/YYYY): 05/16/2017 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: FINRA AWC NO. 2011028842101 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: NON-CONVERTIBLE PREFERRED SECURITIES AND OVER-THE-COUNTER CONVERTIBLE PREFERRED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): AS RELATED TO THE HANDLING OF CERTAIN CUSTOMER ORDERS IN NON-CONVERTIBLE PREFERRED SECURITIES (NCPS), THE FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA) FOUND THAT THE FIRM VIOLATED (A) NASD RULE 2320 (OR FINRA RULE 5310 ON OR AFTER MAY 31, 2012) AND FINRA RULE 2010 IN CONNECTION WITH ITS FAILURE, IN CERTAIN INSTANCES, TO USE REASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER-DEALER MARKET AND FAILURE TO BUY OR SELL IN SUCH MARKET SO THAT THE RESULTANT PRICE TO ITS CUSTOMER WAS AS FAVORABLE AS POSSIBLE UNDER PREVAILING MARKET CONDITIONS; (B) FINRA RULE 7230A IN CONNECTION WITH THE SUBMISSION TO THE TRADE REPORTING FACILITY (TRF), IN CERTAIN INSTANCES, OF LAST SALE REPORTS OF TRANSACTIONS IN REPORTABLE SECURITIES THAT INCLUDED AN INACCURATE TIME OF EXECUTION AND MARK-UP OR MARK-DOWN IN THE UNIT PRICE; (C) SECTION 17 OF THE SECURITIES EXCHANGE ACT OF 1934 (EXCHANGE ACT) AND SEC RULE 17A- 3 THEREUNDER, NASD RULE 3110 (OR FINRA RULE 4511 ON OR AFTER DECEMBER 5, 2011) AND FINRA RULE 2010 IN CONNECTION WITH THE FAILURE TO RECORD THE CORRECT TIME OF ORDER ENTRY AND CORRECT TIME OF EXECUTION ON THE MEMORANDUM OF BROKERAGE ORDERS, IN CERTAIN INSTANCES; (D) SECTION 10 OF THE EXCHANGE ACT AND SEC RULE 10B-10 THEREUNDER, NASD RULE 2230 (OR FINRA RULE 2232 ON OR AFTER JUNE 17, 2011), AND FINRA RULE 2010 IN CONNECTION WITH THE FAILURE TO DISCLOSE, IN CERTAIN INSTANCES, ON CUSTOMER CONFIRMATIONS THE DIFFERENCE BETWEEN THE PRICE REPORTED TO THE TRF AND THE PRICE TO THE CUSTOMER, WHICH REPRESENTED COMPENSATION TO THE FIRM AND THAT THE PRICE DISCLOSED TO THE CUSTOMER DID NOT MATCH THE PRICE REPORTED TO THE TRF BUT INSTEAD INCLUDED A MARK-UP OR MARK- DOWN; AND (E) NASD RULE 3010 AND FINRA RULE 2010 BY FAILING TO HAVE IN PLACE ADEQUATE WRITTEN SUPERVISORY PROCEDURES (WSPS) REGARDING EQUITY TRADE REPORTING, THE ACCURACY OF CUSTOMER CONFIRMATIONS AND THE ACCURACY OF BOOKS AND RECORDS ON THE FIRM'S GLOBAL BANKING & MARKETS CREDIT TRADING DESK. AS RELATED TO THE HANDLING OF CUSTOMER ORDERS IN OVER-THE-COUNTER CONVERTIBLE PREFERRED SECURITIES (OTC CPS), FINRA ALSO FOUND THAT THE FIRM VIOLATED (I) NASD RULE 2320 (FOR FINRA RULE 5310 ON OR AFTER MAY 31, 2012) AND FINRA RULE 2010 IN CONNECTION WITH ITS FAILURE, IN CERTAIN INSTANCES, TO USE REASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER-DEALER MARKET AND FAILURE TO BUY OR SELL IN SUCH MARKET SO THAT THE RESULTANT PRICE TO ITS CUSTOMER WAS AS FAVORABLE AS POSSIBLE UNDER PREVAILING MARKET CONDITIONS; (II) NASD RULE 2111(A) (OR FINRA RULE 5310.01 FOR CONDUCT ON OR AFTER MAY 31, 2012) AND FINRA RULE 2010 IN CONNECTION WITH THE FAILURE TO EXECUTE ORDERS, IN CERTAIN INSTANCES; (III) VIOLATED SECTION 17 OF THE EXCHANGE ACT AND SEC RULE 17A-3 THEREUNDER, NASD RULE 3110 (OR FINRA RULE 4511 ON OR AFTER DECEMBER 5, 2011) AND FINRA RULE 2010 IN CONNECTION WITH THE INCORRECT MARKING, IN CERTAIN INSTANCES, OF "HELD" MARKET ORDERS AS "NOT HELD"; (IV) NASD RULE 3010 AND FINRA RULE 2010 BY FAILING TO HAVE IN PLACE ADEQUATE WRITTEN SUPERVISORY PROCEDURES FOR THE TIMELY HANDLING OF MARKET ORDERS IN OTC CPS HANDLED BY THE FIRM'S GLOBAL WEALTH AND RETIREMENT SOLUTIONS BLOCK TRADING DESK (BLOCK DESK); AND (V) NASD RULE 3010 AND FINRA RULE 2010 BY FAILING TO PROVIDE DOCUMENTARY EVIDENCE THAT DURING THE OTC CPS REVIEW PERIOD IT PERFORMED THE SUPERVISORY REVIEWS SET FORTH IN ITS WSPS CONCERNING BEST EXECUTION OF CUSTOMER ORDERS IN OTC CPS EXECUTED ON THE BLOCK DESK. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 05/16/2017 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 650,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: RESTITUTION OF $124,128.30 PLUS INTEREST; UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS IN THE AWC, THE FIRM CONSENTED TO THE IMPOSITION OF THE FOLLOWING SANCTIONS: (1) A CENSURE, (2) A FINE IN THE AMOUNT OF $650,000, (3) RESTITUTION IN THE AMOUNT OF $124,128.30 PLUS INTEREST, AND (4) A CERTAIN UNDERTAKING. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). IN CONNECTION WITH THE AWC, THE FIRM AGREED TO AN UNDERTAKING TO SUBMIT A SIGNED, DATED LETTER OR E-MAIL TO FINRA ACKNOWLEDGING THAT IT REVISED ITS WRITTEN SUPERVISORY PROCEDURES TO ADDRESS CERTAIN OF THE MATTERS DISCUSSED IN THE AWC.
regulatory · block 68PDF pages 472–474
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 22,500.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED AND FINED $22,500. THE MITIGATED MONETARY SANCTION IN THIS MATTER REFLECTS THE FIRM'S SELF-REPORTING OF THE VIOLATIONS DESCRIBED ABOVE.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO REPORT 22,592 REPO TRANSACTIONS EFFECTED IN MUNICIPAL SECURITIES TO THE REAL TIME REPORTING SYSTEM (RTRS). THE FINDINGS STATED THAT THE SUPERVISORY SYSTEM ON THE DESK RESPONSIBLE FOR EFFECTING THE RELEVANT REPO TRANSACTIONS DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONS, AND THE MUNICIPAL SECURITIES RULEMAKING BOARD (MSRB) RULES, CONCERNING THE REPORTING OF TRANSACTIONS IN MUNICIPAL SECURITIES.
Sanction detail — filed text
THE FIRM WAS CENSURED AND FINED $22,500. THE MITIGATED MONETARY SANCTION IN THIS MATTER REFLECTS THE FIRM'S SELF-REPORTING OF THE VIOLATIONS DESCRIBED ABOVE.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 08/17/2017 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2016049381801 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Debt - Municipal Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO REPORT 22,592 REPO TRANSACTIONS EFFECTED IN MUNICIPAL SECURITIES TO THE REAL TIME REPORTING SYSTEM (RTRS). THE FINDINGS STATED THAT THE SUPERVISORY SYSTEM ON THE DESK RESPONSIBLE FOR EFFECTING THE RELEVANT REPO TRANSACTIONS DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONS, AND THE MUNICIPAL SECURITIES RULEMAKING BOARD (MSRB) RULES, CONCERNING THE REPORTING OF TRANSACTIONS IN MUNICIPAL SECURITIES. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 08/17/2017 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 22,500.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED AND FINED $22,500. THE MITIGATED MONETARY SANCTION IN THIS MATTER REFLECTS THE FIRM'S SELF-REPORTING OF THE VIOLATIONS DESCRIBED ABOVE. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED AND FINED $22,500. THE MITIGATED MONETARY SANCTION IN THIS MATTER REFLECTS THE FIRM'S SELF-REPORTING OF THE VIOLATIONS DESCRIBED ABOVE.
regulatory · block 69PDF pages 474–476
- Regulator name — filed text
- COMMODITY FUTURES TRADING COMMISSION
- Monetary/Fine Amount — filed text
- $ 2,500,000.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING ANY OF THE FINDINGS OR CONCLUSIONS IN THE ORDER, THE FIRM CONSENTED TO THE IMPOSITION OF THE FOLLOWING SANCTIONS: (1) TO CEASE AND DESIST FROM VIOLATING SECTION 4G OF THE CEA AND REGULATIONS 1.31, 1.35 AND 166.3 THEREUNDER, (2) TO PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $2,500,000, (3) TO COMPLY WITH CERTAIN UNDERTAKINGS.
Other filed details
Description of allegations — filed text
THE COMMODITY FUTURES TRADING COMMISSION (CFTC) ALLEGED THAT IT HAD REASON TO BELIEVE THAT THE FIRM (A) VIOLATED REGULATION 166.3, 17 C.F.R. § 166.3 (2016), UNDER THE COMMODITY EXCHANGE ACT (CEA) IN CONNECTION WITH ITS ALLEGED FAILURE TO SUPERVISE DILIGENTLY THE FIRM'S RESPONSE TO THE INVESTIGATION BY THE CME GROUP INC.'S MARKET REGULATION DEPARTMENT REGARDING RECORDKEEPING AND EXECUTION PRACTICES WITH RESPECT TO BLOCK TRADES; (B) VIOLATED REGULATION 166.3, 17 C.F.R. § 166.3 (2016), UNDER THE CEA IN CONNECTION WITH ITS ALLEGED INADEQUATE PROCEDURES FOR PREPARING AND MAINTAINING RECORDS FOR BLOCK TRADES EXECUTED BY THE SWAPS DESK, INCLUDING PROCEDURES FOR RECORDING ACCURATE BLOCK TRADE EXECUTION TIMES AND NOT BEING DILIGENT IN ENSURING THAT ITS EXISTING PROCEDURES FOR PREPARING AND MAINTAINING RECORDS FOR BLOCK TRADES WERE BEING IMPLEMENTED; AND (C) VIOLATED SECTION 4G OF THE CEA, 7 U.S.C. § 6G (2012) AND REGULATIONS 1.31 AND 1.35 UNDER THE CEA, 17 C.F.R. §§ 1.31 AND 1.35 (2016) IN CONNECTION WITH ITS ALLEGED FAILURE TO MAINTAIN CERTAIN BOOKS AND RECORDS REGARDING THE EXECUTION OF BLOCK TRADES.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING ANY OF THE FINDINGS OR CONCLUSIONS IN THE ORDER, THE FIRM CONSENTED TO THE IMPOSITION OF THE FOLLOWING SANCTIONS: (1) TO CEASE AND DESIST FROM VIOLATING SECTION 4G OF THE CEA AND REGULATIONS 1.31, 1.35 AND 166.3 THEREUNDER, (2) TO PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $2,500,000, (3) TO COMPLY WITH CERTAIN UNDERTAKINGS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) COMMODITY FUTURES TRADING COMMISSION 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CEASE AND DESIST; UNDERTAKINGS 3. Date Initiated (MM/DD/YYYY): 09/22/2017 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: CFTC DOCKET NO. 17-25 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Futures - Financial Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE COMMODITY FUTURES TRADING COMMISSION (CFTC) ALLEGED THAT IT HAD REASON TO BELIEVE THAT THE FIRM (A) VIOLATED REGULATION 166.3, 17 C.F.R. § 166.3 (2016), UNDER THE COMMODITY EXCHANGE ACT (CEA) IN CONNECTION WITH ITS ALLEGED FAILURE TO SUPERVISE DILIGENTLY THE FIRM'S RESPONSE TO THE INVESTIGATION BY THE CME GROUP INC.'S MARKET REGULATION DEPARTMENT REGARDING RECORDKEEPING AND EXECUTION PRACTICES WITH RESPECT TO BLOCK TRADES; (B) VIOLATED REGULATION 166.3, 17 C.F.R. § 166.3 (2016), UNDER THE CEA IN CONNECTION WITH ITS ALLEGED INADEQUATE PROCEDURES FOR PREPARING AND MAINTAINING RECORDS FOR BLOCK TRADES EXECUTED BY THE SWAPS DESK, INCLUDING PROCEDURES FOR RECORDING ACCURATE BLOCK TRADE EXECUTION TIMES AND NOT BEING DILIGENT IN ENSURING THAT ITS EXISTING PROCEDURES FOR PREPARING AND MAINTAINING RECORDS FOR BLOCK TRADES WERE BEING IMPLEMENTED; AND (C) VIOLATED SECTION 4G OF THE CEA, 7 U.S.C. § 6G (2012) AND REGULATIONS 1.31 AND 1.35 UNDER THE CEA, 17 C.F.R. §§ 1.31 AND 1.35 (2016) IN CONNECTION WITH ITS ALLEGED FAILURE TO MAINTAIN CERTAIN BOOKS AND RECORDS REGARDING THE EXECUTION OF BLOCK TRADES. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Order 11. Resolution Date (MM/DD/YYYY): 09/22/2017 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 2,500,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKINGS Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING ANY OF THE FINDINGS OR CONCLUSIONS IN THE ORDER, THE FIRM CONSENTED TO THE IMPOSITION OF THE FOLLOWING SANCTIONS: (1) TO CEASE AND DESIST FROM VIOLATING SECTION 4G OF THE CEA AND REGULATIONS 1.31, 1.35 AND 166.3 THEREUNDER, (2) TO PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $2,500,000, (3) TO COMPLY WITH CERTAIN UNDERTAKINGS. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING ANY OF THE FINDINGS OR CONCLUSIONS IN THE ORDER, THE FIRM CONSENTED TO THE IMPOSITION OF THE FOLLOWING SANCTIONS: (1) TO CEASE AND DESIST FROM VIOLATING SECTION 4G OF THE CEA AND REGULATIONS 1.31, 1.35 AND 166.3 THEREUNDER, (2) TO PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $2,500,000, (3) TO COMPLY WITH CERTAIN UNDERTAKINGS.
regulatory · block 70PDF pages 476–478
- Regulator name — filed text
- NYSE AMERICAN LLC
- Monetary/Fine Amount — filed text
- $ 135,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
IN CONNECTION WITH NYSE REGULATION'S INVESTIGATION, THE FIRM PAID ITS CUSTOMER $20,000 IN RESTITUTION.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT HAD A PREVIOUSLY EXECUTED CUSTOMER ORDER NULLIFIED AND ADJUSTED TO AN INFERIOR PRICE, IN VIOLATION OF THE FIRM'S BEST EXECUTION OBLIGATIONS. THE NULLIFICATION AND ADJUSTMENT OCCURRED WITHOUT THE CUSTOMER'S KNOWLEDGE AND CONSENT, AND TO A PRICE OUTSIDE OF NYSE AMERICAN'S BEST BID AND OFFER. THE FINDINGS STATED THAT THE FIRM FAILED TO IMPLEMENT ADEQUATE SUPERVISORY SYSTEMS AND CONTROLS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE AMERICAN RULE 966NY, AS WELL AS NYSE AMERICAN RULES 16 AND 476(A) (6) AS THEY PERTAIN TO THE BEST EXECUTION OF CLIENT MULTI-LEG OPTIONS TRANSACTIONS. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO IMPLEMENT ADEQUATE SUPERVISORY SYSTEMS AND CONTROLS, AND ADEQUATE WRITTEN SUPERVISORY PROCEDURES, REASONABLY DESIGNED TO ENSURE THE PRESERVATION OF CERTAIN DOCUMENTS AND INFORMATION THAT THE FIRM KNEW, OR REASONABLY SHOULD HAVE KNOWN, POTENTIALLY WERE RELEVANT TO THE POSSIBLE REGULATORY ACTION.
Sanction detail — filed text
THE FIRM WAS CENSURED AND FINED $135,000. THE FIRM WAS ALSO GIVEN AN UNDERTAKING. PURSUANT TO NYSE AMERICAN RULE 9310(A)(1) (B), THIS AWC BECAME FINAL ON OCTOBER 21, 2017, SINCE NO REVIEW WAS REQUESTED BY A DIRECTOR OR MEMBER OF THE COMMITTEE FOR REVIEW.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) NYSE AMERICAN LLC 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 09/26/2017 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2016-07-01304 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Options Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT HAD A PREVIOUSLY EXECUTED CUSTOMER ORDER NULLIFIED AND ADJUSTED TO AN INFERIOR PRICE, IN VIOLATION OF THE FIRM'S BEST EXECUTION OBLIGATIONS. THE NULLIFICATION AND ADJUSTMENT OCCURRED WITHOUT THE CUSTOMER'S KNOWLEDGE AND CONSENT, AND TO A PRICE OUTSIDE OF NYSE AMERICAN'S BEST BID AND OFFER. THE FINDINGS STATED THAT THE FIRM FAILED TO IMPLEMENT ADEQUATE SUPERVISORY SYSTEMS AND CONTROLS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE AMERICAN RULE 966NY, AS WELL AS NYSE AMERICAN RULES 16 AND 476(A) (6) AS THEY PERTAIN TO THE BEST EXECUTION OF CLIENT MULTI-LEG OPTIONS TRANSACTIONS. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO IMPLEMENT ADEQUATE SUPERVISORY SYSTEMS AND CONTROLS, AND ADEQUATE WRITTEN SUPERVISORY PROCEDURES, REASONABLY DESIGNED TO ENSURE THE PRESERVATION OF CERTAIN DOCUMENTS AND INFORMATION THAT THE FIRM KNEW, OR REASONABLY SHOULD HAVE KNOWN, POTENTIALLY WERE RELEVANT TO THE POSSIBLE REGULATORY ACTION. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 10/21/2017 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 135,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED AND FINED $135,000. THE FIRM WAS ALSO GIVEN AN UNDERTAKING. PURSUANT TO NYSE AMERICAN RULE 9310(A)(1) (B), THIS AWC BECAME FINAL ON OCTOBER 21, 2017, SINCE NO REVIEW WAS REQUESTED BY A DIRECTOR OR MEMBER OF THE COMMITTEE FOR REVIEW. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). IN CONNECTION WITH NYSE REGULATION'S INVESTIGATION, THE FIRM PAID ITS CUSTOMER $20,000 IN RESTITUTION.
regulatory · block 71PDF pages 478–480
- Regulator name — filed text
- BATS EDGX EXCHANGE, INC.
- Monetary/Fine Amount — filed text
- $ 52,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO THE FOLLOWING SANCTIONS: (1) A CENSURE, AND (2) A FINE IN THE AMOUNT OF $52,000.
Other filed details
Description of allegations — filed text
BATS EDGX EXCHANGE ALLEGED THAT THE FIRM (1) FAILED TO REASONABLY AVOID DISPLAYING, AND ENGAGED IN A PATTERN OR PRACTICE OF DISPLAYING, QUOTATIONS THAT LOCKED OR CROSSED A PROTECTED QUOTATION, IN VIOLATION OF EDGX RULES 11.8(C) AND 11.10(F), AND (2) FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH EDGX RULES 11.8(C) AND 11.10(F) REGARDING DISPLAYING QUOTATIONS THAT LOCKED OR CROSSED A PROTECTED QUOTATION, IN VIOLATION OF EDGX RULES 3.1, 5.1, 5.2 AND 5.3.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO THE FOLLOWING SANCTIONS: (1) A CENSURE, AND (2) A FINE IN THE AMOUNT OF $52,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) BATS EDGX EXCHANGE, INC. 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 10/31/2017 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: AWC NO. 20140437801-02 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: UNSPECIFIED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): BATS EDGX EXCHANGE ALLEGED THAT THE FIRM (1) FAILED TO REASONABLY AVOID DISPLAYING, AND ENGAGED IN A PATTERN OR PRACTICE OF DISPLAYING, QUOTATIONS THAT LOCKED OR CROSSED A PROTECTED QUOTATION, IN VIOLATION OF EDGX RULES 11.8(C) AND 11.10(F), AND (2) FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH EDGX RULES 11.8(C) AND 11.10(F) REGARDING DISPLAYING QUOTATIONS THAT LOCKED OR CROSSED A PROTECTED QUOTATION, IN VIOLATION OF EDGX RULES 3.1, 5.1, 5.2 AND 5.3. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 11/29/2017 Exact Explanation If not exact, provide explanation: PURSUANT TO EDGX RULE 8.8, THE DECISION IN THIS MATTER WILL BE FINAL 20 BUSINESS DAYS AFTER THE ISSUANCE OF THE DECISION. 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 52,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO THE FOLLOWING SANCTIONS: (1) A CENSURE, AND (2) A FINE IN THE AMOUNT OF $52,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO THE FOLLOWING SANCTIONS: (1) A CENSURE, AND (2) A FINE IN THE AMOUNT OF $52,000.
regulatory · block 72PDF pages 480–481
- Regulator name — filed text
- NASDAQ STOCK MARKET
- Monetary/Fine Amount — filed text
- $ 38,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO THE FOLLOWING SANCTIONS: (1) A CENSURE, AND (2) A FINE IN THE AMOUNT OF $38,000.
Other filed details
Description of allegations — filed text
NASDAQ STOCK MARKET ALLEGED THAT THE FIRM (1) FAILED TO REASONABLY AVOID DISPLAYING, AND ENGAGED IN A PATTERN OR PRACTICE OF DISPLAYING, QUOTATIONS THAT LOCKED OR CROSSED A PROTECTED QUOTATION, IN VIOLATION OF NASDAQ RULES 4613(E) AND 4755(A)(4), AND (2) FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NASDAQ RULES 4613(E) AND 4755(A)(4) REGARDING DISPLAYING QUOTATIONS THAT LOCKED OR CROSSED A PROTECTED QUOTATION, IN VIOLATION OF NASDAQ RULES 2010A AND 3010.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO THE FOLLOWING SANCTIONS: (1) A CENSURE, AND (2) A FINE IN THE AMOUNT OF $38,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) NASDAQ STOCK MARKET 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 10/31/2017 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: AWC NO. 20140437801-01 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: UNSPECIFIED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): NASDAQ STOCK MARKET ALLEGED THAT THE FIRM (1) FAILED TO REASONABLY AVOID DISPLAYING, AND ENGAGED IN A PATTERN OR PRACTICE OF DISPLAYING, QUOTATIONS THAT LOCKED OR CROSSED A PROTECTED QUOTATION, IN VIOLATION OF NASDAQ RULES 4613(E) AND 4755(A)(4), AND (2) FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NASDAQ RULES 4613(E) AND 4755(A)(4) REGARDING DISPLAYING QUOTATIONS THAT LOCKED OR CROSSED A PROTECTED QUOTATION, IN VIOLATION OF NASDAQ RULES 2010A AND 3010. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 10/31/2017 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 38,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO THE FOLLOWING SANCTIONS: (1) A CENSURE, AND (2) A FINE IN THE AMOUNT OF $38,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO THE FOLLOWING SANCTIONS: (1) A CENSURE, AND (2) A FINE IN THE AMOUNT OF $38,000.
regulatory · block 73PDF pages 481–483
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 1,400,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED AND FINED $1,400,000.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE ENTRY OF THE FOLLOWING FINDINGS BY FINRA: THE FIRM FAILED TO IDENTIFY AND EVALUATE CERTAIN TRADES WITH EXTENDED SETTLEMENT DATES (ES TRADES) ACROSS ITS PRODUCT LINES AND BUSINESS UNITS FOR MARGIN AND NET CAPITAL PURPOSES. AS A RESULT, THE FIRM FOR THESE TRADES FAILED TO COLLECT THE REQUISITE MARGIN IN VIOLATION OF FINRA RULES 4210 AND 2010; TAKE THE APPROPRIATE NET CAPITAL DEDUCTION IN VIOLATION OF SECTION 15(C) OF THE SECURITIES EXCHANGE ACT OF 1934 (SEA) AND RULE 15C3-1(C) THEREUNDER AND FINRA RULE 2010; PREVENT EXTENSION OF CREDIT IN CASH ACCOUNTS IN VIOLATION OF FINRA RULE 2010 BY VIOLATING REGULATION T OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (REG T); MAINTAIN ACCURATE SCHEDULES TO THE GENERAL LEDGER IN VIOLATION OF SECTION 17(A) OF THE SEA AND RULE 17A-3 THEREUNDER AND FINRA RULES 4511 AND 2010; AND FILE ACCURATE FOCUS REPORTS IN VIOLATION OF SEA RULE 17A-5 AND FINRA RULE 2010. THE FIRM ALSO FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A REASONABLE SUPERVISORY SYSTEM, INCLUDING WRITTEN SUPERVISORY PROCEDURES (WSPS), DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE FEDERAL SECURITIES LAWS AND REGULATIONS WITH RESPECT TO MARGIN, NET CAPITAL, BOOKS AND RECORDS, AND FINANCIAL AND OPERATIONAL COMBINED UNIFORM SINGLE (FOCUS) REPORTS IN VIOLATION OF FINRA RULE 3110, AND ITS PREDECESSOR RULE, NASD RULE 3010. THE FIRM'S SUPERVISORY SYSTEM AND WRITTEN PROCEDURES FAILED TO IDENTIFY AND CONSIDER ES TRADES ACROSS ITS PRODUCT LINES AND BUSINESS UNITS. ALTHOUGH THE FIRM WAS MADE AWARE OF THESE SUPERVISORY DEFICIENCIES IN APRIL 2013 THROUGH FINDINGS MADE DURING A FINRA'S DEPARTMENT OF MEMBER REGULATION MEMBER REGULATION EXAMINATION, THE FIRM FAILED TO IMPLEMENT ANY REMEDIAL MEASURES UNTIL MID-2014, AND FAILED TO IMPLEMENT A REASONABLE FIRM-WIDE SUPERVISORY SYSTEM TO IDENTIFY AND CONSIDER ES TRADES UNTIL MID-2015.
Sanction detail — filed text
THE FIRM WAS CENSURED AND FINED $1,400,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 12/19/2017 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2014041808101 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: MORTGAGE-BACKED SECURITIES, GOVERNMENT AND AGENCY DEBT, MUNICIPAL AND EQUITY SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE ENTRY OF THE FOLLOWING FINDINGS BY FINRA: THE FIRM FAILED TO IDENTIFY AND EVALUATE CERTAIN TRADES WITH EXTENDED SETTLEMENT DATES (ES TRADES) ACROSS ITS PRODUCT LINES AND BUSINESS UNITS FOR MARGIN AND NET CAPITAL PURPOSES. AS A RESULT, THE FIRM FOR THESE TRADES FAILED TO COLLECT THE REQUISITE MARGIN IN VIOLATION OF FINRA RULES 4210 AND 2010; TAKE THE APPROPRIATE NET CAPITAL DEDUCTION IN VIOLATION OF SECTION 15(C) OF THE SECURITIES EXCHANGE ACT OF 1934 (SEA) AND RULE 15C3-1(C) THEREUNDER AND FINRA RULE 2010; PREVENT EXTENSION OF CREDIT IN CASH ACCOUNTS IN VIOLATION OF FINRA RULE 2010 BY VIOLATING REGULATION T OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (REG T); MAINTAIN ACCURATE SCHEDULES TO THE GENERAL LEDGER IN VIOLATION OF SECTION 17(A) OF THE SEA AND RULE 17A-3 THEREUNDER AND FINRA RULES 4511 AND 2010; AND FILE ACCURATE FOCUS REPORTS IN VIOLATION OF SEA RULE 17A-5 AND FINRA RULE 2010. THE FIRM ALSO FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A REASONABLE SUPERVISORY SYSTEM, INCLUDING WRITTEN SUPERVISORY PROCEDURES (WSPS), DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE FEDERAL SECURITIES LAWS AND REGULATIONS WITH RESPECT TO MARGIN, NET CAPITAL, BOOKS AND RECORDS, AND FINANCIAL AND OPERATIONAL COMBINED UNIFORM SINGLE (FOCUS) REPORTS IN VIOLATION OF FINRA RULE 3110, AND ITS PREDECESSOR RULE, NASD RULE 3010. THE FIRM'S SUPERVISORY SYSTEM AND WRITTEN PROCEDURES FAILED TO IDENTIFY AND CONSIDER ES TRADES ACROSS ITS PRODUCT LINES AND BUSINESS UNITS. ALTHOUGH THE FIRM WAS MADE AWARE OF THESE SUPERVISORY DEFICIENCIES IN APRIL 2013 THROUGH FINDINGS MADE DURING A FINRA'S DEPARTMENT OF MEMBER REGULATION MEMBER REGULATION EXAMINATION, THE FIRM FAILED TO IMPLEMENT ANY REMEDIAL MEASURES UNTIL MID-2014, AND FAILED TO IMPLEMENT A REASONABLE FIRM-WIDE SUPERVISORY SYSTEM TO IDENTIFY AND CONSIDER ES TRADES UNTIL MID-2015. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 12/19/2017 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 1,400,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED AND FINED $1,400,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED AND FINED $1,400,000.
regulatory · block 74PDF pages 483–485
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 13,000,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED AND FINED $13,000,000.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT AT VARIOUS RELEVANT TIMES, THE FIRM'S IMPLEMENTATION OF CERTAIN SYSTEMS AND PROCEDURES THAT COMPRISE ITS AML PROGRAM RELATED TO RETAIL BROKERAGE ACCOUNTS SUFFERED FROM NUMEROUS DEFICIENCIES. THE FINDINGS STATED THAT THE FIRM USED AN AUTOMATED MONITORING SYSTEM CALLED MANTAS AS A CENTRAL PART OF ITS AML PROGRAM TO MONITOR FOR POTENTIALLY SUSPICIOUS ACTIVITY IN FIRM BROKERAGE ACCOUNTS. IN APPROXIMATELY OCTOBER 2010, THE FIRM CONNECTED MANTAS TO A COMPANY'S, THAT THE FIRM WAS A SUBSIDIARY OF, ENTERPRISE-WIDE, PROPRIETARY SYSTEM CALLED "EVENT PROCESSOR." THEREAFTER, MANTAS GENERATED EVENTS RELATED TO POTENTIALLY SUSPICIOUS ACTIVITIES AND FED THESE EVENTS INTO EVENT PROCESSOR, AND EVENT PROCESSOR GROUPED MANTAS EVENTS WITH OTHER EVENTS GENERATED BY OTHER MONITORING SYSTEMS INTO "EVENT GROUPS." EACH EVENT GROUP WAS SCORED BASED ON THE AML RISK POSED BY THE EVENTS OR CUSTOMER TYPES IDENTIFIED; IF THE TOTAL SCORE FOR AN EVENT GROUP REACHED A CERTAIN RISK-BASED THRESHOLD, THE FIRM OPENED AN INVESTIGATION OF THE ACTIVITY. FOR A FOUR-MONTH PERIOD, THE FIRM DID NOT INVESTIGATE SUSPICIOUS ACTIVITY DETECTED ONLY BY MANTAS. BY 2011, THE FIRM BELIEVED THAT SYSTEM WAS PRODUCING TOO MANY "FALSE POSITIVES" AND DETERMINED TO CHANGE HOW THE SYSTEM GENERATED AND SCORED MANTAS EVENTS AND INVESTIGATED POTENTIALLY SUSPICIOUS ACTIVITY. FROM SEPTEMBER 2011 UNTIL FEBRUARY 2012, THE FIRM DECIDED TO NOT INVESTIGATE EVENT GROUPS GENERATED ONLY FROM MANTAS EVENTS WHILE IT IMPLEMENTED THE CHANGES. THE FIRM ALSO DECIDED NOT TO REVIEW HUNDREDS OF MANTAS ALERTS THAT HAD BEEN GENERATED BY THE AUTOMATED SURVEILLANCE SYSTEM. AS A RESULT OF THESE DECISIONS, THE FIRM FAILED TO INVESTIGATE 1,015 INSTANCES OF POTENTIALLY SUSPICIOUS ACTIVITY AT THAT TIME AND THEN ONLY AFTER THE INVESTIGATION THAT LED TO THIS SETTLEMENT HAD BEGUN. THE FINDINGS ALSO STATED THAT HOW THE FIRM SCORED CERTAIN EVENTS IN ITS AUTOMATED SURVEILLANCE SYSTEM MINIMIZED POTENTIALLY SUSPICIOUS ACTIVITY OR PREVENTED SUCH ACTIVITY FROM BEING REVIEWED. FOR EXAMPLE, THE FIRM DETERMINED TO SCORE MULTIPLE OCCURRENCES OF POTENTIALLY SUSPICIOUS MONEY MOVEMENTS INVOLVING HIGH RISK COUNTERPARTIES AND ENTITIES ONCE. UNTIL 2015, IT DID NOT LINK RELATED ACCOUNTS FOR SOME OF THE FIRM'S HIGHEST RISK CUSTOMERS AND DID NOT CONSISTENTLY IDENTIFY OR MONITOR CUSTOMERS IN CERTAIN HIGH RISK JURISDICTIONS OR SENIOR FOREIGN POLITICAL FIGURES WHO WERE OPENING OR CONDUCTING TRANSACTIONS THROUGH FIRM ACCOUNTS. THE FINDINGS ALSO INCLUDED THAT THE FIRM EXCLUDED MILLIONS OF ACCOUNTS FROM ITS AUTOMATED MONITORING SYSTEM AND THEREFORE FAILED ADEQUATELY TO MONITOR THE ACCOUNTS FOR POTENTIALLY SUSPICIOUS ACTIVITY. THESE ACCOUNTS INCLUDED RETIREMENT ACCOUNTS, CERTAIN SECURITIES-BASED LOAN ACCOUNTS AND THE ACCOUNTS PLEDGED TO THEM, AND CERTAIN MANAGED ACCOUNTS WHOSE INVESTMENTS WERE NOT CONTROLLED BY THE BENEFICIAL OWNER. AS A RESULT OF THESE DEFICIENCIES, THE FIRM FAILED TO HAVE SYSTEMS AND PROCEDURES REASONABLY DESIGNED TO MONITOR FOR, DETECT, AND REPORT SUSPICIOUS ACTIVITY. FINRA FOUND THAT THE FIRM FAILED TO IMPLEMENT ADEQUATE SYSTEMS AND PROCEDURES AS PART OF ITS AML PROGRAM AND AS A RESULT IT FAILED TO DETECT AND INVESTIGATE POTENTIALLY SUSPICIOUS ACTIVITY. DUE IN LARGE PART TO THE DEFICIENCIES IN THE OPERATION OF THE AML MONITORING SYSTEMS FOR RETAIL BROKERAGE ACCOUNTS, THE FIRM FAILED TO DETECT OR INVESTIGATE CERTAIN POTENTIALLY SUSPICIOUS ACTIVITY IN RETAIL BROKERAGE ACCOUNTS MAINTAINED FOR NON-RESIDENT ALIENS AT "INTERNATIONAL" AND NON- RESIDENT CLIENT BRANCHES, AMONG OTHERS, FOR NON-U.S. CITIZENS DOMICILED OUTSIDE THE U.S. AND ACTIVITY INVOLVING CUSTOMERS WHO WERE TAKING OUT LOANS FROM FIRM AFFILIATES.
Sanction detail — filed text
THE FIRM WAS CENSURED AND FINED $13,000,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 12/21/2017 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2012035224301 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT AT VARIOUS RELEVANT TIMES, THE FIRM'S IMPLEMENTATION OF CERTAIN SYSTEMS AND PROCEDURES THAT COMPRISE ITS AML PROGRAM RELATED TO RETAIL BROKERAGE ACCOUNTS SUFFERED FROM NUMEROUS DEFICIENCIES. THE FINDINGS STATED THAT THE FIRM USED AN AUTOMATED MONITORING SYSTEM CALLED MANTAS AS A CENTRAL PART OF ITS AML PROGRAM TO MONITOR FOR POTENTIALLY SUSPICIOUS ACTIVITY IN FIRM BROKERAGE ACCOUNTS. IN APPROXIMATELY OCTOBER 2010, THE FIRM CONNECTED MANTAS TO A COMPANY'S, THAT THE FIRM WAS A SUBSIDIARY OF, ENTERPRISE-WIDE, PROPRIETARY SYSTEM CALLED "EVENT PROCESSOR." THEREAFTER, MANTAS GENERATED EVENTS RELATED TO POTENTIALLY SUSPICIOUS ACTIVITIES AND FED THESE EVENTS INTO EVENT PROCESSOR, AND EVENT PROCESSOR GROUPED MANTAS EVENTS WITH OTHER EVENTS GENERATED BY OTHER MONITORING SYSTEMS INTO "EVENT GROUPS." EACH EVENT GROUP WAS SCORED BASED ON THE AML RISK POSED BY THE EVENTS OR CUSTOMER TYPES IDENTIFIED; IF THE TOTAL SCORE FOR AN EVENT GROUP REACHED A CERTAIN RISK-BASED THRESHOLD, THE FIRM OPENED AN INVESTIGATION OF THE ACTIVITY. FOR A FOUR-MONTH PERIOD, THE FIRM DID NOT INVESTIGATE SUSPICIOUS ACTIVITY DETECTED ONLY BY MANTAS. BY 2011, THE FIRM BELIEVED THAT SYSTEM WAS PRODUCING TOO MANY "FALSE POSITIVES" AND DETERMINED TO CHANGE HOW THE SYSTEM GENERATED AND SCORED MANTAS EVENTS AND INVESTIGATED POTENTIALLY SUSPICIOUS ACTIVITY. FROM SEPTEMBER 2011 UNTIL FEBRUARY 2012, THE FIRM DECIDED TO NOT INVESTIGATE EVENT GROUPS GENERATED ONLY FROM MANTAS EVENTS WHILE IT IMPLEMENTED THE CHANGES. THE FIRM ALSO DECIDED NOT TO REVIEW HUNDREDS OF MANTAS ALERTS THAT HAD BEEN GENERATED BY THE AUTOMATED SURVEILLANCE SYSTEM. AS A RESULT OF THESE DECISIONS, THE FIRM FAILED TO INVESTIGATE 1,015 INSTANCES OF POTENTIALLY SUSPICIOUS ACTIVITY AT THAT TIME AND THEN ONLY AFTER THE INVESTIGATION THAT LED TO THIS SETTLEMENT HAD BEGUN. THE FINDINGS ALSO STATED THAT HOW THE FIRM SCORED CERTAIN EVENTS IN ITS AUTOMATED SURVEILLANCE SYSTEM MINIMIZED POTENTIALLY SUSPICIOUS ACTIVITY OR PREVENTED SUCH ACTIVITY FROM BEING REVIEWED. FOR EXAMPLE, THE FIRM DETERMINED TO SCORE MULTIPLE OCCURRENCES OF POTENTIALLY SUSPICIOUS MONEY MOVEMENTS INVOLVING HIGH RISK COUNTERPARTIES AND ENTITIES ONCE. UNTIL 2015, IT DID NOT LINK RELATED ACCOUNTS FOR SOME OF THE FIRM'S HIGHEST RISK CUSTOMERS AND DID NOT CONSISTENTLY IDENTIFY OR MONITOR CUSTOMERS IN CERTAIN HIGH RISK JURISDICTIONS OR SENIOR FOREIGN POLITICAL FIGURES WHO WERE OPENING OR CONDUCTING TRANSACTIONS THROUGH FIRM ACCOUNTS. THE FINDINGS ALSO INCLUDED THAT THE FIRM EXCLUDED MILLIONS OF ACCOUNTS FROM ITS AUTOMATED MONITORING SYSTEM AND THEREFORE FAILED ADEQUATELY TO MONITOR THE ACCOUNTS FOR POTENTIALLY SUSPICIOUS ACTIVITY. THESE ACCOUNTS INCLUDED RETIREMENT ACCOUNTS, CERTAIN SECURITIES-BASED LOAN ACCOUNTS AND THE ACCOUNTS PLEDGED TO THEM, AND CERTAIN MANAGED ACCOUNTS WHOSE INVESTMENTS WERE NOT CONTROLLED BY THE BENEFICIAL OWNER. AS A RESULT OF THESE DEFICIENCIES, THE FIRM FAILED TO HAVE SYSTEMS AND PROCEDURES REASONABLY DESIGNED TO MONITOR FOR, DETECT, AND REPORT SUSPICIOUS ACTIVITY. FINRA FOUND THAT THE FIRM FAILED TO IMPLEMENT ADEQUATE SYSTEMS AND PROCEDURES AS PART OF ITS AML PROGRAM AND AS A RESULT IT FAILED TO DETECT AND INVESTIGATE POTENTIALLY SUSPICIOUS ACTIVITY. DUE IN LARGE PART TO THE DEFICIENCIES IN THE OPERATION OF THE AML MONITORING SYSTEMS FOR RETAIL BROKERAGE ACCOUNTS, THE FIRM FAILED TO DETECT OR INVESTIGATE CERTAIN POTENTIALLY SUSPICIOUS ACTIVITY IN RETAIL BROKERAGE ACCOUNTS MAINTAINED FOR NON-RESIDENT ALIENS AT "INTERNATIONAL" AND NON- RESIDENT CLIENT BRANCHES, AMONG OTHERS, FOR NON-U.S. CITIZENS DOMICILED OUTSIDE THE U.S. AND ACTIVITY INVOLVING CUSTOMERS WHO WERE TAKING OUT LOANS FROM FIRM AFFILIATES. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 12/21/2017 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 13,000,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED AND FINED $13,000,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED AND FINED $13,000,000.
regulatory · block 75PDF pages 485–488
- Regulator name — filed text
- UNITED STATES SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 13,000,000.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
IN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS, THE FIRM HAS SUBMITTED AN OFFER OF SETTLEMENT (THE OFFER) WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. SOLELY FOR THE PURPOSE OF THESE PROCEEDINGS AND ANY OTHER PROCEEDINGS BROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TO WHICH THE COMMISSION IS A PARTY, AND WITHOUT ADMITTING OR DENYING THE FINDINGS HEREIN, EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER HIM AND THE SUBJECT MATTER OF THESE PROCEEDINGS, WHICH ARE ADMITTED, THE FIRM CONSENTS TO THE ENTRY OF THIS ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS, PURSUANT TO SECTIONS 15(B) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934, AND SECTION 203(E) OF THE INVESTMENT ADVISERS ACT OF 1940, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER (ORDER). BY FAILING TO FILE SARS WITH RESPECT TO CERTAIN OF ITS CUSTOMERS' ACTIVITY AS DESCRIBED ABOVE, THE FIRM WILLFULLY VIOLATED SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-8 THEREUNDER. IN VIEW OF THE FOREGOING, THE COMMISSION DEEMS IT APPROPRIATE, IN THE PUBLIC INTEREST TO IMPOSE THE SANCTIONS AGREED TO IN THE FIRM'S OFFER. ACCORDINGLY, PURSUANT TO SECTIONS 15(B) AND 21C OF THE EXCHANGE ACT AND SECTION 203(F) OF THE ADVISERS ACT, IT IS HEREBY ORDERED THAT THE FIRM CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF EXCHANGE ACT SECTION 17(A) OR RULE 17A-8 PROMULGATED THEREUNDER; THE FIRM BE, AND HEREBY IS CENSURED; AND SHALL, WITHIN 14 DAYS OF THE ENTRY OF THIS ORDER, PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $13,000,000 TO THE SECURITIES AND EXCHANGE COMMISSION.
Other filed details
Description of allegations — filed text
SEC ADMIN RELEASE 34-82382; IA RELEASE 4831, DECEMBER 21, 2017: THE SECURITIES AND EXCHANGE COMMISSION (COMMISSION) DEEMS IT APPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TO SECTIONS 15(B), AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934 (EXCHANGE ACT) AND SECTION 203(E) OF THE INVESTMENT ADVISERS ACT OF 1940 (ADVISERS ACT) AGAINST THE FIRM. THE FIRM, IN ADDITION TO OFFERING ITS CUSTOMERS THE ABILITY TO BUY AND SELL SECURITIES, OFFERED ITS CUSTOMERS OTHER SERVICES IN BROKERAGE ACCOUNTS, SUCH AS ATM CASH DEPOSITS, WIRES, JOURNAL-ENTRY TRANSFERS, CHECK WRITING, ATM WITHDRAWALS, CASH ADVANCES, AND ACH TRANSFERS. BY OFFERING THESE ADDITIONAL SERVICES, THE FIRM WAS SUSCEPTIBLE TO RISKS OF MONEY LAUNDERING AND OTHER ILLICIT FINANCIAL ACTIVITY ASSOCIATED WITH THESE SERVICES. DURING THE RELEVANT PERIOD, THE FIRM PRIMARILY USED A SYSTEM CALLED "MANTAS" FOR THE AUTOMATED MONITORING OF RETAIL BROKERAGE ACCOUNTS TO DETECT POTENTIAL MONEY LAUNDERING ACTIVITY RELATED TO MONEY MOVEMENTS. MANTAS ALERTED ON TRANSACTIONS THAT FIT WITHIN THE PARAMETERS OF SPECIFIC SCENARIOS SELECTED BY THE FIRM. THE FIRM HAD OTHER METHODS OF DETECTING SUSPICIOUS MOVEMENTS OF FUNDS IN ACCOUNTS, BUT THOSE METHODS WERE PRIMARILY MANUAL, OR ONLY ALERTED ON CERTAIN TYPES OF ACTIVITY. THE FIRM ALSO USED A SEPARATE AUTOMATED SURVEILLANCE SYSTEM TO CONDUCT TRADE SURVEILLANCE AND REFERRED TO THE ALERTS PRODUCED BY ITS ANTI-MONEY LAUNDERING (AML) DETECTION CHANNELS AS "EVENTS." THE FIRM ALSO USED A SYSTEM CALLED "EVENT PROCESSOR," OR "EP," WHICH GROUPED MANTAS EVENTS AND EVENTS PRODUCED BY OTHER FIRM DETECTION CHANNELS AND ASSIGNED POINTS TO THE EVENT GROUPS. FROM 2006 THROUGH MAY 2015, THE FIRM DID NOT APPLY ITS MANTAS AUTOMATED MONITORING TO CERTAIN ACCOUNTS. FROM ABOUT SEPTEMBER 2011 THROUGH JANUARY 2012, THE FIRM DID NOT INVESTIGATE MANTAS EVENTS THAT WERE NOT GROUPED WITH AN EVENT FROM ONE OF THE OTHER DETECTION CHANNELS, SUCH AS AN EMPLOYEE REFERRAL, A GOVERNMENT SUBPOENA, OR AN EVENT RELATED TO A WIRE TRANSFER OR ATM TRANSACTION THAT HAD BEEN ROUTED THROUGH A CONSUMER BANK BEFORE BEING DEBITED OR CREDITED TO A FIRM CUSTOMER'S RETAIL BROKERAGE ACCOUNT. EP USED A NUMBER OF SYSTEMS AND TECHNIQUES TO GROUP EVENTS ARISING FROM RELATED RETAIL BROKERAGE ACCOUNTS. HOWEVER, EP INADVERTENTLY DID NOT LINK RELATED ACCOUNTS THAT INVOLVED CUSTOMERS WHO HAD BOTH U.S. DOLLAR-DENOMINATED AND FOREIGN CURRENCY-DENOMINATED ACCOUNTS. ACCORDINGLY, CERTAIN EVENT GROUPS DID NOT MEET THE RISK-BASED THRESHOLD AND BECOME AN INVESTIGATION FOR FURTHER REVIEW AS RAPIDLY AS THEY OTHERWISE WOULD HAVE, IF AT ALL. THE DID NOT HAVE ADEQUATE POLICIES AND PROCEDURES FOR FILING WHAT WERE COMMONLY KNOWN AS "CONTINUING ACTIVITY" OR "ONGOING ACTIVITY" SUSPICIOUS ACTIVITY REPORTS (SARS). THE FIRM HAD AML POLICIES AND PROCEDURES THAT WERE NOT REASONABLY DESIGNED TO ACCOUNT FOR THE ADDITIONAL RISK ASSOCIATED WITH THE ADDITIONAL SERVICES OFFERED BY CERTAIN OF ITS RETAIL BROKERAGE ACCOUNTS. ONCE AN AML CASE WAS OPENED, THE PLATFORM USED BY THE FIRM'S AML INVESTIGATORS DURING PART OF THE RELEVANT PERIOD DID NOT PROVIDE SUFFICIENT VISIBILITY INTO TRANSACTIONS OCCURRING IN AN ACCOUNT, CAUSING THE INVESTIGATORS SOMETIMES UNDULY TO LIMIT THEIR REVIEW TO THE SPECIFIC EVENTS THAT TRIGGERED THE EVENT AND NOT TO REVIEW THE ACCOUNT MORE BROADLY TO DETERMINE WHETHER THE RISK ASSOCIATED WITH THAT EVENT WARRANTED ADDITIONAL INVESTIGATION OR REPORTING. BECAUSE OF THE DEFICIENCIES IN ITS AML POLICIES AND PROCEDURES THE FIRM FAILED TO ADEQUATELY MONITOR FOR, DETECT, AND REPORT CERTAIN SUSPICIOUS ACTIVITY RELATED TO TRANSACTIONS OR PATTERNS OF TRANSACTIONS IN ITS CUSTOMERS' ACCOUNTS. BY FAILING TO FILE SARS WITH FINANCIAL CRIMES ENFORCEMENT NETWORK (FINCEN) AS REQUIRED BY THE BSA WITH RESPECT TO CERTAIN OF ITS CUSTOMERS' ACTIVITY AS DESCRIBED ABOVE, THE FIRM WILLFULLY VIOLATED SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-8 THEREUNDER.
Sanction detail — filed text
THE FIRM WAS ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF EXCHANGE ACT SECTION 17(A) OR RULE 17A-8 PROMULGATED THEREUNDER, CENSURED, AND FINED $13,000,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) UNITED STATES SECURITIES AND EXCHANGE COMMISSION 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CEASE AND DESIST; CENSURE 3. Date Initiated (MM/DD/YYYY): 12/21/2017 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 3-18318 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: UNSPECIFIED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): SEC ADMIN RELEASE 34-82382; IA RELEASE 4831, DECEMBER 21, 2017: THE SECURITIES AND EXCHANGE COMMISSION (COMMISSION) DEEMS IT APPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TO SECTIONS 15(B), AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934 (EXCHANGE ACT) AND SECTION 203(E) OF THE INVESTMENT ADVISERS ACT OF 1940 (ADVISERS ACT) AGAINST THE FIRM. THE FIRM, IN ADDITION TO OFFERING ITS CUSTOMERS THE ABILITY TO BUY AND SELL SECURITIES, OFFERED ITS CUSTOMERS OTHER SERVICES IN BROKERAGE ACCOUNTS, SUCH AS ATM CASH DEPOSITS, WIRES, JOURNAL-ENTRY TRANSFERS, CHECK WRITING, ATM WITHDRAWALS, CASH ADVANCES, AND ACH TRANSFERS. BY OFFERING THESE ADDITIONAL SERVICES, THE FIRM WAS SUSCEPTIBLE TO RISKS OF MONEY LAUNDERING AND OTHER ILLICIT FINANCIAL ACTIVITY ASSOCIATED WITH THESE SERVICES. DURING THE RELEVANT PERIOD, THE FIRM PRIMARILY USED A SYSTEM CALLED "MANTAS" FOR THE AUTOMATED MONITORING OF RETAIL BROKERAGE ACCOUNTS TO DETECT POTENTIAL MONEY LAUNDERING ACTIVITY RELATED TO MONEY MOVEMENTS. MANTAS ALERTED ON TRANSACTIONS THAT FIT WITHIN THE PARAMETERS OF SPECIFIC SCENARIOS SELECTED BY THE FIRM. THE FIRM HAD OTHER METHODS OF DETECTING SUSPICIOUS MOVEMENTS OF FUNDS IN ACCOUNTS, BUT THOSE METHODS WERE PRIMARILY MANUAL, OR ONLY ALERTED ON CERTAIN TYPES OF ACTIVITY. THE FIRM ALSO USED A SEPARATE AUTOMATED SURVEILLANCE SYSTEM TO CONDUCT TRADE SURVEILLANCE AND REFERRED TO THE ALERTS PRODUCED BY ITS ANTI-MONEY LAUNDERING (AML) DETECTION CHANNELS AS "EVENTS." THE FIRM ALSO USED A SYSTEM CALLED "EVENT PROCESSOR," OR "EP," WHICH GROUPED MANTAS EVENTS AND EVENTS PRODUCED BY OTHER FIRM DETECTION CHANNELS AND ASSIGNED POINTS TO THE EVENT GROUPS. FROM 2006 THROUGH MAY 2015, THE FIRM DID NOT APPLY ITS MANTAS AUTOMATED MONITORING TO CERTAIN ACCOUNTS. FROM ABOUT SEPTEMBER 2011 THROUGH JANUARY 2012, THE FIRM DID NOT INVESTIGATE MANTAS EVENTS THAT WERE NOT GROUPED WITH AN EVENT FROM ONE OF THE OTHER DETECTION CHANNELS, SUCH AS AN EMPLOYEE REFERRAL, A GOVERNMENT SUBPOENA, OR AN EVENT RELATED TO A WIRE TRANSFER OR ATM TRANSACTION THAT HAD BEEN ROUTED THROUGH A CONSUMER BANK BEFORE BEING DEBITED OR CREDITED TO A FIRM CUSTOMER'S RETAIL BROKERAGE ACCOUNT. EP USED A NUMBER OF SYSTEMS AND TECHNIQUES TO GROUP EVENTS ARISING FROM RELATED RETAIL BROKERAGE ACCOUNTS. HOWEVER, EP INADVERTENTLY DID NOT LINK RELATED ACCOUNTS THAT INVOLVED CUSTOMERS WHO HAD BOTH U.S. DOLLAR-DENOMINATED AND FOREIGN CURRENCY-DENOMINATED ACCOUNTS. ACCORDINGLY, CERTAIN EVENT GROUPS DID NOT MEET THE RISK-BASED THRESHOLD AND BECOME AN INVESTIGATION FOR FURTHER REVIEW AS RAPIDLY AS THEY OTHERWISE WOULD HAVE, IF AT ALL. THE DID NOT HAVE ADEQUATE POLICIES AND PROCEDURES FOR FILING WHAT WERE COMMONLY KNOWN AS "CONTINUING ACTIVITY" OR "ONGOING ACTIVITY" SUSPICIOUS ACTIVITY REPORTS (SARS). THE FIRM HAD AML POLICIES AND PROCEDURES THAT WERE NOT REASONABLY DESIGNED TO ACCOUNT FOR THE ADDITIONAL RISK ASSOCIATED WITH THE ADDITIONAL SERVICES OFFERED BY CERTAIN OF ITS RETAIL BROKERAGE ACCOUNTS. ONCE AN AML CASE WAS OPENED, THE PLATFORM USED BY THE FIRM'S AML INVESTIGATORS DURING PART OF THE RELEVANT PERIOD DID NOT PROVIDE SUFFICIENT VISIBILITY INTO TRANSACTIONS OCCURRING IN AN ACCOUNT, CAUSING THE INVESTIGATORS SOMETIMES UNDULY TO LIMIT THEIR REVIEW TO THE SPECIFIC EVENTS THAT TRIGGERED THE EVENT AND NOT TO REVIEW THE ACCOUNT MORE BROADLY TO DETERMINE WHETHER THE RISK ASSOCIATED WITH THAT EVENT WARRANTED ADDITIONAL INVESTIGATION OR REPORTING. BECAUSE OF THE DEFICIENCIES IN ITS AML POLICIES AND PROCEDURES THE FIRM FAILED TO ADEQUATELY MONITOR FOR, DETECT, AND REPORT CERTAIN SUSPICIOUS ACTIVITY RELATED TO TRANSACTIONS OR PATTERNS OF TRANSACTIONS IN ITS CUSTOMERS' ACCOUNTS. BY FAILING TO FILE SARS WITH FINANCIAL CRIMES ENFORCEMENT NETWORK (FINCEN) AS REQUIRED BY THE BSA WITH RESPECT TO CERTAIN OF ITS CUSTOMERS' ACTIVITY AS DESCRIBED ABOVE, THE FIRM WILLFULLY VIOLATED SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-8 THEREUNDER. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Order 11. Resolution Date (MM/DD/YYYY): 12/21/2017 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 13,000,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF EXCHANGE ACT SECTION 17(A) OR RULE 17A-8 PROMULGATED THEREUNDER, CENSURED, AND FINED $13,000,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). IN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS, THE FIRM HAS SUBMITTED AN OFFER OF SETTLEMENT (THE OFFER) WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. SOLELY FOR THE PURPOSE OF THESE PROCEEDINGS AND ANY OTHER PROCEEDINGS BROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TO WHICH THE COMMISSION IS A PARTY, AND WITHOUT ADMITTING OR DENYING THE FINDINGS HEREIN, EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER HIM AND THE SUBJECT MATTER OF THESE PROCEEDINGS, WHICH ARE ADMITTED, THE FIRM CONSENTS TO THE ENTRY OF THIS ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS, PURSUANT TO SECTIONS 15(B) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934, AND SECTION 203(E) OF THE INVESTMENT ADVISERS ACT OF 1940, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER (ORDER). BY FAILING TO FILE SARS WITH RESPECT TO CERTAIN OF ITS CUSTOMERS' ACTIVITY AS DESCRIBED ABOVE, THE FIRM WILLFULLY VIOLATED SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-8 THEREUNDER. IN VIEW OF THE FOREGOING, THE COMMISSION DEEMS IT APPROPRIATE, IN THE PUBLIC INTEREST TO IMPOSE THE SANCTIONS AGREED TO IN THE FIRM'S OFFER. ACCORDINGLY, PURSUANT TO SECTIONS 15(B) AND 21C OF THE EXCHANGE ACT AND SECTION 203(F) OF THE ADVISERS ACT, IT IS HEREBY ORDERED THAT THE FIRM CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF EXCHANGE ACT SECTION 17(A) OR RULE 17A-8 PROMULGATED THEREUNDER; THE FIRM BE, AND HEREBY IS CENSURED; AND SHALL, WITHIN 14 DAYS OF THE ENTRY OF THIS ORDER, PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $13,000,000 TO THE SECURITIES AND EXCHANGE COMMISSION.
regulatory · block 76PDF pages 488–490
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 525,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
IN DETERMINING TO RESOLVE THIS MATTER IN THE MANNER SET FORTH HEREIN, AND IN DETERMINING THE APPROPRIATE MONETARY SANCTION, FINRA TOOK INTO CONSIDERATION THE FOLLOWING: (I) THAT THE FIRM SELF-REPORTED A SIGNIFICANT NUMBER OF THE VIOLATIONS AT ISSUE AFTER CONDUCTING AN INTERNAL INVESTIGATION; (II) PROVIDED ASSISTANCE TO FINRA IN ASSESSING THE NUMBER AND SCOPE OF VIOLATIONS; AND (III) PROMPTLY TOOK REMEDIAL ACTION TO CORRECT THE DEFICIENCIES THAT LED TO THE VIOLATIVE ACTIVITY.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THE FIRM FAILED TO REPORT, OR INACCURATELY REPORTED, CERTAIN SHORT INTEREST POSITIONS IN VIOLATION OF FINRA RULE 4560; (1) AS A RESULT OF AN UNDETECTED SYSTEM LOGIC ERROR IN THE FIRM'S INTERNAL SHORT INTEREST REPORT THAT DROPPED CERTAIN SYMBOLS INVOLVED IN RECENT CORPORATE ACTIONS THAT RESULTED IN MERGERS AND AN EXCHANGE OF SHARES; (2) DUE TO AN UNDETECTED CODING ERROR ON ITS INTERNAL SHORT INTEREST REPORT THAT OMITTED CERTAIN OVER-THE-COUNTER (OTC) FOREIGN SECURITIES (I.E., DULY LISTED SECURITIES) FROM ITS SHORT INTEREST SUBMISSION; AND (3) AS A RESULT OF A FAILURE TO UPDATE ITS INTERNAL PROGRAMMING LOGIC IN ITS MASTER SECURITY DATABASE USED TO DETERMINE IF A SECURITY WAS REPORTABLE, THAT CAUSED THE FIRM TO FAIL TO CAPTURE CERTAIN EQUITY PREFERRED SECURITIES INVOLVING CORPORATE ACTIONS. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH FINRA RULE 4560 IN VIOLATION OF NASD RULE 3010 (FOR CONDUCT PRIOR TO DECEMBER 1, 2014) AND FINRA RULE 3110 (FOR CONDUCT ON AND AFTER DECEMBER 1, 2014) AND FINRA RULE 2010.
Sanction detail — filed text
THE FIRM WAS CENSURED AND FINED $525,000,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 01/19/2018 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2014040400701 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Equity Listed (Common & Preferred Stock) Other Product Types: OTC FOREIGN SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THE FIRM FAILED TO REPORT, OR INACCURATELY REPORTED, CERTAIN SHORT INTEREST POSITIONS IN VIOLATION OF FINRA RULE 4560; (1) AS A RESULT OF AN UNDETECTED SYSTEM LOGIC ERROR IN THE FIRM'S INTERNAL SHORT INTEREST REPORT THAT DROPPED CERTAIN SYMBOLS INVOLVED IN RECENT CORPORATE ACTIONS THAT RESULTED IN MERGERS AND AN EXCHANGE OF SHARES; (2) DUE TO AN UNDETECTED CODING ERROR ON ITS INTERNAL SHORT INTEREST REPORT THAT OMITTED CERTAIN OVER-THE-COUNTER (OTC) FOREIGN SECURITIES (I.E., DULY LISTED SECURITIES) FROM ITS SHORT INTEREST SUBMISSION; AND (3) AS A RESULT OF A FAILURE TO UPDATE ITS INTERNAL PROGRAMMING LOGIC IN ITS MASTER SECURITY DATABASE USED TO DETERMINE IF A SECURITY WAS REPORTABLE, THAT CAUSED THE FIRM TO FAIL TO CAPTURE CERTAIN EQUITY PREFERRED SECURITIES INVOLVING CORPORATE ACTIONS. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH FINRA RULE 4560 IN VIOLATION OF NASD RULE 3010 (FOR CONDUCT PRIOR TO DECEMBER 1, 2014) AND FINRA RULE 3110 (FOR CONDUCT ON AND AFTER DECEMBER 1, 2014) AND FINRA RULE 2010. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 01/19/2018 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 525,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED AND FINED $525,000,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). IN DETERMINING TO RESOLVE THIS MATTER IN THE MANNER SET FORTH HEREIN, AND IN DETERMINING THE APPROPRIATE MONETARY SANCTION, FINRA TOOK INTO CONSIDERATION THE FOLLOWING: (I) THAT THE FIRM SELF-REPORTED A SIGNIFICANT NUMBER OF THE VIOLATIONS AT ISSUE AFTER CONDUCTING AN INTERNAL INVESTIGATION; (II) PROVIDED ASSISTANCE TO FINRA IN ASSESSING THE NUMBER AND SCOPE OF VIOLATIONS; AND (III) PROMPTLY TOOK REMEDIAL ACTION TO CORRECT THE DEFICIENCIES THAT LED TO THE VIOLATIVE ACTIVITY.
regulatory · block 77PDF pages 490–491
- Regulator name — filed text
- NEW YORK MERCANTILE EXCHANGE
- Monetary/Fine Amount — filed text
- $ 80,000.00
- How was matter resolved — filed text
- Decision
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE RULE VIOLATIONS UPON WHICH THE PENALTY WAS BASED, THE FIRM AGREED TO PAY A FINE IN THE AMOUNT OF $80,000.
Other filed details
Description of allegations — filed text
THE NEW YORK MERCANTILE EXCHANGE ("NYMEX") ALLEGED THAT (1) AN AUTOMATED ORDER ROUTING SYSTEM OPERATED BY THE FIRM MISROUTED AN UNSUPPORTED TYPE OF CUSTOMER ORDER TO GLOBEX AS A MARKET ORDER INSTEAD OF REJECTING THE ORDER, WHICH CAUSED A PRICE SPIKE (BUT DID NOT RESULT IN A TRADING HALT), AND (2) THE FIRM HAD INSUFFICIENT PROCEDURES OR INTERNAL CONTROLS IN PLACE TO REJECT THE UNSUPPORTED CUSTOMER ORDER TYPE. NYMEX FOUND THAT THE FIRM VIOLATED NYMEX RULES 432.Q AND 432.W.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE RULE VIOLATIONS UPON WHICH THE PENALTY WAS BASED, THE FIRM AGREED TO PAY A FINE IN THE AMOUNT OF $80,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
NEW YORK MERCANTILE EXCHANGE
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
3.
Date Initiated (MM/DD/YYYY):
01/30/2018
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
NYMEX 16-0404-BC
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Futures - Commodity
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE NEW YORK MERCANTILE EXCHANGE ("NYMEX") ALLEGED THAT (1) AN AUTOMATED ORDER ROUTING SYSTEM OPERATED BY THE FIRM MISROUTED AN
UNSUPPORTED TYPE OF CUSTOMER ORDER TO GLOBEX AS A MARKET ORDER INSTEAD OF REJECTING THE ORDER, WHICH CAUSED A PRICE SPIKE (BUT
DID NOT RESULT IN A TRADING HALT), AND (2) THE FIRM HAD INSUFFICIENT PROCEDURES OR INTERNAL CONTROLS IN PLACE TO REJECT THE
UNSUPPORTED CUSTOMER ORDER TYPE. NYMEX FOUND THAT THE FIRM VIOLATED NYMEX RULES 432.Q AND 432.W.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Decision
11. Resolution Date (MM/DD/YYYY):
02/01/2018
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 80,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE RULE VIOLATIONS UPON WHICH THE PENALTY WAS BASED, THE FIRM AGREED TO PAY A FINE IN THE
AMOUNT OF $80,000.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE RULE VIOLATIONS UPON WHICH THE PENALTY WAS BASED, THE FIRM AGREED TO PAY A FINE IN THE AMOUNT
OF $80,000.regulatory · block 78PDF pages 491–493
- Regulator name — filed text
- BATS BYX EXCHANGE, INC.
- Monetary/Fine Amount — filed text
- $ 57,500.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED AND FINED A TOTAL OF $135,000, OF WHICH $57,500 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE AREAS OUTLINED IN THE AWC.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THE FIRM FAILED TO TAKE RESONABLE STEPS TO ESTABLISH THAT THE INTER-MARKET SWEEP ORDERS IT ROUTED MET THE DEFINITIONAL REQUIREMENTS SET FORTH IN SEC RULE 600(B)(30) OF REGULATION NMS. THE FINDINGS STATED THAT THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SUPERVISORY SYSTEM THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE APPLICABLE SECURITIES LAWS AND REGULATIONS, AND BYX RULES, CONCERNING COMPLIANCE WITH RULE 611(C). SPECIFICALLY, THE FIRM'S SUPERVISORY SYSTEM DID NOT INCLUDE WRITTEN SUPERVISORY PROCEDURES ("WSPS") THAT INCLUDED AN IDENTIFICATION OF THE PERSON(S) RESPONSIBLE FOR SUPERVISION WITH RESPECT TO APPLICABLE RULES.
Sanction detail — filed text
THE FIRM WAS CENSURED AND FINED A TOTAL OF $135,000, OF WHICH $57,500 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE AREAS OUTLINED IN THE AWC.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
BATS BYX EXCHANGE, INC.
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE; UNDERTAKING
3.
Date Initiated (MM/DD/YYYY):
02/08/2018
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
2014041324302
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
UNSPECIFIED SECURITIES
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THE FIRM FAILED
TO TAKE RESONABLE STEPS TO ESTABLISH THAT THE INTER-MARKET SWEEP ORDERS IT ROUTED MET THE DEFINITIONAL REQUIREMENTS SET FORTH IN
SEC RULE 600(B)(30) OF REGULATION NMS. THE FINDINGS STATED THAT THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SUPERVISORY
SYSTEM THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE APPLICABLE SECURITIES LAWS AND REGULATIONS, AND BYX RULES,
CONCERNING COMPLIANCE WITH RULE 611(C). SPECIFICALLY, THE FIRM'S SUPERVISORY SYSTEM DID NOT INCLUDE WRITTEN SUPERVISORY
PROCEDURES ("WSPS") THAT INCLUDED AN IDENTIFICATION OF THE PERSON(S) RESPONSIBLE FOR SUPERVISION WITH RESPECT TO APPLICABLE
RULES.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
03/09/2018
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 57,500.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
UNDERTAKING
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE FIRM WAS CENSURED AND FINED A TOTAL OF $135,000, OF WHICH $57,500 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED
TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE AREAS OUTLINED IN THE AWC.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
THE FIRM WAS CENSURED AND FINED A TOTAL OF $135,000, OF WHICH $57,500 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO
REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE AREAS OUTLINED IN THE AWC.regulatory · block 79PDF pages 493–495
- Regulator name — filed text
- BATS BZX EXCHANGE, INC.
- Monetary/Fine Amount — filed text
- $ 77,500.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED AND FINED A TOTAL OF $135,000, OF WHICH $77,500 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE AREAS OUTLINED IN THE AWC.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THE FIRM FAILED TO TAKE RESONABLE STEPS TO ESTABLISH THAT THE INTER-MARKET SWEEP ORDERS IT ROUTED MET THE DEFINITIONAL REQUIREMENTS SET FORTH IN SEC RULE 600(B)(30) OF REGULATION NMS. THE FINDINGS STATED THAT THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SUPERVISORY SYSTEM THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE APPLICABLE SECURITIES LAWS AND REGULATIONS, AND BZX RULES, CONCERNING COMPLIANCE WITH RULE 611(C). SPECIFICALLY, THE FIRM'S SUPERVISORY SYSTEM DID NOT INCLUDE WRITTEN SUPERVISORY PROCEDURES ("WSPS") THAT INCLUDED AN IDENTIFICATION OF THE PERSON(S) RESPONSIBLE FOR SUPERVISION WITH RESPECT TO APPLICABLE RULES. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO REASONABLY AVOID DISPLAYING OR ENGAGING IN A PATTERN OR PRACTICE OF DISPLAYING QUOTATIONS THAT LOCKED OR CROSSED A PROTECTED QUOTATION, OR ANY MANUAL QUOTATIONS THAT LOCKED OR CROSSED A QUOTATION PREVIOUSLY DISSEMINATED PURSUANT TO AN EFFECTIVE NATIONAL MARKET SYSTEM PLAN.
Sanction detail — filed text
THE FIRM WAS CENSURED AND FINED A TOTAL OF $135,000, OF WHICH $77,500 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE AREAS OUTLINED IN THE AWC.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
BATS BZX EXCHANGE, INC.
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE; UNDERTAKING
3.
Date Initiated (MM/DD/YYYY):
02/08/2018
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
2014041324301
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
UNSPECIFIED SECURITIES
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THE FIRM FAILED
TO TAKE RESONABLE STEPS TO ESTABLISH THAT THE INTER-MARKET SWEEP ORDERS IT ROUTED MET THE DEFINITIONAL REQUIREMENTS SET FORTH IN
SEC RULE 600(B)(30) OF REGULATION NMS. THE FINDINGS STATED THAT THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SUPERVISORY
SYSTEM THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE APPLICABLE SECURITIES LAWS AND REGULATIONS, AND BZX RULES,
CONCERNING COMPLIANCE WITH RULE 611(C). SPECIFICALLY, THE FIRM'S SUPERVISORY SYSTEM DID NOT INCLUDE WRITTEN SUPERVISORY
PROCEDURES ("WSPS") THAT INCLUDED AN IDENTIFICATION OF THE PERSON(S) RESPONSIBLE FOR SUPERVISION WITH RESPECT TO APPLICABLE
RULES. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO REASONABLY AVOID DISPLAYING OR ENGAGING IN A PATTERN OR PRACTICE OF
DISPLAYING QUOTATIONS THAT LOCKED OR CROSSED A PROTECTED QUOTATION, OR ANY MANUAL QUOTATIONS THAT LOCKED OR CROSSED A
QUOTATION PREVIOUSLY DISSEMINATED PURSUANT TO AN EFFECTIVE NATIONAL MARKET SYSTEM PLAN.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
03/09/2018
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 77,500.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
UNDERTAKING
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE FIRM WAS CENSURED AND FINED A TOTAL OF $135,000, OF WHICH $77,500 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED
TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE AREAS OUTLINED IN THE AWC.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
THE FIRM WAS CENSURED AND FINED A TOTAL OF $135,000, OF WHICH $77,500 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO
REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE AREAS OUTLINED IN THE AWC.regulatory · block 80PDF pages 495–497
- Regulator name — filed text
- EUREX DEUTSCHLAND
- Monetary/Fine Amount — filed text
- $ 2,466.20
- How was matter resolved — filed text
- Decision
Action status / disposition — filed text
THE FIRM WAS ISSUED AN ADMINISTRATIVE FINE IN THE AMOUNT OF 2,000 EURO (APPROXIMATELY $2,466.20) AND WAS REQUIRED TO BEAR THE COST OF THE PROCEEDING IN THE AMOUNT OF 2,000 EURO (APPROXIMATELY $2,466.20). THE SANCTIONS COMMITTEE NOTED THAT THERE WAS NO FINANCIAL LOSS TO OTHER MARKET PARTICIPANTS NOR ANY LOSS IN TRUST FOR THE STAKEHOLDERS INVOLVED, AND THAT THE FIRM DID NOT GAIN ANY FINANCIAL ADVANTAGE.
Other filed details
Description of allegations — filed text
THE FIRM EXCEEDED THE ORDER TO TRADE RATIO MENTIONED IN SECTION 17B OF THE EUREX DEUTSCHLAND AND EUREX ZURICH EXCHANGE RULES BY 0.2873 AS PER THE LEAST TRADING DAY OF NOVEMBER 2017.
Sanction detail — filed text
THE FIRM WAS ISSUED AN ADMINISTRATIVE FINE IN THE AMOUNT OF 2,000 EURO (APPROXIMATELY $2,466.20) AND WAS REQUIRED TO BEAR THE COST OF THE PROCEEDING IN THE AMOUNT OF 2,000 EURO (APPROXIMATELY $2,466.20).
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) EUREX DEUTSCHLAND 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: COST OF THE PROCEEDING 3. Date Initiated (MM/DD/YYYY): 02/13/2018 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: CASE REF. 2018/03 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Futures - Financial Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE FIRM EXCEEDED THE ORDER TO TRADE RATIO MENTIONED IN SECTION 17B OF THE EUREX DEUTSCHLAND AND EUREX ZURICH EXCHANGE RULES BY 0.2873 AS PER THE LEAST TRADING DAY OF NOVEMBER 2017. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Decision 11. Resolution Date (MM/DD/YYYY): 02/13/2018 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 2,466.20 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: COST OF THE PROCEEDING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS ISSUED AN ADMINISTRATIVE FINE IN THE AMOUNT OF 2,000 EURO (APPROXIMATELY $2,466.20) AND WAS REQUIRED TO BEAR THE COST OF THE PROCEEDING IN THE AMOUNT OF 2,000 EURO (APPROXIMATELY $2,466.20). 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS ISSUED AN ADMINISTRATIVE FINE IN THE AMOUNT OF 2,000 EURO (APPROXIMATELY $2,466.20) AND WAS REQUIRED TO BEAR THE COST OF THE PROCEEDING IN THE AMOUNT OF 2,000 EURO (APPROXIMATELY $2,466.20). THE SANCTIONS COMMITTEE NOTED THAT THERE WAS NO FINANCIAL LOSS TO OTHER MARKET PARTICIPANTS NOR ANY LOSS IN TRUST FOR THE STAKEHOLDERS INVOLVED, AND THAT THE FIRM DID NOT GAIN ANY FINANCIAL ADVANTAGE.
regulatory · block 81PDF pages 497–499
- Regulator name — filed text
- STATE OF VERMONT DEPARTMENT OF FINANCIAL REGULATION
- Monetary/Fine Amount — filed text
- $ 80,000.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
MERRILL LYNCH ENTERED INTO A STIPULATION AND CONSENT AGREEMENT WITH THE VERMONT DEPARTMENT OF FINANCIAL REGULATION IN WHICH THE DEPARTMENT OF REGULATION WHICH STATED THAT MERRILL LYNCH FAILED TO SUPERVISE WITHIN THE MEANING OF 9 V.S.A. PARA. S412(D)(9) BY (A) FAILING TO ESCALATE FOR FURTHER SUPERVISORY REVIEW A REGISTERED REPRESENTATIVE'S EMAIL REQUESTING HIS CLIENT'S MERRILL LYNCH PASSWORD AND (B) FAILING TO SUPERVISE REASONABLY IN CONNECTION WITH THE REGISTERED REPRESENTATIVE'S UNAUTHORIZED SALE OF DESIGNATED SECURITIES. THE STIPULATION AND CONSENT AGREEMENT ALSO STATED THAT: (1) IT IS NOT AND SHALL NOT BE DEEMED TO BE, A FINAL ORDER OF ANY LAW OR REGULATION THAT PROHIBITS FRAUDULENT, MANIPULATIVE OR DECEPTIVE CONDUCT, AND (2) IT IS NOT INTENDED TO SUBJECT MERRILL LYNCH OR ANY OF ITS AFFILIATES TO ANY DISQUALIFICATION UNDER VERMONT LAW, OR RULES OR REGULATIONS THEREUNDER, FEDERAL SECURITIES LAWS, OR RULES OR REGULATIONS THEREUNDER, THE RULES AND REGULATIONS OF SELF-REGULATORY ORGANIZATIONS OR VARIOUS STATES OR U.S. TERRITORIES, INCLUDING ANY DISQUALIFICATION FROM RELYING UPON THE REGISTRATION EXEMPTIONS OR SAFE HARBOR PROVISIONS TO WHICH MERRILL LYNCH, OR ANY OF ITS AFFILIATES MAY BE SUBJECT. THE STIPULATION AND CONSENT AGREEMENT ALSO PROVIDED THAT NOTHING IN THE STIPULATION AND CONSENT AGREEMENT IS INTENDED IN ANY WAY TO SUBJECT MERRILL LYNCH OR ANY OF ITS AFFILIATES TO ANY STATUTORY DISQUALIFICATION BY FINRA IN ANY WAY.
Other filed details
Description of allegations — filed text
THE VERMONT DEPARTMENT OF FINANCIAL REGULATION ALLEGED THAT MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORTED ("MERRILL LYNCH") FAILED TO SUPERVISE A REGISTERED REPRESENTATIVE SUBJECT TO ITS SUPERVISION WITH RESPECT TO THE REPRESENTATIVE'S VIOLATIONS OF VERMONT SECURITIES RULES REGARDING A CUSTOMER'S INVESTMENT ADVISORY PROGRAM, WHICH INCLUDED IMPROPERLY EFFECTING TRANSACTIONS WITHOUT AUTHORITY, EXERCISING DISCRETIONARY POWER WITHOUT FIRST OBTAINING AUTHORITY, EFFECTING AN UNSUITABLE SALE, FAILING TO SEGREGATE SECURITIES HELD IN SAFEKEEPING, BY REQUESTING AND RECEIVING CUSTOMER ACCOUNT PASSWORDS, AND BY ACCESSING CUSTOMER ACCOUNTS WITH THE PASSWORDS.
Sanction detail — filed text
THE TOTAL AMOUNT OF PAYMENTS TO BE MADE BY MERRILL LYNCH PURSUANT TO THE STIPULATION AND CONSENT AGREEMENT WAS $120,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
STATE OF VERMONT DEPARTMENT OF FINANCIAL REGULATION
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
3.
Date Initiated (MM/DD/YYYY):
02/21/2018
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
DOCKET NO. 18-011-5
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
MERRILL LYNCH INVESTMENT ADVISORY PROGRAM
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE VERMONT DEPARTMENT OF FINANCIAL REGULATION ALLEGED THAT MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORTED ("MERRILL LYNCH")
FAILED TO SUPERVISE A REGISTERED REPRESENTATIVE SUBJECT TO ITS SUPERVISION WITH RESPECT TO THE REPRESENTATIVE'S VIOLATIONS OF
VERMONT SECURITIES RULES REGARDING A CUSTOMER'S INVESTMENT ADVISORY PROGRAM, WHICH INCLUDED IMPROPERLY EFFECTING
TRANSACTIONS WITHOUT AUTHORITY, EXERCISING DISCRETIONARY POWER WITHOUT FIRST OBTAINING AUTHORITY, EFFECTING AN UNSUITABLE SALE,
FAILING TO SEGREGATE SECURITIES HELD IN SAFEKEEPING, BY REQUESTING AND RECEIVING CUSTOMER ACCOUNT PASSWORDS, AND BY ACCESSING
CUSTOMER ACCOUNTS WITH THE PASSWORDS.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Consent
11. Resolution Date (MM/DD/YYYY):
02/21/2018
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 80,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
MERRILL LYNCH ALSO AGREED TO MAKE THE FOLLOWING ADDITIONAL PAYMENTS: (1) A REIMBURSEMENT TO THE DEPARTMENT OF FINANCIAL
REGULATION OF $30,000 FOR INVESTIGATIVE AND OTHER EXPENSES; AND (2) A $10,000 PAYMENT TO THE VERMONT DEPARTMENT OF FINANCIAL
REGULATION FINANCIAL SERVICES EDUCATION & TRAINING SPECIAL FUND.
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE TOTAL AMOUNT OF PAYMENTS TO BE MADE BY MERRILL LYNCH PURSUANT TO THE STIPULATION AND CONSENT AGREEMENT WAS $120,000.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
MERRILL LYNCH ENTERED INTO A STIPULATION AND CONSENT AGREEMENT WITH THE VERMONT DEPARTMENT OF FINANCIAL REGULATION IN WHICH
THE DEPARTMENT OF REGULATION WHICH STATED THAT MERRILL LYNCH FAILED TO SUPERVISE WITHIN THE MEANING OF 9 V.S.A. PARA. S412(D)(9) BY
(A) FAILING TO ESCALATE FOR FURTHER SUPERVISORY REVIEW A REGISTERED REPRESENTATIVE'S EMAIL REQUESTING HIS CLIENT'S MERRILL LYNCH
PASSWORD AND (B) FAILING TO SUPERVISE REASONABLY IN CONNECTION WITH THE REGISTERED REPRESENTATIVE'S UNAUTHORIZED SALE OF
DESIGNATED SECURITIES. THE STIPULATION AND CONSENT AGREEMENT ALSO STATED THAT: (1) IT IS NOT AND SHALL NOT BE DEEMED TO BE, A FINAL
ORDER OF ANY LAW OR REGULATION THAT PROHIBITS FRAUDULENT, MANIPULATIVE OR DECEPTIVE CONDUCT, AND (2) IT IS NOT INTENDED TO
SUBJECT MERRILL LYNCH OR ANY OF ITS AFFILIATES TO ANY DISQUALIFICATION UNDER VERMONT LAW, OR RULES OR REGULATIONS THEREUNDER,
FEDERAL SECURITIES LAWS, OR RULES OR REGULATIONS THEREUNDER, THE RULES AND REGULATIONS OF SELF-REGULATORY ORGANIZATIONS OR
VARIOUS STATES OR U.S. TERRITORIES, INCLUDING ANY DISQUALIFICATION FROM RELYING UPON THE REGISTRATION EXEMPTIONS OR SAFE HARBOR
PROVISIONS TO WHICH MERRILL LYNCH, OR ANY OF ITS AFFILIATES MAY BE SUBJECT. THE STIPULATION AND CONSENT AGREEMENT ALSO PROVIDED
THAT NOTHING IN THE STIPULATION AND CONSENT AGREEMENT IS INTENDED IN ANY WAY TO SUBJECT MERRILL LYNCH OR ANY OF ITS AFFILIATES TO
ANY STATUTORY DISQUALIFICATION BY FINRA IN ANY WAY.regulatory · block 82PDF pages 499–501
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 7,500.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED AND FINED $7,500.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO PUBLISH IMMEDIATELY A BID OR OFFER THAT REFLECTED THE FULL SIZE OF 3,182 CUSTOMER LIMIT ORDERS FOR OVER-THE-COUNTER (OTC) EQUITY SECURITIES HELD BY THE FIRM THAT WERE AT A PRICE THAT WOULD HAVE IMPROVED THE BID OR OFFER OF THE FIRM IN SUCH SECURITIES DUE TO A PROGRAMMING ERROR IN WHICH THE FIRM WAS USING OUTDATED QUOTATION PRICE AND DISPLAY MATRICES.
Sanction detail — filed text
THE FIRM WAS CENSURED AND FINED $7,500.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 03/06/2018 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2016049858101 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Equity - OTC Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO PUBLISH IMMEDIATELY A BID OR OFFER THAT REFLECTED THE FULL SIZE OF 3,182 CUSTOMER LIMIT ORDERS FOR OVER-THE-COUNTER (OTC) EQUITY SECURITIES HELD BY THE FIRM THAT WERE AT A PRICE THAT WOULD HAVE IMPROVED THE BID OR OFFER OF THE FIRM IN SUCH SECURITIES DUE TO A PROGRAMMING ERROR IN WHICH THE FIRM WAS USING OUTDATED QUOTATION PRICE AND DISPLAY MATRICES. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 03/06/2018 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 7,500.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED AND FINED $7,500. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED AND FINED $7,500.
regulatory · block 83PDF pages 501–503
- Regulator name — filed text
- UNITED STATES SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 1,250,000.00
- How was matter resolved — filed text
- Other
Action status / disposition — filed text
MERRILL LYNCH SUBMITTED AN OFFER OF SETTLEMENT, WHICH THE SEC DETERMINED TO ACCEPT. SOLELY FOR THE PURPOSES OF THIS PROCEEDING AND ANY OTHER PROCEEDINGS BROUGHT BY OR ON BEHALF OF THE SEC, OR TO WHICH THE SEC IS A PARTY, AND WITHOUT ADMITTING OR DENYING THE FINDINGS IN THE ADMINISTRATIVE ORDER, EXCEPT AS TO THE SEC'S JURISDICTION OVER IT AND THE SUBJECT MATTER OF THE PROCEEDING, WHICH WERE ADMITTED, MERRILL LYNCH CONSENTED TO THE ENTRY OF THE ADMINISTRATIVE ORDER, WHICH CONTAINED A FINDING THAT MERRILL LYNCH WILLFULLY VIOLATED SECTIONS 5(A)(AND 5(C) OF THE SECURITIES ACT. THE SEC ORDERED THAT MERRILL LYNCH IS CENSURED AND SHALL CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 5(A) AND 5(C) OF THE SECURITIES ACT. MERRILL LYNCH WAS ALSO ORDERED TO PAY DISGORGEMENT OF $127,545 ALONG WITH PREJUDGMENT INTEREST OF $27,340 AND PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $1.25 MILLION.
Other filed details
Description of allegations — filed text
ON MARCH 8, 2018, THE U.S. SECURITIES AND EXCHANGE COMMISSION ("SEC") ISSUED AN ADMINISTRATIVE ORDER AGAINST MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH") FINDING THAT MERRILL LYNCH, FROM JANUARY 24, 2011 TO AUGUST 18, 2011, VIOLATED THE REGISTRATION PROVISIONS OF THE FEDERAL SECURITIES LAWS BY EFFECTING UNREGISTERED SALES OF ALMOST 3 MILLION SHARES OF LONGTOP FINANCIAL TECHNOLOGIES LIMITED'S SECURITIES FOR A CUSTOMER THAT MAINTAINED AN ACCOUNT AT A MERRILL LYNCH BRANCH OFFICE IN SINGAPORE. IN 2013, MERRILL LYNCH SOLD ITS SINGAPORE BRANCH OFFICE AND THE BRANCH EMPLOYEES HANDLING THE ACCOUNT CEASED THEIR ASSOCIATION WITH MERRILL LYNCH. MERRILL LYNCH CONSENTED TO THE ISSUANCE OF THE ADMINISTRATIVE ORDER WITHOUT ADMITTING OR DENYING THE SEC'S FINDINGS. THE SEC FOUND THAT, ALTHOUGH IN ADVANCE OF THE SALES MERRILL LYNCH REVIEWED LONGTOP'S PUBLIC FILINGS, GATHERED INFORMATION FROM THE SINGAPORE BRANCH CONCERNING LONGTOP AND THE ACCOUNT, HAD DISCUSSIONS WITH LONGTOP'S U.S.-BASED OUTSIDE COUNSEL WHO WAS NOT ON A LIST OF KNOWN SECURITIES LAW OFFENDERS, AND CONSULTED WITH IN-HOUSE COUNSEL, MERRILL LYNCH DID NOT PERFORM A REASONABLE INQUIRY INTO THE FACTS SURROUNDING THE PROPOSED SALES TO DETERMINE IF THERE WAS AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933 ("SECURITIES ACT"), AND AS A RESULT MERRILL LYNCH WAS NOT ENTITLED TO RELY ON THE BROKERS' TRANSACTION EXEMPTION IN SECTION 4(A)(4) OF THE SECURITIES ACT. THE SEC FOUND THAT THE SALES THROUGH THE ACCOUNT, GENERATED APPROXIMATELY $38 MILLION IN PROCEEDS FOR THE BENEFIT OF LONGTOP AND ITS AFFILIATES. MERRILL LYNCH WIRED THE PROCEEDS FROM THE NOMINEE ACCOUNT TO A HONG KONG BANK ACCOUNT IN THE NAME OF A DIFFERENT ENTITY THAT WAS CONTROLLED BY LONGTOP MANAGEMENT. UNKNOWN TO MERRILL LYNCH, THE MAJORITY OF THE PROCEEDS WERE THEN TRANSFERRED FROM THE HONG KONG BANK ACCOUNT TO ONE OR MORE AFFILIATES OF LONGTOP. MERRILL LYNCH RECEIVED OVER $127,000 IN COMMISSIONS AND FEES DURING THE RELEVANT PERIOD. AS A RESULT, THE SEC FOUND THAT MERRILL LYNCH WILLFULLY VIOLATED SECTIONS 5(A) AND 5(C) OF THE SECURITIES ACT.
Sanction detail — filed text
MERRILL LYNCH IS CENSURED AND ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 5(A) AND 5(C) OF THE SECURITIES ACT. MERRILL LYNCH IS ALSO ORDERED TO PAY DISGORGEMENT OF $127,545 ALONG WITH PREJUDGMENT INTEREST OF $27,340, AND PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $1.25 MILLION.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CEASE AND DESIST;CENSURE;DEGORGEMENT;PREJUDGMENT INTEREST
3.
Date Initiated (MM/DD/YYYY):
03/08/2018
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
3-18392
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
AMERICAN DEPOSITARY SHARES
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
ON MARCH 8, 2018, THE U.S. SECURITIES AND EXCHANGE COMMISSION ("SEC") ISSUED AN ADMINISTRATIVE ORDER AGAINST MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED ("MERRILL LYNCH") FINDING THAT MERRILL LYNCH, FROM JANUARY 24, 2011 TO AUGUST 18, 2011, VIOLATED THE
REGISTRATION PROVISIONS OF THE FEDERAL SECURITIES LAWS BY EFFECTING UNREGISTERED SALES OF ALMOST 3 MILLION SHARES OF LONGTOP
FINANCIAL TECHNOLOGIES LIMITED'S SECURITIES FOR A CUSTOMER THAT MAINTAINED AN ACCOUNT AT A MERRILL LYNCH BRANCH OFFICE IN
SINGAPORE. IN 2013, MERRILL LYNCH SOLD ITS SINGAPORE BRANCH OFFICE AND THE BRANCH EMPLOYEES HANDLING THE ACCOUNT CEASED THEIR
ASSOCIATION WITH MERRILL LYNCH. MERRILL LYNCH CONSENTED TO THE ISSUANCE OF THE ADMINISTRATIVE ORDER WITHOUT ADMITTING OR
DENYING THE SEC'S FINDINGS. THE SEC FOUND THAT, ALTHOUGH IN ADVANCE OF THE SALES MERRILL LYNCH REVIEWED LONGTOP'S PUBLIC FILINGS,
GATHERED INFORMATION FROM THE SINGAPORE BRANCH CONCERNING LONGTOP AND THE ACCOUNT, HAD DISCUSSIONS WITH LONGTOP'S U.S.-BASED
OUTSIDE COUNSEL WHO WAS NOT ON A LIST OF KNOWN SECURITIES LAW OFFENDERS, AND CONSULTED WITH IN-HOUSE COUNSEL, MERRILL LYNCH
DID NOT PERFORM A REASONABLE INQUIRY INTO THE FACTS SURROUNDING THE PROPOSED SALES TO DETERMINE IF THERE WAS AN AVAILABLE
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933 ("SECURITIES ACT"), AND AS A RESULT MERRILL LYNCH WAS NOT ENTITLED TO
RELY ON THE BROKERS' TRANSACTION EXEMPTION IN SECTION 4(A)(4) OF THE SECURITIES ACT. THE SEC FOUND THAT THE SALES THROUGH THE
ACCOUNT, GENERATED APPROXIMATELY $38 MILLION IN PROCEEDS FOR THE BENEFIT OF LONGTOP AND ITS AFFILIATES. MERRILL LYNCH WIRED THE
PROCEEDS FROM THE NOMINEE ACCOUNT TO A HONG KONG BANK ACCOUNT IN THE NAME OF A DIFFERENT ENTITY THAT WAS CONTROLLED BY
LONGTOP MANAGEMENT. UNKNOWN TO MERRILL LYNCH, THE MAJORITY OF THE PROCEEDS WERE THEN TRANSFERRED FROM THE HONG KONG BANK
ACCOUNT TO ONE OR MORE AFFILIATES OF LONGTOP. MERRILL LYNCH RECEIVED OVER $127,000 IN COMMISSIONS AND FEES DURING THE RELEVANT
PERIOD. AS A RESULT, THE SEC FOUND THAT MERRILL LYNCH WILLFULLY VIOLATED SECTIONS 5(A) AND 5(C) OF THE SECURITIES ACT.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Other
11. Resolution Date (MM/DD/YYYY):
03/08/2018
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 1,250,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
PREJUDGMENT INTEREST
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
MERRILL LYNCH IS CENSURED AND ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE
VIOLATIONS OF SECTIONS 5(A) AND 5(C) OF THE SECURITIES ACT. MERRILL LYNCH IS ALSO ORDERED TO PAY DISGORGEMENT OF $127,545
ALONG WITH PREJUDGMENT INTEREST OF $27,340, AND PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $1.25 MILLION.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
MERRILL LYNCH SUBMITTED AN OFFER OF SETTLEMENT, WHICH THE SEC DETERMINED TO ACCEPT. SOLELY FOR THE PURPOSES OF THIS PROCEEDING
AND ANY OTHER PROCEEDINGS BROUGHT BY OR ON BEHALF OF THE SEC, OR TO WHICH THE SEC IS A PARTY, AND WITHOUT ADMITTING OR DENYING
THE FINDINGS IN THE ADMINISTRATIVE ORDER, EXCEPT AS TO THE SEC'S JURISDICTION OVER IT AND THE SUBJECT MATTER OF THE PROCEEDING,
WHICH WERE ADMITTED, MERRILL LYNCH CONSENTED TO THE ENTRY OF THE ADMINISTRATIVE ORDER, WHICH CONTAINED A FINDING THAT MERRILL
LYNCH WILLFULLY VIOLATED SECTIONS 5(A)(AND 5(C) OF THE SECURITIES ACT. THE SEC ORDERED THAT MERRILL LYNCH IS CENSURED AND SHALL
CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 5(A) AND 5(C) OF THE SECURITIES
ACT. MERRILL LYNCH WAS ALSO ORDERED TO PAY DISGORGEMENT OF $127,545 ALONG WITH PREJUDGMENT INTEREST OF $27,340 AND PAY A CIVIL
MONEY PENALTY IN THE AMOUNT OF $1.25 MILLION.regulatory · block 84BANK OF AMERICA CORPORATIONPDF pages 503–505
- Advisory affiliate name — filed text
- BANK OF AMERICA CORPORATION
- Regulator name — filed text
- ATTORNEY GENERAL OF THE STATE OF NEW YORK INVESTOR PROTECTION BUREAU
- Monetary/Fine Amount — filed text
- $ 42,000,000.00
- How was matter resolved — filed text
- Settled
Action status / disposition — filed text
IN CONNECTION WITH THE AGREEMENT, BOFAML AGREED (1) NOT TO ENGAGE, OR ATTEMPT TO ENGAGE, IN CONDUCT IN VIOLATION OF ANY APPLICABLE LAWS, INCLUDING BUT NOT LIMITED TO THE MARTIN ACT AND EXECUTIVE LAW § 63(12); (2) TO PAY A PENALTY IN THE AMOUNT OF $42,000,000; AND (3) PROVIDE THE NYAG A SUMMARY OF THE REVIEW OF ITS ELECTRONIC TRADING POLICIES AND PROCEDURES.
Other filed details
Description of allegations — filed text
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK INVESTOR PROTECTION BUREAU ALLEGED THAT BANK OF AMERICA CORPORATION (BAC) AND THE FIRM (1) CONCEALED FROM ITS INSTITUTIONAL CLIENTS THAT ORDERS WERE ROUTED TO AND EXECUTED BY "ELECTRONIC LIQUIDITY PROVIDERS," (2) MISSTATED THE COMPOSITION OF ORDERS AND TRADES IN ITS DARK POOL, AND (3) DID NOT ACCURATELY DESCRIBE ITS USE OF A PROPRIETARY "VENUE RANKING" ANALYSIS, IN VIOLATION OF THE MARTIN ACT AND EXECUTIVE LAW § 63(12).
Sanction detail — filed text
IN CONNECTION WITH THE AGREEMENT, BOFAML AGREED (1) NOT TO ENGAGE, OR ATTEMPT TO ENGAGE, IN CONDUCT IN VIOLATION OF ANY APPLICABLE LAWS, INCLUDING BUT NOT LIMITED TO THE MARTIN ACT AND EXECUTIVE LAW § 63(12); (2) TO PAY A PENALTY IN THE AMOUNT OF $42,000,000; AND (3) PROVIDE THE NYAG A SUMMARY OF THE REVIEW OF ITS ELECTRONIC TRADING POLICIES AND PROCEDURES.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: This advisory affiliate is a Firm an Individual Registered: Yes No Name: BANK OF AMERICA CORPORATION (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) ATTORNEY GENERAL OF THE STATE OF NEW YORK INVESTOR PROTECTION BUREAU 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: AGREEMENT NOT TO ENGAGE, OR ATTEMPT TO ENGAGE, IN CONDUCT IN VIOLATION OF ANY APPLICABLE LAWS, AGREEMENT TO PROVIDE CERTAIN MATERIALS TO THE NYAG 3. Date Initiated (MM/DD/YYYY): 03/22/2018 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: AGREEMENT NO. 18-025 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Equity Listed (Common & Preferred Stock) Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE ATTORNEY GENERAL OF THE STATE OF NEW YORK INVESTOR PROTECTION BUREAU ALLEGED THAT BANK OF AMERICA CORPORATION (BAC) AND THE FIRM (1) CONCEALED FROM ITS INSTITUTIONAL CLIENTS THAT ORDERS WERE ROUTED TO AND EXECUTED BY "ELECTRONIC LIQUIDITY PROVIDERS," (2) MISSTATED THE COMPOSITION OF ORDERS AND TRADES IN ITS DARK POOL, AND (3) DID NOT ACCURATELY DESCRIBE ITS USE OF A PROPRIETARY "VENUE RANKING" ANALYSIS, IN VIOLATION OF THE MARTIN ACT AND EXECUTIVE LAW § 63(12). 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Settled 11. Resolution Date (MM/DD/YYYY): 03/22/2018 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 42,000,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: AGREEMENT NOT TO ENGAGE, OR ATTEMPT TO ENGAGE, IN CONDUCT IN VIOLATION OF ANY APPLICABLE LAWS, AGREEMENT TO PROVIDE CERTAIN MATERIALS TO THE NYAG Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: IN CONNECTION WITH THE AGREEMENT, BOFAML AGREED (1) NOT TO ENGAGE, OR ATTEMPT TO ENGAGE, IN CONDUCT IN VIOLATION OF ANY APPLICABLE LAWS, INCLUDING BUT NOT LIMITED TO THE MARTIN ACT AND EXECUTIVE LAW § 63(12); (2) TO PAY A PENALTY IN THE AMOUNT OF $42,000,000; AND (3) PROVIDE THE NYAG A SUMMARY OF THE REVIEW OF ITS ELECTRONIC TRADING POLICIES AND PROCEDURES. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). IN CONNECTION WITH THE AGREEMENT, BOFAML AGREED (1) NOT TO ENGAGE, OR ATTEMPT TO ENGAGE, IN CONDUCT IN VIOLATION OF ANY APPLICABLE LAWS, INCLUDING BUT NOT LIMITED TO THE MARTIN ACT AND EXECUTIVE LAW § 63(12); (2) TO PAY A PENALTY IN THE AMOUNT OF $42,000,000; AND (3) PROVIDE THE NYAG A SUMMARY OF THE REVIEW OF ITS ELECTRONIC TRADING POLICIES AND PROCEDURES.
regulatory · block 85PDF pages 505–507
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 115,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED AND FINED $115,000 AND REQUIRED TO COMPLY WITH AN UNDERTAKING TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO ESTABLISH, MAINTAIN, AND ENFORCE WRITTEN POLICIES AND PROCEDURES THAT WERE REASONABLY DESIGNED TO PREVENT TRADE-THROUGHS OF PROTECTED QUOTATIONS IN NMS STOCKS THAT DO NOT FALL WITHIN ANY APPLICABLE EXCEPTION, AND IF RELYING ON AN EXCEPTION, ARE REASONABLY DESIGNED TO ASSURE COMPLIANCE WITH THE TERMS OF THE EXCEPTION. THE FINDINGS STATED THAT THE FIRM FAILED TO TAKE REASONABLE STEPS TO ESTABLISH THAT THE INTERMARKET SWEEP ORDERS IT ROUTED MET THE DEFINITIONAL REQUIREMENTS SET FORTH IN RULE 600(B)(30) OF REGULATION NMS. THE FIRM EXPERIENCED FOUR SYSTEMS ISSUES THAT GAVE RISE TO CERTAIN OF THE ABOVE VIOLATIONS. IN CONNECTION WITH ONE OF THE SYSTEMS ISSUES, THE FIRM BECAME AWARE IN JUNE 2007 THAT ITS SMART ORDER ROUTER WOULD LIMIT THE TOTAL SHARE QUANTITY OF ITS REGULATION NMS SWEEP OBLIGATION TO THE SHARE QUANTITY OF THE RELEVANT UNDERLYING CUSTOMER FACILITATION TRADE. THUS, IN CASES WHERE THE QUANTITY OF SUPERIOR PROTECTED QUOTATIONS IN THE MARKET WERE GREATER THAN THE QUANTITY OF SHARES IN THE UNDERLYING CUSTOMER FACILITATION TRADE, THE FIRM'S SMART ORDER ROUTER MAY NOT HAVE ROUTED INTERMARKET SWEEP ORDERS TO ALL SUPERIOR PROTECTED QUOTATIONS IN THE MARKET OR TO THE FULL SIZE OF ALL SUPERIOR PROTECTED QUOTATIONS IN THE MARKET RESULTING IN TRADE-THROUGHS OF THOSE PROTECTED QUOTATIONS. THE FIRM FAILED TO RECOGNIZE THE SCOPE OF THE ISSUE AND ASSIGNED IT A LOW PRIORITY FOR LATER REMEDIATION. THE FIRM DID NOT REMEDIATE THE ISSUE UNTIL MARCH 2014. THE FIRM ALSO REPORTED CERTAIN TRADES WITH TRADE THROUGH EXEMPT MODIFIERS TO THE FINRA TRADE REPORTING FACILITY WHEN, IN FACT, THE TRANSACTIONS WERE NOT EXEMPT.
Sanction detail — filed text
THE FIRM WAS CENSURED AND FINED $115,000 AND REQUIRED TO COMPLY WITH AN UNDERTAKING TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 04/06/2018 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2013037652201 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: UNSPECIFIED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO ESTABLISH, MAINTAIN, AND ENFORCE WRITTEN POLICIES AND PROCEDURES THAT WERE REASONABLY DESIGNED TO PREVENT TRADE-THROUGHS OF PROTECTED QUOTATIONS IN NMS STOCKS THAT DO NOT FALL WITHIN ANY APPLICABLE EXCEPTION, AND IF RELYING ON AN EXCEPTION, ARE REASONABLY DESIGNED TO ASSURE COMPLIANCE WITH THE TERMS OF THE EXCEPTION. THE FINDINGS STATED THAT THE FIRM FAILED TO TAKE REASONABLE STEPS TO ESTABLISH THAT THE INTERMARKET SWEEP ORDERS IT ROUTED MET THE DEFINITIONAL REQUIREMENTS SET FORTH IN RULE 600(B)(30) OF REGULATION NMS. THE FIRM EXPERIENCED FOUR SYSTEMS ISSUES THAT GAVE RISE TO CERTAIN OF THE ABOVE VIOLATIONS. IN CONNECTION WITH ONE OF THE SYSTEMS ISSUES, THE FIRM BECAME AWARE IN JUNE 2007 THAT ITS SMART ORDER ROUTER WOULD LIMIT THE TOTAL SHARE QUANTITY OF ITS REGULATION NMS SWEEP OBLIGATION TO THE SHARE QUANTITY OF THE RELEVANT UNDERLYING CUSTOMER FACILITATION TRADE. THUS, IN CASES WHERE THE QUANTITY OF SUPERIOR PROTECTED QUOTATIONS IN THE MARKET WERE GREATER THAN THE QUANTITY OF SHARES IN THE UNDERLYING CUSTOMER FACILITATION TRADE, THE FIRM'S SMART ORDER ROUTER MAY NOT HAVE ROUTED INTERMARKET SWEEP ORDERS TO ALL SUPERIOR PROTECTED QUOTATIONS IN THE MARKET OR TO THE FULL SIZE OF ALL SUPERIOR PROTECTED QUOTATIONS IN THE MARKET RESULTING IN TRADE-THROUGHS OF THOSE PROTECTED QUOTATIONS. THE FIRM FAILED TO RECOGNIZE THE SCOPE OF THE ISSUE AND ASSIGNED IT A LOW PRIORITY FOR LATER REMEDIATION. THE FIRM DID NOT REMEDIATE THE ISSUE UNTIL MARCH 2014. THE FIRM ALSO REPORTED CERTAIN TRADES WITH TRADE THROUGH EXEMPT MODIFIERS TO THE FINRA TRADE REPORTING FACILITY WHEN, IN FACT, THE TRANSACTIONS WERE NOT EXEMPT. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 04/06/2018 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 115,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED AND FINED $115,000 AND REQUIRED TO COMPLY WITH AN UNDERTAKING TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED AND FINED $115,000 AND REQUIRED TO COMPLY WITH AN UNDERTAKING TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES.
regulatory · block 86BANK OF AMERICA CORPORATIONPDF pages 507–508
- Advisory affiliate name — filed text
- BANK OF AMERICA CORPORATION
- Regulator name — filed text
- BUNDESANSTALT FUR FINANZDIENSTLEISTUNGSAUFSICHT (BAFIN)
- Monetary/Fine Amount — filed text
- $ 1,635,872.00
- How was matter resolved — filed text
- Other
Action status / disposition — filed text
THE BAFIN IMPOSED A FINE ON THE FIRM IN THE AMOUNT OF EUR 1,340,000/USD 1,635,872 AND A FEE FOR COSTS OF THE PROCEEDING IN THE AMOUNT OF EUR 7,500/USD 9,156. THE EFFECTIVE DATE OF THE NOTICE IS TWO WEEKS AFTER THE DELIVERY OF THE NOTICE - DURING WHICH TIME THE FIRM CAN APPEAL THE NOTICE. THE FIRM DID NOT APPEAL THE NOTICE AND THE NOTICE BECAME EFFECTIVE ON MAY 14, 2018.
Other filed details
Description of allegations — filed text
THE BAFIN ALLEGED THAT NECESSARY AND REASONABLE SUPERVISORY AND ORGANIZATIONAL MEASURES WHICH COULD HAVE ENSURED THE CORRECT AND COMPLETE SUBMISSION OF VOTING RIGHTS NOTIFICATIONS WITHIN THE TIME STIPULATED WERE NOT TAKEN ON TIME OR TO THE ADEQUATE EXTENT BY THE COMPANY CONCERNED, WHICH LED TO VIOLATIONS OF VOTING RIGHTS NOTIFICATION REQUIREMENTS.
Sanction detail — filed text
THE BAFIN IMPOSED A FINE ON THE FIRM IN THE AMOUNT OF EUR 1,340,000/USD 1,635,872 AND A FEE FOR COSTS OF THE PROCEEDING IN THE AMOUNT OF EUR 7,500/USD 9,156. THE EFFECTIVE DATE OF THE NOTICE IS TWO WEEKS AFTER THE DELIVERY OF THE NOTICE - DURING WHICH TIME THE FIRM CAN APPEAL THE NOTICE. THE FIRM DID NOT APPEAL THE NOTICE AND THE NOTICE BECAME EFFECTIVE ON MAY 14, 2018.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: This advisory affiliate is a Firm an Individual Registered: Yes No Name: BANK OF AMERICA CORPORATION (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) BUNDESANSTALT FUR FINANZDIENSTLEISTUNGSAUFSICHT (BAFIN) 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: FEE FOR COSTS OF PROCEEDING 3. Date Initiated (MM/DD/YYYY): 04/23/2018 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: NA 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE BAFIN ALLEGED THAT NECESSARY AND REASONABLE SUPERVISORY AND ORGANIZATIONAL MEASURES WHICH COULD HAVE ENSURED THE CORRECT AND COMPLETE SUBMISSION OF VOTING RIGHTS NOTIFICATIONS WITHIN THE TIME STIPULATED WERE NOT TAKEN ON TIME OR TO THE ADEQUATE EXTENT BY THE COMPANY CONCERNED, WHICH LED TO VIOLATIONS OF VOTING RIGHTS NOTIFICATION REQUIREMENTS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Other 11. Resolution Date (MM/DD/YYYY): 05/14/2018 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 1,635,872.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: THE BAFIN IMPOSED A FINE ON THE FIRM IN THE AMOUNT OF EUR 1,340,000/USD 1,635,872 AND A FEE FOR COSTS OF THE PROCEEDING IN THE AMOUNT OF EUR 7,500/USD 9,156. Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE BAFIN IMPOSED A FINE ON THE FIRM IN THE AMOUNT OF EUR 1,340,000/USD 1,635,872 AND A FEE FOR COSTS OF THE PROCEEDING IN THE AMOUNT OF EUR 7,500/USD 9,156. THE EFFECTIVE DATE OF THE NOTICE IS TWO WEEKS AFTER THE DELIVERY OF THE NOTICE - DURING WHICH TIME THE FIRM CAN APPEAL THE NOTICE. THE FIRM DID NOT APPEAL THE NOTICE AND THE NOTICE BECAME EFFECTIVE ON MAY 14, 2018. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE BAFIN IMPOSED A FINE ON THE FIRM IN THE AMOUNT OF EUR 1,340,000/USD 1,635,872 AND A FEE FOR COSTS OF THE PROCEEDING IN THE AMOUNT OF EUR 7,500/USD 9,156. THE EFFECTIVE DATE OF THE NOTICE IS TWO WEEKS AFTER THE DELIVERY OF THE NOTICE - DURING WHICH TIME THE FIRM CAN APPEAL THE NOTICE. THE FIRM DID NOT APPEAL THE NOTICE AND THE NOTICE BECAME EFFECTIVE ON MAY 14, 2018.
regulatory · block 87PDF pages 508–510
- Regulator name — filed text
- STATE OF MAINE OFFICE OF SECURITIES
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
MERRILL LYNCH AGREED TO THE ENTRY OF THE ORDER WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAW OF MAINE SECURITIES. THE ORDER ALSO CONTAINED THE FOLLOWING LANGUAGE WITH RESPECT TO ANY OF THE "BAD ACTOR" DISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS: "PURSUANT TO 17 C.F.R. §230.506(D)(2)(II) NOTHING STATED IN THIS CONSENT ORDER GIVES RISE TO A DISQUALIFICATION UNDER 17 C.F.R. §230.506(D)(1) OR ANY OTHER STATUTORY OR REGULATORY DISQUALIFICATION PROVISION."
Other filed details
Description of allegations — filed text
ON MAY 25, 2018, THE STATE OF MAINE OFFICE OF SECURITIES ("MAINE SECURITIES") ISSUED A CONSENT ORDER ("ORDER") IN CONNECTION WITH MERRILL LYNCH'S ACTIVITIES AS DISTRIBUTION AGENT OF MAINE'S NEXTGEN 529 COLLEGE INVESTMENT PLAN-CLIENT SELECT SERIES ("NEXTGEN") AND THE FEES ASSOCIATED WITH THE DIFFERENT CLASSES OF UNITS AVAILABLE TO NEXTGEN INVESTORS (CLASS A UNITS AND CLASS C UNITS). THE ORDER CITED MERRILL LYNCH FOR (I) HAVING VIOLATED 32 M.R.S. 16412(4)(M) AND MAINE OFFICE OF SECURITIES RULE CHAPTER 504 SECTION 8(3) WHEN ITS REPRESENTATIVES RECOMMENDED CLASS C UNITS OF NEXTGEN TO INVESTORS FOR WHOM CLASS A UNITS LIKELY WOULD HAVE BEEN LESS EXPENSIVE OVER THE INVESTORS' INVESTMENT HORIZON GIVEN THE AGE OF THE INVESTORS' BENEFICIARIES, AND (II) HAVING VIOLATED 32 M.R.S. 16412(4)(I) AND MAINE OFFICE OF SECURITIES RULE CHAPTER 504 SECTION 7(1) BY FAILING TO (A) REASONABLY SUPERVISE ITS AGENTS, AND (B) ESTABLISH AND MAINTAIN POLICIES AND PROCEDURES, AND EFFECTIVE MONITORING OR OTHER CONTROLS REASONABLY DESIGNED TO ENSURE THAT ITS AGENTS PROPERLY CONSIDERED THE BENEFICIARIES' AGE, INVESTMENT TIME HORIZON, AND RELATIVE EXPENSE OF CLASS A AND CLASS C UNITS WHEN REPRESENTATIVES RECOMMENDED NEXTGEN.
Sanction detail — filed text
THE ORDER STATED THAT MERRILL LYNCH HAS UNDERTAKEN TO MAKE FINANCIAL REMEDIATION PAYMENTS, WHICH ARE ESTIMATED TO TOTAL APPROXIMATELY $18.9 MILLION, TO ALL MAINE AND NON-MAINE RESIDENTS WHO PURCHASED NEXTGEN CLASS C UNITS DURING A SPECIFIED PERIOD ("ELIGIBLE INVESTORS") THROUGH MERRILL LYNCH AS DISTRIBUTION AGENT PURSUANT TO A VOLUNTARY WRITTEN PLAN SUBMITTED TO THE MAINE SECURITIES ADMINISTRATOR. PURSUANT TO THE WRITTEN PLAN, MERRILL LYNCH WILL PAY ELIGIBLE INVESTORS THE DIFFERENCE IN THE COST OF HOLDING CLASS C SHARES RELATIVE TO CLASS A UNITS, PLUS INTEREST THROUGH THE PAYMENT DATE. MERRILL LYNCH WILL ALSO FILE A REPORT WITH THE MAINE SECURITIES ADMINISTRATOR DETAILING THE PAYMENTS MADE TO ELIGIBLE INVESTORS. MERRILL LYNCH HAS ALSO AGREED TO MAKE A PAYMENT IN THE AMOUNT OF $500,000 TO THE MAINE SECURITIES INVESTOR EDUCATION AND TRAINING FUND. FINALLY, THE ORDER STATED THAT, IN RECOGNITION OF MERRILL LYNCH'S COOPERATION WITH MAINE SECURITIES, INCLUDING ITS DEVELOPMENT OF A VOLUNTARY PLAN OF REMEDIATION, THE MAINE SECURITIES ADMINISTRATOR HAS AGREED TO FORGO THE IMPOSITION OF A CIVIL PENALTY.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
STATE OF MAINE OFFICE OF SECURITIES
2.
Principal Sanction:
Restitution
Other Sanctions:
UNDERTAKING
3.
Date Initiated (MM/DD/YYYY):
05/25/2018
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
15-11252-CON
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
ON MAY 25, 2018, THE STATE OF MAINE OFFICE OF SECURITIES ("MAINE SECURITIES") ISSUED A CONSENT ORDER ("ORDER") IN CONNECTION WITH
MERRILL LYNCH'S ACTIVITIES AS DISTRIBUTION AGENT OF MAINE'S NEXTGEN 529 COLLEGE INVESTMENT PLAN-CLIENT SELECT SERIES ("NEXTGEN")
AND THE FEES ASSOCIATED WITH THE DIFFERENT CLASSES OF UNITS AVAILABLE TO NEXTGEN INVESTORS (CLASS A UNITS AND CLASS C UNITS). THE
ORDER CITED MERRILL LYNCH FOR (I) HAVING VIOLATED 32 M.R.S. 16412(4)(M) AND MAINE OFFICE OF SECURITIES RULE CHAPTER 504 SECTION 8(3)
WHEN ITS REPRESENTATIVES RECOMMENDED CLASS C UNITS OF NEXTGEN TO INVESTORS FOR WHOM CLASS A UNITS LIKELY WOULD HAVE BEEN LESS
EXPENSIVE OVER THE INVESTORS' INVESTMENT HORIZON GIVEN THE AGE OF THE INVESTORS' BENEFICIARIES, AND (II) HAVING VIOLATED 32 M.R.S.
16412(4)(I) AND MAINE OFFICE OF SECURITIES RULE CHAPTER 504 SECTION 7(1) BY FAILING TO (A) REASONABLY SUPERVISE ITS AGENTS, AND (B)
ESTABLISH AND MAINTAIN POLICIES AND PROCEDURES, AND EFFECTIVE MONITORING OR OTHER CONTROLS REASONABLY DESIGNED TO ENSURE THAT
ITS AGENTS PROPERLY CONSIDERED THE BENEFICIARIES' AGE, INVESTMENT TIME HORIZON, AND RELATIVE EXPENSE OF CLASS A AND CLASS C UNITS
WHEN REPRESENTATIVES RECOMMENDED NEXTGEN.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Consent
11. Resolution Date (MM/DD/YYYY):
05/25/2018
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
COMPLY WITH UNDERTAKING REGARDING VOLUNTARY WRITTEN PLAN OF REMEDIATION
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE ORDER STATED THAT MERRILL LYNCH HAS UNDERTAKEN TO MAKE FINANCIAL REMEDIATION PAYMENTS, WHICH ARE ESTIMATED TO TOTAL
APPROXIMATELY $18.9 MILLION, TO ALL MAINE AND NON-MAINE RESIDENTS WHO PURCHASED NEXTGEN CLASS C UNITS DURING A SPECIFIED
PERIOD ("ELIGIBLE INVESTORS") THROUGH MERRILL LYNCH AS DISTRIBUTION AGENT PURSUANT TO A VOLUNTARY WRITTEN PLAN SUBMITTED TO
THE MAINE SECURITIES ADMINISTRATOR. PURSUANT TO THE WRITTEN PLAN, MERRILL LYNCH WILL PAY ELIGIBLE INVESTORS THE DIFFERENCE IN
THE COST OF HOLDING CLASS C SHARES RELATIVE TO CLASS A UNITS, PLUS INTEREST THROUGH THE PAYMENT DATE. MERRILL LYNCH WILL ALSO
FILE A REPORT WITH THE MAINE SECURITIES ADMINISTRATOR DETAILING THE PAYMENTS MADE TO ELIGIBLE INVESTORS. MERRILL LYNCH HAS
ALSO AGREED TO MAKE A PAYMENT IN THE AMOUNT OF $500,000 TO THE MAINE SECURITIES INVESTOR EDUCATION AND TRAINING FUND.
FINALLY, THE ORDER STATED THAT, IN RECOGNITION OF MERRILL LYNCH'S COOPERATION WITH MAINE SECURITIES, INCLUDING ITS
DEVELOPMENT OF A VOLUNTARY PLAN OF REMEDIATION, THE MAINE SECURITIES ADMINISTRATOR HAS AGREED TO FORGO THE IMPOSITION OF A
CIVIL PENALTY.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
MERRILL LYNCH AGREED TO THE ENTRY OF THE ORDER WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAW OF
MAINE SECURITIES. THE ORDER ALSO CONTAINED THE FOLLOWING LANGUAGE WITH RESPECT TO ANY OF THE "BAD ACTOR" DISQUALIFICATIONS
UNDER THE FEDERAL SECURITIES LAWS: "PURSUANT TO 17 C.F.R. §230.506(D)(2)(II) NOTHING STATED IN THIS CONSENT ORDER GIVES RISE TO A
DISQUALIFICATION UNDER 17 C.F.R. §230.506(D)(1) OR ANY OTHER STATUTORY OR REGULATORY DISQUALIFICATION PROVISION."regulatory · block 88PDF pages 510–512
- Regulator name — filed text
- UNITED STATES SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 5,267,720.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
THE FIRM WAS CENSURED, ORDERED TO PAY DISGORGEMENT AND PRE-JUDGMENT INTEREST TOTALING $10,535,441, AND TO PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $5,267,720. IN DETERMINING TO ACCEPT THE FIRM'S OFFER, THE COMMISSION CONSIDERED REMEDIAL STEPS THAT MERRILL UNDERTOOK. MERRILL ALSO AGREED TO COOPERATE FULLY WITH THE COMMISSION IN ANY AND ALL INVESTIGATIONS, LITIGATIONS, OR OTHER PROCEEDINGS RELATING TO OR ARISING FROM THE MATTERS DESCRIBED IN THE ORDER.
Other filed details
Description of allegations — filed text
ON JUNE 12, 2018, THE SECURITIES AND EXCHANGE COMMISSION (SEC) ISSUED AN ADMINISTRATIVE PROCEEDING AGAINST THE FIRM FINDING THAT THE FIRM FAILED REASONABLY TO SUPERVISE FIRM PERSONNEL SO AS TO PREVENT AND DETECT VIOLATIONS OF ANTIFRAUD PROVISIONS OF THE FEDERAL SECURITIES LAWS IN CONNECTION WITH THE FIRM'S SECONDARY MARKET PURCHASES AND SALES OF CERTAIN BONDS KNOWN AS NON- AGENCY RESIDENTIAL MORTGAGE-BACKED SECURITIES (NON-AGENCY RMBS). THE TRADING THAT IS THE SUBJECT OF THE ORDER TOOK PLACE FROM JUNE 2009 THROUGH DECEMBER 2012 (RELEVANT PERIOD) AND INVOLVED INTRA-DAY PURCHASES AND SALES OF NON-AGENCY RMBS FROM AND TO THE FIRM'S INSTITUTIONAL CUSTOMERS. DURING THE RELEVANT PERIOD, FIRM PERSONNEL WHO PURCHASED AND SOLD NON-AGENCY RMBS MADE FALSE OR MISLEADING STATEMENTS, DIRECTLY AND INDIRECTLY, TO THE FIRM'S INSTITUTIONAL CUSTOMERS AND/OR CHARGED THE FIRM'S INSTITUTIONAL CUSTOMERS UNDISCLOSED EXCESSIVE MARK-UPS. BY ENGAGING IN THIS CONDUCT, THE FIRM'S PERSONNEL ACTED KNOWINGLY OR RECKLESSLY. THE FIRM HAD BOTH POLICIES THAT PROHIBITED FALSE OR MISLEADING STATEMENTS AND THE MEANS TO MONITOR COMMUNICATIONS FOR SUCH STATEMENTS. THE FIRM, HOWEVER, FAILED REASONABLY TO IMPLEMENT PROCEDURES TO MONITOR FOR THE TYPES OF FALSE OR MISLEADING STATEMENTS THAT WERE THE SUBJECT OF THE ORDER. THE FIRM ALSO HAD POLICIES THAT PROHIBITED EXCESSIVE MARK-UPS AND PROCEDURES TO MONITOR FOR EXCESSIVE MARK-UPS ON TRANSACTIONS IN NON-AGENCY RMBS, BUT THE POLICIES AND PROCEDURES WERE NOT REASONABLY DESIGNED AND IMPLEMENTED. DUE TO THESE DEFICIENCIES, THE FIRM FAILED REASONABLY TO PERFORM A MEANINGFUL REVIEW OF POTENTIALLY EXCESSIVE MARK-UPS ON CERTAIN NON-AGENCY RMBS TRANSACTIONS, INCLUDING TRANSACTIONS THAT WERE THE SUBJECT OF THE ORDER. UNDER THE CIRCUMSTANCES DESCRIBED ABOVE, THE FIRM FAILED REASONABLY TO SUPERVISE FOR VIOLATIONS OF ANTIFRAUD PROVISIONS OF THE FEDERAL SECURITIES LAWS WITHIN THE MEANING OF SECTION 15(B)(4)(E) OF THE EXCHANGE ACT.
Sanction detail — filed text
THE FIRM WAS CENSURED, ORDERED TO PAY DISGORGEMENT AND PRE-JUDGMENT INTEREST TOTALING $10,535,441, AND TO PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $5,267,720.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) UNITED STATES SECURITIES AND EXCHANGE COMMISSION 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; DISGORGEMENT; PREJUDGMENT INTEREST 3. Date Initiated (MM/DD/YYYY): 06/12/2018 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 3-18538 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: RESIDENTIAL MORTGAGE-BACKED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): ON JUNE 12, 2018, THE SECURITIES AND EXCHANGE COMMISSION (SEC) ISSUED AN ADMINISTRATIVE PROCEEDING AGAINST THE FIRM FINDING THAT THE FIRM FAILED REASONABLY TO SUPERVISE FIRM PERSONNEL SO AS TO PREVENT AND DETECT VIOLATIONS OF ANTIFRAUD PROVISIONS OF THE FEDERAL SECURITIES LAWS IN CONNECTION WITH THE FIRM'S SECONDARY MARKET PURCHASES AND SALES OF CERTAIN BONDS KNOWN AS NON- AGENCY RESIDENTIAL MORTGAGE-BACKED SECURITIES (NON-AGENCY RMBS). THE TRADING THAT IS THE SUBJECT OF THE ORDER TOOK PLACE FROM JUNE 2009 THROUGH DECEMBER 2012 (RELEVANT PERIOD) AND INVOLVED INTRA-DAY PURCHASES AND SALES OF NON-AGENCY RMBS FROM AND TO THE FIRM'S INSTITUTIONAL CUSTOMERS. DURING THE RELEVANT PERIOD, FIRM PERSONNEL WHO PURCHASED AND SOLD NON-AGENCY RMBS MADE FALSE OR MISLEADING STATEMENTS, DIRECTLY AND INDIRECTLY, TO THE FIRM'S INSTITUTIONAL CUSTOMERS AND/OR CHARGED THE FIRM'S INSTITUTIONAL CUSTOMERS UNDISCLOSED EXCESSIVE MARK-UPS. BY ENGAGING IN THIS CONDUCT, THE FIRM'S PERSONNEL ACTED KNOWINGLY OR RECKLESSLY. THE FIRM HAD BOTH POLICIES THAT PROHIBITED FALSE OR MISLEADING STATEMENTS AND THE MEANS TO MONITOR COMMUNICATIONS FOR SUCH STATEMENTS. THE FIRM, HOWEVER, FAILED REASONABLY TO IMPLEMENT PROCEDURES TO MONITOR FOR THE TYPES OF FALSE OR MISLEADING STATEMENTS THAT WERE THE SUBJECT OF THE ORDER. THE FIRM ALSO HAD POLICIES THAT PROHIBITED EXCESSIVE MARK-UPS AND PROCEDURES TO MONITOR FOR EXCESSIVE MARK-UPS ON TRANSACTIONS IN NON-AGENCY RMBS, BUT THE POLICIES AND PROCEDURES WERE NOT REASONABLY DESIGNED AND IMPLEMENTED. DUE TO THESE DEFICIENCIES, THE FIRM FAILED REASONABLY TO PERFORM A MEANINGFUL REVIEW OF POTENTIALLY EXCESSIVE MARK-UPS ON CERTAIN NON-AGENCY RMBS TRANSACTIONS, INCLUDING TRANSACTIONS THAT WERE THE SUBJECT OF THE ORDER. UNDER THE CIRCUMSTANCES DESCRIBED ABOVE, THE FIRM FAILED REASONABLY TO SUPERVISE FOR VIOLATIONS OF ANTIFRAUD PROVISIONS OF THE FEDERAL SECURITIES LAWS WITHIN THE MEANING OF SECTION 15(B)(4)(E) OF THE EXCHANGE ACT. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Order 11. Resolution Date (MM/DD/YYYY): 06/12/2018 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 5,267,720.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: PREJUDGMENT INTEREST Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED, ORDERED TO PAY DISGORGEMENT AND PRE-JUDGMENT INTEREST TOTALING $10,535,441, AND TO PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $5,267,720. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED, ORDERED TO PAY DISGORGEMENT AND PRE-JUDGMENT INTEREST TOTALING $10,535,441, AND TO PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $5,267,720. IN DETERMINING TO ACCEPT THE FIRM'S OFFER, THE COMMISSION CONSIDERED REMEDIAL STEPS THAT MERRILL UNDERTOOK. MERRILL ALSO AGREED TO COOPERATE FULLY WITH THE COMMISSION IN ANY AND ALL INVESTIGATIONS, LITIGATIONS, OR OTHER PROCEEDINGS RELATING TO OR ARISING FROM THE MATTERS DESCRIBED IN THE ORDER.
regulatory · block 89PDF pages 512–514
- Regulator name — filed text
- UNITED STATES SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 42,000,000.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
THE FIRM WAS CENSURED, ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 17(A)(2) AND 17(A)(3) OF THE SECURITIES ACT AND ORDERED TO PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $42,000,000.
Other filed details
Description of allegations — filed text
ON JUNE 19, 2018, THE SECURITIES AND EXCHANGE COMMISSION (SEC) ISSUED AN ADMINISTRATIVE PROCEEDING AGAINST THE FIRM CONCERNING THE FIRM'S SUSTAINED EFFORTS TO HIDE ITS PRACTICE OF ROUTING CERTAIN INSTITUTIONAL CUSTOMER ORDERS TO OTHER BROKER-DEALERS (EXTERNAL LIQUIDITY PROVIDERS, ELECTRONIC LIQUIDITY PARTNERS, OR ELPS), INCLUDING PROPRIETARY TRADING FIRMS AND WHOLESALE MARKET MAKERS, FOR EXECUTION. THE FIRM CONFIGURED A NUMBER OF INTERNAL AND EXTERNAL TRADE REPORTING SYSTEMS SO THAT INSTITUTIONAL CUSTOMER ORDERS THAT WERE EXECUTED AT ELPS INSTEAD APPEARED TO INSTITUTIONAL CUSTOMERS TO HAVE BEEN EXECUTED AT THE FIRM. THE FIRM SIMILARLY MISREPORTED ELP EXECUTIONS IN REPORTS PROVIDED TO INSTITUTIONAL CUSTOMERS AND IN BILLING INVOICES. WHEN RESPONDING TO INSTITUTIONAL CUSTOMER QUESTIONNAIRES AND IN OTHER COMMUNICATIONS, THE FIRM SPECIFICALLY OMITTED ELPS FROM LISTS OF VENUES TO WHICH INSTITUTIONAL CUSTOMER ORDERS WERE ROUTED. THE FIRM REFERRED TO THIS PRACTICE INTERNALLY AS "MASKING." THE FIRM MASKED THE ELP EXECUTIONS OF THE FIRM'S "DIRECT STRATEGY ACCESS" OR "DSA" INSTITUTIONAL CUSTOMERS. THESE INSTITUTIONAL CUSTOMERS TYPICALLY WERE FINANCIAL INSTITUTIONS SUCH AS ASSET MANAGERS, MUTUAL FUND INVESTMENT ADVISERS, AND PUBLIC PENSION FUNDS. THE FIRM FALSELY REPORTED TO INSTITUTIONAL CUSTOMERS THAT ALL OF THESE TRANSACTIONS OCCURRED AT THE FIRM. AS A RESULT OF THE FIRM'S MASKING PRACTICE, INSTITUTIONAL CUSTOMERS DID NOT KNOW THAT SOME OF THEIR ORDERS WERE EXECUTED AT ELPS AND OTHER ORDERS WERE EXPOSED TO ELPS BEFORE BEING EXECUTED AT OTHER VENUES. AS A RESULT, THESE INSTITUTIONAL CUSTOMERS' ORDERS RECEIVED UNWANTED EXECUTIONS AGAINST ENTITIES WITH WHICH THEY BELIEVED THEIR ORDERS WOULD NOT INTERACT. BECAUSE OF MASKING, THESE INSTITUTIONAL CUSTOMERS DID NOT KNOW THAT THE FIRM VIOLATED THEIR INSTRUCTIONS. THE FIRM STOPPED MASKING IN MAY 2013 ON A PROSPECTIVE BASIS, BUT DID NOT INFORM INSTITUTIONAL CUSTOMERS THAT IT PREVIOUSLY HAD MASKED THEIR ELP EXECUTIONS. TO THE CONTRARY, THE FIRM CONFIGURED SYSTEMS SO THAT FUTURE REPORTS TO INSTITUTIONAL CUSTOMERS, TYPICALLY PROVIDED ON A MONTHLY OR QUARTERLY BASIS, CONTINUED TO MASK ELP EXECUTIONS. THE FIRM'S STATEMENTS AND OMISSIONS IN COMMUNICATIONS TO INSTITUTIONAL CUSTOMERS THROUGH RESPONSES TO QUESTIONNAIRES, MESSAGES REGARDING TRADE EXECUTIONS, REPORTS, AND BILLING STATEMENTS WERE MATERIALLY MISLEADING CONCERNING ORDERS THAT THE FIRM SENT TO ELPS AND ORDERS THAT THE ELPS EXECUTED. THE FIRM'S EFFORTS TO MASK THE CORRECT TRADING VENUES, INCLUDING BY ALTERING TRADE REPORTING PROGRAMS, OPERATED AS A FRAUD OR DECEIT UPON ITS INSTITUTIONAL CUSTOMERS. AS A RESULT, THE FIRM WILLFULLY VIOLATED SECTIONS 17(A)(2) AND 17(A)(3) OF THE SECURITIES ACT.
Sanction detail — filed text
THE FIRM WAS CENSURED, ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 17(A)(2) AND 17(A)(3) OF THE SECURITIES ACT AND ORDERED TO PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $42,000,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) UNITED STATES SECURITIES AND EXCHANGE COMMISSION 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CEASE AND DESIST; CENSURE 3. Date Initiated (MM/DD/YYYY): 06/19/2018 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 3-18549 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: UNSPECIFIED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): ON JUNE 19, 2018, THE SECURITIES AND EXCHANGE COMMISSION (SEC) ISSUED AN ADMINISTRATIVE PROCEEDING AGAINST THE FIRM CONCERNING THE FIRM'S SUSTAINED EFFORTS TO HIDE ITS PRACTICE OF ROUTING CERTAIN INSTITUTIONAL CUSTOMER ORDERS TO OTHER BROKER-DEALERS (EXTERNAL LIQUIDITY PROVIDERS, ELECTRONIC LIQUIDITY PARTNERS, OR ELPS), INCLUDING PROPRIETARY TRADING FIRMS AND WHOLESALE MARKET MAKERS, FOR EXECUTION. THE FIRM CONFIGURED A NUMBER OF INTERNAL AND EXTERNAL TRADE REPORTING SYSTEMS SO THAT INSTITUTIONAL CUSTOMER ORDERS THAT WERE EXECUTED AT ELPS INSTEAD APPEARED TO INSTITUTIONAL CUSTOMERS TO HAVE BEEN EXECUTED AT THE FIRM. THE FIRM SIMILARLY MISREPORTED ELP EXECUTIONS IN REPORTS PROVIDED TO INSTITUTIONAL CUSTOMERS AND IN BILLING INVOICES. WHEN RESPONDING TO INSTITUTIONAL CUSTOMER QUESTIONNAIRES AND IN OTHER COMMUNICATIONS, THE FIRM SPECIFICALLY OMITTED ELPS FROM LISTS OF VENUES TO WHICH INSTITUTIONAL CUSTOMER ORDERS WERE ROUTED. THE FIRM REFERRED TO THIS PRACTICE INTERNALLY AS "MASKING." THE FIRM MASKED THE ELP EXECUTIONS OF THE FIRM'S "DIRECT STRATEGY ACCESS" OR "DSA" INSTITUTIONAL CUSTOMERS. THESE INSTITUTIONAL CUSTOMERS TYPICALLY WERE FINANCIAL INSTITUTIONS SUCH AS ASSET MANAGERS, MUTUAL FUND INVESTMENT ADVISERS, AND PUBLIC PENSION FUNDS. THE FIRM FALSELY REPORTED TO INSTITUTIONAL CUSTOMERS THAT ALL OF THESE TRANSACTIONS OCCURRED AT THE FIRM. AS A RESULT OF THE FIRM'S MASKING PRACTICE, INSTITUTIONAL CUSTOMERS DID NOT KNOW THAT SOME OF THEIR ORDERS WERE EXECUTED AT ELPS AND OTHER ORDERS WERE EXPOSED TO ELPS BEFORE BEING EXECUTED AT OTHER VENUES. AS A RESULT, THESE INSTITUTIONAL CUSTOMERS' ORDERS RECEIVED UNWANTED EXECUTIONS AGAINST ENTITIES WITH WHICH THEY BELIEVED THEIR ORDERS WOULD NOT INTERACT. BECAUSE OF MASKING, THESE INSTITUTIONAL CUSTOMERS DID NOT KNOW THAT THE FIRM VIOLATED THEIR INSTRUCTIONS. THE FIRM STOPPED MASKING IN MAY 2013 ON A PROSPECTIVE BASIS, BUT DID NOT INFORM INSTITUTIONAL CUSTOMERS THAT IT PREVIOUSLY HAD MASKED THEIR ELP EXECUTIONS. TO THE CONTRARY, THE FIRM CONFIGURED SYSTEMS SO THAT FUTURE REPORTS TO INSTITUTIONAL CUSTOMERS, TYPICALLY PROVIDED ON A MONTHLY OR QUARTERLY BASIS, CONTINUED TO MASK ELP EXECUTIONS. THE FIRM'S STATEMENTS AND OMISSIONS IN COMMUNICATIONS TO INSTITUTIONAL CUSTOMERS THROUGH RESPONSES TO QUESTIONNAIRES, MESSAGES REGARDING TRADE EXECUTIONS, REPORTS, AND BILLING STATEMENTS WERE MATERIALLY MISLEADING CONCERNING ORDERS THAT THE FIRM SENT TO ELPS AND ORDERS THAT THE ELPS EXECUTED. THE FIRM'S EFFORTS TO MASK THE CORRECT TRADING VENUES, INCLUDING BY ALTERING TRADE REPORTING PROGRAMS, OPERATED AS A FRAUD OR DECEIT UPON ITS INSTITUTIONAL CUSTOMERS. AS A RESULT, THE FIRM WILLFULLY VIOLATED SECTIONS 17(A)(2) AND 17(A)(3) OF THE SECURITIES ACT. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Order 11. Resolution Date (MM/DD/YYYY): 06/19/2018 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 42,000,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED, ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 17(A)(2) AND 17(A)(3) OF THE SECURITIES ACT AND ORDERED TO PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $42,000,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED, ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 17(A)(2) AND 17(A)(3) OF THE SECURITIES ACT AND ORDERED TO PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $42,000,000.
regulatory · block 90PDF pages 515–516
- Regulator name — filed text
- UNITED STATES SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 4,032,871.89
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
SOLELY FOR THE PURPOSE OF SETTLING THESE PROCEEDINGS, MERRILL LYNCH CONSENTED TO THE ORDER WITHOUT ADMITTING OR DENYING THE FINDINGS IN THE ORDER, EXCEPT AS TO THE SEC'S JURISDICTION OVER IT AND THE SUBJECT MATTER. THE ALLEGATIONS, DISPOSITIONS, FINDINGS AND SANCTIONS OF THE ORDER ARE DESCRIBED ABOVE IN ITEMS 7 AND 12.
Other filed details
Description of allegations — filed text
ON AUGUST 20, 2018, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH") ENTERED INTO A SETTLEMENT WITH THE SECURITIES AND EXCHANGE COMMISSION ("SEC") RESULTING IN THE SEC ISSUING AN ORDER. MERRILL LYNCH CONSENTED TO THE ENTRY OF THE ORDER (THE "ORDER") THAT FINDS THAT IT FAILED TO DISCLOSE THAT THE PORTFOLIO MANAGER EVALUATION PROCESS EMPLOYED IN CONNECTION WITH A JANUARY 2013 TERMINATION RECOMMENDATION FOR OVER FIFTEEN HUNDRED OF ITS RETAIL ADVISORY ACCOUNTS WAS EXPOSED TO A CONFLICT OF INTEREST INVOLVING OTHER BUSINESS INTERESTS. THE ORDER FINDS THAT THIS UNDISCLOSED CONFLICT OF INTEREST IN MERRILL LYNCH'S DECISION-MAKING PROCESS VIOLATED ADVISERS ACT SECTION 206(2). MERRILL LYNCH ALSO VIOLATED ADVISERS ACT SECTION 206(4) AND RULE 206(4)-7 PROMULGATED THEREUNDER.
Sanction detail — filed text
THE ORDER CENSURES MERRILL LYNCH AND DIRECTS IT TO CEASE-AND-DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF ADVISERS ACT SECTIONS 206(2) AND 206(4) AND RULE 206(4)-7 THEREUNDER. ADDITIONAL, THE ORDER CENSURED MERRILL LYNCH AND ORDERS IT TO PAY $4,032,871.89 IN DISGORGEMENT, $806,981.03 IN PREJUDGMENT INTEREST, AND $4,032,871.89 IN CIVIL MONEY PENALTIES, WHICH WAS PAID ON AUGUST 28, 2018.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CEASE AND DESIST; CENSURE; DISGORGEMENT; PREJUDGMENT INTEREST
3.
Date Initiated (MM/DD/YYYY):
08/20/2018
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
3-18651
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
ON AUGUST 20, 2018, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH") ENTERED INTO A SETTLEMENT WITH THE
SECURITIES AND EXCHANGE COMMISSION ("SEC") RESULTING IN THE SEC ISSUING AN ORDER. MERRILL LYNCH CONSENTED TO THE ENTRY OF THE
ORDER (THE "ORDER") THAT FINDS THAT IT FAILED TO DISCLOSE THAT THE PORTFOLIO MANAGER EVALUATION PROCESS EMPLOYED IN CONNECTION
WITH A JANUARY 2013 TERMINATION RECOMMENDATION FOR OVER FIFTEEN HUNDRED OF ITS RETAIL ADVISORY ACCOUNTS WAS EXPOSED TO A
CONFLICT OF INTEREST INVOLVING OTHER BUSINESS INTERESTS. THE ORDER FINDS THAT THIS UNDISCLOSED CONFLICT OF INTEREST IN MERRILL
LYNCH'S DECISION-MAKING PROCESS VIOLATED ADVISERS ACT SECTION 206(2). MERRILL LYNCH ALSO VIOLATED ADVISERS ACT SECTION 206(4) AND
RULE 206(4)-7 PROMULGATED THEREUNDER.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Order
11. Resolution Date (MM/DD/YYYY):
08/20/2018
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 4,032,871.89
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
PREJUDGMENT INTEREST
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE ORDER CENSURES MERRILL LYNCH AND DIRECTS IT TO CEASE-AND-DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY
FUTURE VIOLATIONS OF ADVISERS ACT SECTIONS 206(2) AND 206(4) AND RULE 206(4)-7 THEREUNDER. ADDITIONAL, THE ORDER CENSURED
MERRILL LYNCH AND ORDERS IT TO PAY $4,032,871.89 IN DISGORGEMENT, $806,981.03 IN PREJUDGMENT INTEREST, AND $4,032,871.89 IN
CIVIL MONEY PENALTIES, WHICH WAS PAID ON AUGUST 28, 2018.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
SOLELY FOR THE PURPOSE OF SETTLING THESE PROCEEDINGS, MERRILL LYNCH CONSENTED TO THE ORDER WITHOUT ADMITTING OR DENYING THE
FINDINGS IN THE ORDER, EXCEPT AS TO THE SEC'S JURISDICTION OVER IT AND THE SUBJECT MATTER. THE ALLEGATIONS, DISPOSITIONS, FINDINGS
AND SANCTIONS OF THE ORDER ARE DESCRIBED ABOVE IN ITEMS 7 AND 12.regulatory · block 91PDF pages 516–518
- Regulator name — filed text
- NASDAQ OPTIONS MARKET LLC
- Monetary/Fine Amount — filed text
- $ 125,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI-MANIPULATION.
Other filed details
Description of allegations — filed text
THE EXCHANGE ALLEGED THAT THE FIRM DID NOT HAVE SUPERVISORY SYSTEMS AND SURVEILLANCES REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH EXCHANGE RULES PROHIBITING MANIPULATIVE CROSS-PRODUCT TRADING OR MINI-MANIPULATIVE ACTIVITY AND THAT THE FIRM DID NOT HAVE REASONABLE WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE DETECTION AND PREVENTION OF POTENTIAL MINI- MANIPULATION, IN VIOLATION OF NASDAQ RULES 2010A AND 3010 AND NOM RULE CHAPTER III, SECTION 1 AND CHAPTER V, SECTION 1(B)(IV).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI- MANIPULATION.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) NASDAQ OPTIONS MARKET LLC 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 09/26/2018 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2014041127907 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE EXCHANGE ALLEGED THAT THE FIRM DID NOT HAVE SUPERVISORY SYSTEMS AND SURVEILLANCES REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH EXCHANGE RULES PROHIBITING MANIPULATIVE CROSS-PRODUCT TRADING OR MINI-MANIPULATIVE ACTIVITY AND THAT THE FIRM DID NOT HAVE REASONABLE WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE DETECTION AND PREVENTION OF POTENTIAL MINI- MANIPULATION, IN VIOLATION OF NASDAQ RULES 2010A AND 3010 AND NOM RULE CHAPTER III, SECTION 1 AND CHAPTER V, SECTION 1(B)(IV). 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 09/26/2018 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 125,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI- MANIPULATION. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI-MANIPULATION.
regulatory · block 92PDF pages 518–520
- Regulator name — filed text
- NASDAQ PHLX LLC
- Monetary/Fine Amount — filed text
- $ 125,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI-MANIPULATION.
Other filed details
Description of allegations — filed text
THE EXCHANGE ALLEGED THAT THE FIRM DID NOT HAVE SUPERVISORY SYSTEMS OR SURVEILLANCES REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH EXCHANGE RULES PROHIBITING POTENTIALLY MANIPULATIVE CROSS-PRODUCT TRADING OR MINI-MANIPULATIVE ACTIVITY AND THAT THE FIRM DID NOT HAVE REASONABLE WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE DETECTION AND PREVENTION OF POTENTIAL MINI- MANIPULATION, IN VIOLATION OF PHLX RULES 707 AND 748(B), (D) AND (H).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI- MANIPULATION.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) NASDAQ PHLX LLC 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 09/26/2018 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2014041127908 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE EXCHANGE ALLEGED THAT THE FIRM DID NOT HAVE SUPERVISORY SYSTEMS OR SURVEILLANCES REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH EXCHANGE RULES PROHIBITING POTENTIALLY MANIPULATIVE CROSS-PRODUCT TRADING OR MINI-MANIPULATIVE ACTIVITY AND THAT THE FIRM DID NOT HAVE REASONABLE WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE DETECTION AND PREVENTION OF POTENTIAL MINI- MANIPULATION, IN VIOLATION OF PHLX RULES 707 AND 748(B), (D) AND (H). 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 09/26/2018 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 125,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI- MANIPULATION. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI-MANIPULATION.
regulatory · block 93PDF pages 520–522
- Regulator name — filed text
- NASDAQ ISE, LLC
- Monetary/Fine Amount — filed text
- $ 125,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI-MANIPULATION.
Other filed details
Description of allegations — filed text
THE EXCHANGE ALLEGED THAT THE FIRM DID NOT HAVE SUPERVISORY SYSTEMS OR SURVEILLANCES REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH EXCHANGE RULES PROHIBITING POTENTIALLY MANIPULATIVE CROSS-PRODUCT TRADING OR MINI-MANIPULATIVE ACTIVITY AND THAT THE FIRM DID NOT HAVE REASONABLE WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE DETECTION AND PREVENTION OF POTENTIAL MINI- MANIPULATION, IN VIOLATION OF ISE RULES 400 AND 401.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI- MANIPULATION.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) NASDAQ ISE, LLC 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 09/26/2018 Exact Explanation If not exact, provide explanation: ALTHOUGH THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT (AWC) WAS ENTERED BY THE EXCHANGE ON 09/14/2018, FINRA PROVIDED NOTICE OF ACCEPTANCE OF THE AWC TO THE FIRM ON 09/26/2018. 4. Docket/Case Number: 2014041127905 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE EXCHANGE ALLEGED THAT THE FIRM DID NOT HAVE SUPERVISORY SYSTEMS OR SURVEILLANCES REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH EXCHANGE RULES PROHIBITING POTENTIALLY MANIPULATIVE CROSS-PRODUCT TRADING OR MINI-MANIPULATIVE ACTIVITY AND THAT THE FIRM DID NOT HAVE REASONABLE WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE DETECTION AND PREVENTION OF POTENTIAL MINI- MANIPULATION, IN VIOLATION OF ISE RULES 400 AND 401. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 09/26/2018 Exact Explanation If not exact, provide explanation: ALTHOUGH THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT (AWC) WAS ENTERED BY THE EXCHANGE ON 09/14/2018, FINRA PROVIDED NOTICE OF ACCEPTANCE OF THE AWC TO THE FIRM ON 09/26/2018. 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 125,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI- MANIPULATION. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI-MANIPULATION.
regulatory · block 94PDF pages 522–524
- Regulator name — filed text
- BOX EXCHANGE LLC
- Monetary/Fine Amount — filed text
- $ 125,000.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO BOX. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI-MANIPULATION.
Other filed details
Description of allegations — filed text
BOX ALLEGED THAT THE FIRM DID NOT HAVE SUPERVISORY SYSTEMS OR SURVEILLANCES REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH BOX RULES PROHIBITING MANIPULATIVE CROSS-PRODUCT TRADING OR MINI-MANIPULATIVE ACTIVITY AND THAT THE FIRM DID NOT HAVE REASONABLE WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE DETECTION AND PREVENTION OF POTENTIAL MINI-MANIPULATION , IN VIOLATION OF BOX RULES 3000(A), 2010 AND 7000(C)(4).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO BOX. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI-MANIPULATION.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) BOX EXCHANGE LLC 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 09/26/2018 Exact Explanation If not exact, provide explanation: ALTHOUGH THE LETTER OF CONSENT WAS ENTERED BY BOX ON 09/07/2018, FINRA PROVIDED NOTICE OF APPROVAL OF THE LETTER OF CONSENT TO THE FIRM ON 09/26/2018. 4. Docket/Case Number: 2014041127904 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): BOX ALLEGED THAT THE FIRM DID NOT HAVE SUPERVISORY SYSTEMS OR SURVEILLANCES REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH BOX RULES PROHIBITING MANIPULATIVE CROSS-PRODUCT TRADING OR MINI-MANIPULATIVE ACTIVITY AND THAT THE FIRM DID NOT HAVE REASONABLE WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE DETECTION AND PREVENTION OF POTENTIAL MINI-MANIPULATION , IN VIOLATION OF BOX RULES 3000(A), 2010 AND 7000(C)(4). 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Consent 11. Resolution Date (MM/DD/YYYY): 09/26/2018 Exact Explanation If not exact, provide explanation: ALTHOUGH THE LETTER OF CONSENT WAS ENTERED BY BOX ON 09/07/2018, FINRA PROVIDED NOTICE OF APPROVAL OF THE LETTER OF CONSENT TO THE FIRM ON 09/26/2018. 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 125,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO BOX. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI-MANIPULATION. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO BOX. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI-MANIPULATION.
regulatory · block 95PDF pages 524–525
- Regulator name — filed text
- MIAX INTERNATIONAL SECURITIES EXCHANGE, LLC
- Monetary/Fine Amount — filed text
- $ 125,000.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO BOX. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI-MANIPULATION.
Other filed details
Description of allegations — filed text
THE EXCHANGE ALLEGED THAT THE FIRM DID NOT HAVE SUPERVISORY SYSTEMS OR SURVEILLANCES REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH EXCHANGE RULES PROHIBITING POTENTIALLY MANIPULATIVE CROSS-PRODUCT TRADING OR MINI-MANIPULATIVE ACTIVITY AND THAT THE FIRM DID NOT HAVE REASONABLE WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE DETECTION AND PREVENTION OF POTENTIAL MINI- MANIPULATION, IN VIOLATION OF MIAX RULES 300 AND 500(B).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO BOX. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI-MANIPULATION.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) MIAX INTERNATIONAL SECURITIES EXCHANGE, LLC 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 09/29/2018 Exact Explanation If not exact, provide explanation: ALTHOUGH THE LETTER OF CONSENT WAS ENTERED BY THE EXCHANGE ON 08/22/2018, FINRA PROVIDED NOTICE OF APPROVAL OF THE LETTER OF CONSENT TO THE FIRM ON 09/26/2018. 4. Docket/Case Number: 2014041127903 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE EXCHANGE ALLEGED THAT THE FIRM DID NOT HAVE SUPERVISORY SYSTEMS OR SURVEILLANCES REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH EXCHANGE RULES PROHIBITING POTENTIALLY MANIPULATIVE CROSS-PRODUCT TRADING OR MINI-MANIPULATIVE ACTIVITY AND THAT THE FIRM DID NOT HAVE REASONABLE WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE DETECTION AND PREVENTION OF POTENTIAL MINI- MANIPULATION, IN VIOLATION OF MIAX RULES 300 AND 500(B). 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Consent 11. Resolution Date (MM/DD/YYYY): 09/26/2018 Exact Explanation If not exact, provide explanation: ALTHOUGH THE LETTER OF CONSENT WAS ENTERED BY THE EXCHANGE ON 08/22/2018, FINRA PROVIDED NOTICE OF APPROVAL OF THE LETTER OF CONSENT TO THE FIRM ON 09/26/2018. 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 125,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO BOX. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI-MANIPULATION. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO BOX. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI-MANIPULATION.
regulatory · block 96PDF pages 525–527
- Regulator name — filed text
- NYSE ARCA, INC.
- Monetary/Fine Amount — filed text
- $ 125,000.00
- How was matter resolved — filed text
- Decision & Order of Offer of Settlement
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR THE FINDINGS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI- MANIPULATION.
Other filed details
Description of allegations — filed text
THE EXCHANGE ALLEGED THAT THE FIRM DID NOT HAVE SUPERVISORY SYSTEMS AND SURVEILLANCES REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH EXCHANGE RULES PROHIBITING MANIPULATIVE CROSS-PRODUCT TRADING OR MINI-MANIPULATIVE ACTIVITY AND THAT THE FIRM DID NOT HAVE WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE DETECTION AND PREVENTION OF POTENTIAL MINI-MANIPULATION, IN VIOLATION OF NYSE ARCA RULES 11.18(A), (B) AND (C) AND 11.1(B).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR THE FINDINGS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI-MANIPULATION.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) NYSE ARCA, INC. 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 09/26/2018 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 20140411279 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE EXCHANGE ALLEGED THAT THE FIRM DID NOT HAVE SUPERVISORY SYSTEMS AND SURVEILLANCES REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH EXCHANGE RULES PROHIBITING MANIPULATIVE CROSS-PRODUCT TRADING OR MINI-MANIPULATIVE ACTIVITY AND THAT THE FIRM DID NOT HAVE WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE DETECTION AND PREVENTION OF POTENTIAL MINI-MANIPULATION, IN VIOLATION OF NYSE ARCA RULES 11.18(A), (B) AND (C) AND 11.1(B). 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Decision & Order of Offer of Settlement 11. Resolution Date (MM/DD/YYYY): 09/26/2018 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 125,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR THE FINDINGS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI-MANIPULATION. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR THE FINDINGS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI- MANIPULATION.
regulatory · block 97PDF pages 527–529
- Regulator name — filed text
- NYSE AMERICAN LLC
- Monetary/Fine Amount — filed text
- $ 125,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI-MANIPULATION.
Other filed details
Description of allegations — filed text
THE EXCHANGE ALLEGED THAT THE FIRM DID NOT HAVE SUPERVISORY SYSTEMS OR SURVEILLANCES REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH EXCHANGE RULES PROHIBITING POTENTIALLY MANIPULATIVE CROSS-PRODUCT TRADING OR MINI-MANIPULATIVE ACTIVITY AND THAT THE FIRM DID NOT HAVE REASONABLE WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE DETECTION AND PREVENTION OF POTENTIAL MINI- MANIPULATION , IN VIOLATION OF AMERICAN RULES 16 AND 320.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI- MANIPULATION.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) NYSE AMERICAN LLC 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 09/26/2018 Exact Explanation If not exact, provide explanation: ALTHOUGH THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT (AWC) WAS ENTERED BY THE EXCHANGE ON 08/20/2018, FINRA PROVIDED NOTICE OF ACCEPTANCE OF THE AWC TO THE FIRM ON 09/26/2018. 4. Docket/Case Number: 2014041127902 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE EXCHANGE ALLEGED THAT THE FIRM DID NOT HAVE SUPERVISORY SYSTEMS OR SURVEILLANCES REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH EXCHANGE RULES PROHIBITING POTENTIALLY MANIPULATIVE CROSS-PRODUCT TRADING OR MINI-MANIPULATIVE ACTIVITY AND THAT THE FIRM DID NOT HAVE REASONABLE WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE DETECTION AND PREVENTION OF POTENTIAL MINI- MANIPULATION , IN VIOLATION OF AMERICAN RULES 16 AND 320. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 09/26/2018 Exact Explanation If not exact, provide explanation: ALTHOUGH THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT (AWC) WAS ENTERED BY THE EXCHANGE ON 08/20/2018, FINRA PROVIDED NOTICE OF ACCEPTANCE OF THE AWC TO THE FIRM ON 09/26/2018. 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 125,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI- MANIPULATION. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI-MANIPULATION.
regulatory · block 98PDF pages 529–531
- Regulator name — filed text
- NASDAQ GEMX, LLC
- Monetary/Fine Amount — filed text
- $ 125,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI-MANIPULATION.
Other filed details
Description of allegations — filed text
THE EXCHANGE ALLEGED THAT THE FIRM DID NOT HAVE SUPERVISORY SYSTEMS OR SURVEILLANCES REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH EXCHANGE RULES PROHIBITING POTENTIALLY MANIPULATIVE CROSS-PRODUCT TRADING OR MINI-MANIPULATIVE ACTIVITY AND THAT THE FIRM DID NOT HAVE REASONABLE WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE DETECTION AND PREVENTION OF POTENTIAL MINI- MANIPULATION, IN VIOLATION OF GEMX CHAPTER 4 IN CONNECTION WITH ISE RULES 400 AND 401.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI- MANIPULATION.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) NASDAQ GEMX, LLC 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 09/26/2018 Exact Explanation If not exact, provide explanation: ALTHOUGH THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT (AWC) WAS ENTERED BY THE EXCHANGE ON 09/14/2018, FINRA PROVIDED NOTICE OF ACCEPTANCE OF THE AWC TO THE FIRM ON 09/26/2018. 4. Docket/Case Number: 2014041127906 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE EXCHANGE ALLEGED THAT THE FIRM DID NOT HAVE SUPERVISORY SYSTEMS OR SURVEILLANCES REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH EXCHANGE RULES PROHIBITING POTENTIALLY MANIPULATIVE CROSS-PRODUCT TRADING OR MINI-MANIPULATIVE ACTIVITY AND THAT THE FIRM DID NOT HAVE REASONABLE WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THE DETECTION AND PREVENTION OF POTENTIAL MINI- MANIPULATION, IN VIOLATION OF GEMX CHAPTER 4 IN CONNECTION WITH ISE RULES 400 AND 401. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 09/26/2018 Exact Explanation If not exact, provide explanation: ALTHOUGH THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT (AWC) WAS ENTERED BY THE EXCHANGE ON 09/14/2018, FINRA PROVIDED NOTICE OF ACCEPTANCE OF THE AWC TO THE FIRM ON 09/26/2018. 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 125,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI- MANIPULATION. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED A TOTAL OF $125,000, OF WHICH $15,625 IS PAYABLE TO THE EXCHANGE. IN ADDITION, THE FIRM AGREED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO MINI-MANIPULATION.
regulatory · block 99PDF pages 531–533
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 300,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED AND FINED $300,000.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO REASONABLY SUPERVISE AN ASSOCIATED PERSON WHO, TOGETHER WITH A THIRD PARTY INDIVIDUAL, ENGAGED IN A SCHEME TO DEFRAUD A CUSTOMER OF THE FIRM. THE SCHEME BEGAN WHEN THE ASSOCIATED PERSON WAS ASSOCIATED WITH THE FIRM, BUT THE ACTUAL THEFT OF FUNDS OCCURRED AFTER THE ASSOCIATED PERSON LEFT THE FIRM. THE FINDINGS STATED THAT THE FIRM FAILED TO RESPOND REASONABLY TO RED FLAGS THAT THE ASSOCIATED PERSON WAS ENGAGED IN CONDUCT THAT APPEARED TO VIOLATE THE FIRM'S POLICIES AND PROCEDURES, INCLUDING A FAILURE TO REASONABLY INVESTIGATE CERTAIN OF THE ASSOCIATED PERSON'S EMAIL COMMUNICATIONS THAT IT HAD FLAGGED FOR REVIEW AND A FAILURE TO REASONABLY FOLLOW UP ON A DEFAULT JUDGMENT ENTERED AGAINST THE ASSOCIATED PERSON BASED ON A CIVIL COMPLAINT THAT ALLEGED THAT THE ASSOCIATED PERSON HAD CHEATED A COUPLE WHO HAD LENT THE THIRD PARTY MONEY AND THAT THE ASSOCIATED PERSON HAD WRITTEN TWO POST-DATED CHECKS, ONLY TO LATER CLOSE THE ACCOUNT ON WHICH THE CHECKS WERE WRITTEN. THE FINDINGS STATED THAT HAD THE FIRM MORE VIGOROUSLY RESPONDED TO THE RED FLAGS, IT LIKELY COULD HAVE DISCOVERED THE ASSOCIATED PERSON'S ASSOCIATED WITH THE THIRD PARTY AND BEEN IN A BETTER POSITION TO ADDRESS THE RISK THAT THE ASSOCIATED PERSON POSED TO THE FIRM AND CUSTOMER OF THE FIRM. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO DISCLOSE CERTAIN REPORTABLE EVENTS THAT OCCURRED IN 2010 AND 2012 TO FINRA.
Sanction detail — filed text
THE FIRM WAS CENSURED AND FINED $300,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 12/13/2018 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2014041490801 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO REASONABLY SUPERVISE AN ASSOCIATED PERSON WHO, TOGETHER WITH A THIRD PARTY INDIVIDUAL, ENGAGED IN A SCHEME TO DEFRAUD A CUSTOMER OF THE FIRM. THE SCHEME BEGAN WHEN THE ASSOCIATED PERSON WAS ASSOCIATED WITH THE FIRM, BUT THE ACTUAL THEFT OF FUNDS OCCURRED AFTER THE ASSOCIATED PERSON LEFT THE FIRM. THE FINDINGS STATED THAT THE FIRM FAILED TO RESPOND REASONABLY TO RED FLAGS THAT THE ASSOCIATED PERSON WAS ENGAGED IN CONDUCT THAT APPEARED TO VIOLATE THE FIRM'S POLICIES AND PROCEDURES, INCLUDING A FAILURE TO REASONABLY INVESTIGATE CERTAIN OF THE ASSOCIATED PERSON'S EMAIL COMMUNICATIONS THAT IT HAD FLAGGED FOR REVIEW AND A FAILURE TO REASONABLY FOLLOW UP ON A DEFAULT JUDGMENT ENTERED AGAINST THE ASSOCIATED PERSON BASED ON A CIVIL COMPLAINT THAT ALLEGED THAT THE ASSOCIATED PERSON HAD CHEATED A COUPLE WHO HAD LENT THE THIRD PARTY MONEY AND THAT THE ASSOCIATED PERSON HAD WRITTEN TWO POST-DATED CHECKS, ONLY TO LATER CLOSE THE ACCOUNT ON WHICH THE CHECKS WERE WRITTEN. THE FINDINGS STATED THAT HAD THE FIRM MORE VIGOROUSLY RESPONDED TO THE RED FLAGS, IT LIKELY COULD HAVE DISCOVERED THE ASSOCIATED PERSON'S ASSOCIATED WITH THE THIRD PARTY AND BEEN IN A BETTER POSITION TO ADDRESS THE RISK THAT THE ASSOCIATED PERSON POSED TO THE FIRM AND CUSTOMER OF THE FIRM. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO DISCLOSE CERTAIN REPORTABLE EVENTS THAT OCCURRED IN 2010 AND 2012 TO FINRA. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 12/13/2018 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 300,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED AND FINED $300,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED AND FINED $300,000.
regulatory · block 100PDF pages 533–536
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 5,500,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED, FINED $5,500,000 AND ORDERED TO PAY DISGORGEMENT OF THE REVENUES THE FIRM RECEIVED ON THE VIOLATIVE TRANSACTIONS, WHICH IS ORDERED TO BE PAID TO FINRA IN THE AMOUNT OF $490,530, PLUS INTEREST. DRP Pages
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT OVER AN EIGHT YEAR PERIOD, THE FIRM MADE AT LEAST 1,462 SALES OF INITIAL PUBLIC OFFERING (IPO) SHARES IN 325 DIFFERENT OFFERINGS TO 149 CUSTOMER ACCOUNTS IN WHICH RESTRICTED PERSONS HELD A BENEFICIAL INTEREST. THE FINDINGS STATED THAT ALL OF THE RESTRICTED PERSONS WHO IMPROPERLY RECEIVED IPO ALLOCATIONS FROM THE FIRM WERE ASSOCIATED PERSONS OF BROKER-DEALERS AND/OR IMMEDIATE FAMILY MEMBERS OF FINANCIAL ADVISORS (FAS) AT THE FIRM. AMONG THE IPOS IMPROPERLY SOLD TO THESE ACCOUNTS WERE HIGHLY ANTICIPATED AND SOUGHT AFTER STOCKS. AT LEAST 120 DIFFERENT FAS LOCATED IN 79 OF THE FIRM'S BRANCH OFFICES EFFECTED THE PROHIBITED IPO SALES. THE FINDINGS ALSO INCLUDED THAT THESE TRANSACTIONS OCCURRED BECAUSE THE FIRM FAILED TO IMPLEMENT SUPERVISORY SYSTEMS AND PROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH FINRA RULE 5130. THE FINDINGS STATED THAT THE FIRM ALSO FAILED TO (1) REASONABLY RESPOND WHEN IT LEARNED THAT IT HAD REPEATEDLY SOLD IPOS TO IMMEDIATE FAMILY MEMBERS OF FIRM FAS, AND (2) TRAIN ANY OF ITS EMPLOYEES ON RULE 5130 FROM AT LEAST JANUARY 2010 TO SEPTEMBER 2014, EVEN THOUGH IT DEPENDED ON ITS EMPLOYEES TO HELP THE FIRM COMPLY WITH THE RULE'S REQUIREMENTS, AND THAT WHEN THE FIRM DID START OFFERING TRAINING, THAT IT DID NOT OFFER THE TRAINING TO MANY KEY EMPLOYEES WHO WERE INTEGRALLY INVOLVED IN EFFECTING IPO TRANSACTIONS.
Sanction detail — filed text
THE FIRM WAS CENSURED, FINED $5,500,000 AND ORDERED TO PAY DISGORGEMENT OF THE REVENUES THE FIRM RECEIVED ON THE VIOLATIVE TRANSACTIONS, WHICH IS ORDERED TO BE PAID TO FINRA IN THE AMOUNT OF $490,530, PLUS INTEREST.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; DISGORGEMENT; INTEREST 3. Date Initiated (MM/DD/YYYY): 12/20/2018 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2014043580203 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Equity Listed (Common & Preferred Stock) Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT OVER AN EIGHT YEAR PERIOD, THE FIRM MADE AT LEAST 1,462 SALES OF INITIAL PUBLIC OFFERING (IPO) SHARES IN 325 DIFFERENT OFFERINGS TO 149 CUSTOMER ACCOUNTS IN WHICH RESTRICTED PERSONS HELD A BENEFICIAL INTEREST. THE FINDINGS STATED THAT ALL OF THE RESTRICTED PERSONS WHO IMPROPERLY RECEIVED IPO ALLOCATIONS FROM THE FIRM WERE ASSOCIATED PERSONS OF BROKER-DEALERS AND/OR IMMEDIATE FAMILY MEMBERS OF FINANCIAL ADVISORS (FAS) AT THE FIRM. AMONG THE IPOS IMPROPERLY SOLD TO THESE ACCOUNTS WERE HIGHLY ANTICIPATED AND SOUGHT AFTER STOCKS. AT LEAST 120 DIFFERENT FAS LOCATED IN 79 OF THE FIRM'S BRANCH OFFICES EFFECTED THE PROHIBITED IPO SALES. THE FINDINGS ALSO INCLUDED THAT THESE TRANSACTIONS OCCURRED BECAUSE THE FIRM FAILED TO IMPLEMENT SUPERVISORY SYSTEMS AND PROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH FINRA RULE 5130. THE FINDINGS STATED THAT THE FIRM ALSO FAILED TO (1) REASONABLY RESPOND WHEN IT LEARNED THAT IT HAD REPEATEDLY SOLD IPOS TO IMMEDIATE FAMILY MEMBERS OF FIRM FAS, AND (2) TRAIN ANY OF ITS EMPLOYEES ON RULE 5130 FROM AT LEAST JANUARY 2010 TO SEPTEMBER 2014, EVEN THOUGH IT DEPENDED ON ITS EMPLOYEES TO HELP THE FIRM COMPLY WITH THE RULE'S REQUIREMENTS, AND THAT WHEN THE FIRM DID START OFFERING TRAINING, THAT IT DID NOT OFFER THE TRAINING TO MANY KEY EMPLOYEES WHO WERE INTEGRALLY INVOLVED IN EFFECTING IPO TRANSACTIONS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 12/20/2018 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 5,500,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: INTEREST Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED, FINED $5,500,000 AND ORDERED TO PAY DISGORGEMENT OF THE REVENUES THE FIRM RECEIVED ON THE VIOLATIVE TRANSACTIONS, WHICH IS ORDERED TO BE PAID TO FINRA IN THE AMOUNT OF $490,530, PLUS INTEREST. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED, FINED $5,500,000 AND ORDERED TO PAY DISGORGEMENT OF THE REVENUES THE FIRM RECEIVED ON THE VIOLATIVE TRANSACTIONS, WHICH IS ORDERED TO BE PAID TO FINRA IN THE AMOUNT OF $490,530, PLUS INTEREST. DRP Pages
regulatory · block 1PDF pages 536–538
- Regulator name — filed text
- UNITED STATES SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 2,891,389.48
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
MERRILL SUBMITTED AN OFFER OF SETTLEMENT (THE "OFFER") WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. MERRILL FAILED REASONABLY TO FULFILL ITS SUPERVISORY RESPONSIBILITIES WITHIN THE MEANING OF SECTION 15(B)(4)(E) OF THE EXCHANGE ACT. SOLELY FOR THE PURPOSE OF SETTLING THESE PROCEEDINGS, MERRILL CONSENTED TO THE ORDER WITHOUT ADMITTING OR DENYING THE FINDINGS IN THE ORDER, EXCEPT AS TO THE SEC'S JURISDICTION OVER IT AND THE SUBJECT MATTER. THE SEC ORDERED THAT MERRILL IS CENSURED AND SHALL PAY DISGORGEMENT OF $4,448,291.52 TOGETHER WITH PREJUDGMENT INTEREST OF $724,795.40 AND A CIVIL MONEY PENALTY OF $2,891,389.48.
Other filed details
Description of allegations — filed text
SEC ADMIN RELEASE 34-85395 / MARCH 22, 2019: THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMS IT APPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TO SECTION 15(B)(4) OF THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT"), AGAINST MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL" OR "RESPONDENT"). THE COMMISSION FINDS THAT THESE PROCEEDINGS ARISE OUT OF MERRILL'S IMPROPER PRACTICES WITH RESPECT TO SECURITIES LENDING TRANSACTIONS INVOLVING PRE-RELEASED AMERICAN DEPOSITARY RECEIPTS ("ADRS"). ADR FACILITIES, WHICH PROVIDE FOR THE ISSUANCE OF ADRS, ARE ESTABLISHED BY A DEPOSITARY BANK ("DEPOSITARY") PURSUANT TO A DEPOSIT AGREEMENT ("DEPOSIT AGREEMENT"). TYPICALLY, A DEPOSITARY ISSUES ADRS TO A MARKET PARTICIPANT THAT CONTEMPORANEOUSLY DELIVERS THE CORRESPONDING NUMBER OF FOREIGN SECURITIES TO THE DEPOSITARY'S FOREIGN CUSTODIAN ("CUSTODIAN"). HOWEVER, IN CERTAIN SITUATIONS, DEPOSIT AGREEMENTS MAY PROVIDE FOR "PRE- RELEASE" TRANSACTIONS IN WHICH A MARKET PARTICIPANT CAN OBTAIN NEWLY ISSUED ADRS FROM THE DEPOSITARY BEFORE DELIVERING ORDINARY SHARES TO THE CUSTODIAN. ONLY BROKERS (OR OTHER MARKET PARTICIPANTS) THAT HAVE ENTERED INTO PRE-RELEASE AGREEMENTS WITH A DEPOSITARY ("PRE-RELEASE AGREEMENTS") CAN OBTAIN PRE-RELEASED ADRS FROM THE DEPOSITARY. THE PRE-RELEASE AGREEMENTS, CONSISTENT WITH THE DEPOSIT AGREEMENTS, REQUIRE THE BROKER RECEIVING THE PRE-RELEASED ADRS ("PRE-RELEASE BROKER"), OR ITS CUSTOMER ON WHOSE BEHALF THE PRE-RELEASE BROKER IS ACTING, TO BENEFICIALLY OWN THE ORDINARY SHARES REPRESENTED BY THE ADRS, AND TO ASSIGN ALL BENEFICIAL RIGHTS, TITLE, AND INTEREST TO THOSE ORDINARY SHARES TO THE DEPOSITARY WHILE THE PRE-RELEASE TRANSACTION IS OUTSTANDING. IN EFFECT, THE PRE-RELEASE BROKER OR ITS CUSTOMER BECOMES THE TEMPORARY CUSTODIAN OF THE ORDINARY SHARES THAT WOULD OTHERWISE HAVE BEEN DELIVERED TO THE CUSTODIAN. FROM AT LEAST JUNE 2012 UNTIL APPROXIMATELY NOVEMBER 2014, MERRILL RECEIVED PRE-RELEASED ADRS FROM PRE-RELEASE BROKERS THAT HAD BEEN ISSUED BY DEPOSITARIES WHERE NEITHER THE PRE-RELEASE BROKERS NOR MERRILL HAD TAKEN REASONABLE STEPS TO SATISFY THE PRE-RELEASE BROKERS' OBLIGATIONS UNDER THE PRE-RELEASE AGREEMENTS. MERRILL, WHICH WAS NOT A PRE-RELEASE BROKER, UNDERSTOOD THAT THE ADRS THAT MERRILL BORROWED FROM PRE-RELEASE BROKERS MAY HAVE BEEN SOURCED FROM DEPOSITARIES PURSUANT TO PRE-RELEASE AGREEMENTS. MERRILL ALSO UNDERSTOOD THAT THE BENEFICIAL OWNERSHIP AND OTHER REPRESENTATIONS THAT PRE-RELEASE BROKERS WERE REQUIRED TO MAKE TO DEPOSITARIES IN ORDER TO OBTAIN PRE-RELEASED ADRS. MERRILL ALSO UNDERSTOOD THE CONDUIT NATURE OF PRE-RELEASE BROKERS' SECURITIES LENDING BUSINESS, WHICH UNDER THE CIRCUMSTANCES SHOULD HAVE INDICATED THAT THE PRE-RELEASE BROKERS DID NOT OWN UNDERLYING ORDINARY SHARES. MERRILL'S ASSOCIATE PERSONS ON ITS SECURITIES LENDING DESK, BY OBTAINING ADRS FROM PRE-RELEASE BROKERS IN CIRCUMSTANCES WHERE THEY SHOULD HAVE KNOWN THAT SUCH ADRS LIKELY HAD BEEN PRE-RELEASED WITHOUT COMPLIANCE WITH THE PRE-RELEASE BROKERS' OBLIGATIONS UNDER THE PRE-RELEASE AGREEMENTS, VIOLATED SECTION 17(A)(3) OF THE SECURITIES ACT OF 1933 ("SECURITIES ACT"). MERRILL'S SUPERVISORY POLICIES AND PROCEDURES WERE NOT REASONABLY DESIGNED AND IMPLEMENTED TO PROVIDE SUFFICIENT OVERSIGHT OF ASSOCIATED PERSONS TO PREVENT AND DETECT THEIR VIOLATIONS OF SECTION 17(A)(3) OF THE SECURITIES ACT. AS A RESULT, MERRILL FAILED REASONABLY TO SUPERVISE ITS ASSOCIATED PERSONS WITHIN THE MEANING OF SECTION 15(B)(4)(E) OF THE EXCHANGE ACT.
Sanction detail — filed text
MERRILL WAS CENSURED AND ORDERED TO PAY DISGORGEMENT OF $4,448,291.52 TOGETHER WITH PREJUDGMENT INTEREST OF $724,795.40 AND A CIVIL MONEY PENALTY OF $2,891,389.48.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE; DISGORGEMENT; PREJUDGMENT INTEREST
3.
Date Initiated (MM/DD/YYYY):
03/22/2019
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
3-19114
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
AMERICAN DEPOSITARY RECEIPTS
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
SEC ADMIN RELEASE 34-85395 / MARCH 22, 2019: THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMS IT APPROPRIATE AND IN
THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TO SECTION 15(B)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT"), AGAINST MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL" OR
"RESPONDENT"). THE COMMISSION FINDS THAT THESE PROCEEDINGS ARISE OUT OF MERRILL'S IMPROPER PRACTICES WITH RESPECT TO SECURITIES
LENDING TRANSACTIONS INVOLVING PRE-RELEASED AMERICAN DEPOSITARY RECEIPTS ("ADRS"). ADR FACILITIES, WHICH PROVIDE FOR THE ISSUANCE
OF ADRS, ARE ESTABLISHED BY A DEPOSITARY BANK ("DEPOSITARY") PURSUANT TO A DEPOSIT AGREEMENT ("DEPOSIT AGREEMENT"). TYPICALLY, A
DEPOSITARY ISSUES ADRS TO A MARKET PARTICIPANT THAT CONTEMPORANEOUSLY DELIVERS THE CORRESPONDING NUMBER OF FOREIGN SECURITIES
TO THE DEPOSITARY'S FOREIGN CUSTODIAN ("CUSTODIAN"). HOWEVER, IN CERTAIN SITUATIONS, DEPOSIT AGREEMENTS MAY PROVIDE FOR "PRE-
RELEASE" TRANSACTIONS IN WHICH A MARKET PARTICIPANT CAN OBTAIN NEWLY ISSUED ADRS FROM THE DEPOSITARY BEFORE DELIVERING ORDINARY
SHARES TO THE CUSTODIAN. ONLY BROKERS (OR OTHER MARKET PARTICIPANTS) THAT HAVE ENTERED INTO PRE-RELEASE AGREEMENTS WITH A
DEPOSITARY ("PRE-RELEASE AGREEMENTS") CAN OBTAIN PRE-RELEASED ADRS FROM THE DEPOSITARY. THE PRE-RELEASE AGREEMENTS, CONSISTENT
WITH THE DEPOSIT AGREEMENTS, REQUIRE THE BROKER RECEIVING THE PRE-RELEASED ADRS ("PRE-RELEASE BROKER"), OR ITS CUSTOMER ON
WHOSE BEHALF THE PRE-RELEASE BROKER IS ACTING, TO BENEFICIALLY OWN THE ORDINARY SHARES REPRESENTED BY THE ADRS, AND TO ASSIGN ALL
BENEFICIAL RIGHTS, TITLE, AND INTEREST TO THOSE ORDINARY SHARES TO THE DEPOSITARY WHILE THE PRE-RELEASE TRANSACTION IS
OUTSTANDING. IN EFFECT, THE PRE-RELEASE BROKER OR ITS CUSTOMER BECOMES THE TEMPORARY CUSTODIAN OF THE ORDINARY SHARES THAT
WOULD OTHERWISE HAVE BEEN DELIVERED TO THE CUSTODIAN. FROM AT LEAST JUNE 2012 UNTIL APPROXIMATELY NOVEMBER 2014, MERRILL
RECEIVED PRE-RELEASED ADRS FROM PRE-RELEASE BROKERS THAT HAD BEEN ISSUED BY DEPOSITARIES WHERE NEITHER THE PRE-RELEASE BROKERS
NOR MERRILL HAD TAKEN REASONABLE STEPS TO SATISFY THE PRE-RELEASE BROKERS' OBLIGATIONS UNDER THE PRE-RELEASE AGREEMENTS. MERRILL,
WHICH WAS NOT A PRE-RELEASE BROKER, UNDERSTOOD THAT THE ADRS THAT MERRILL BORROWED FROM PRE-RELEASE BROKERS MAY HAVE BEEN
SOURCED FROM DEPOSITARIES PURSUANT TO PRE-RELEASE AGREEMENTS. MERRILL ALSO UNDERSTOOD THAT THE BENEFICIAL OWNERSHIP AND
OTHER REPRESENTATIONS THAT PRE-RELEASE BROKERS WERE REQUIRED TO MAKE TO DEPOSITARIES IN ORDER TO OBTAIN PRE-RELEASED ADRS.
MERRILL ALSO UNDERSTOOD THE CONDUIT NATURE OF PRE-RELEASE BROKERS' SECURITIES LENDING BUSINESS, WHICH UNDER THE CIRCUMSTANCES
SHOULD HAVE INDICATED THAT THE PRE-RELEASE BROKERS DID NOT OWN UNDERLYING ORDINARY SHARES. MERRILL'S ASSOCIATE PERSONS ON ITS
SECURITIES LENDING DESK, BY OBTAINING ADRS FROM PRE-RELEASE BROKERS IN CIRCUMSTANCES WHERE THEY SHOULD HAVE KNOWN THAT SUCH
ADRS LIKELY HAD BEEN PRE-RELEASED WITHOUT COMPLIANCE WITH THE PRE-RELEASE BROKERS' OBLIGATIONS UNDER THE PRE-RELEASE
AGREEMENTS, VIOLATED SECTION 17(A)(3) OF THE SECURITIES ACT OF 1933 ("SECURITIES ACT"). MERRILL'S SUPERVISORY POLICIES AND
PROCEDURES WERE NOT REASONABLY DESIGNED AND IMPLEMENTED TO PROVIDE SUFFICIENT OVERSIGHT OF ASSOCIATED PERSONS TO PREVENT AND
DETECT THEIR VIOLATIONS OF SECTION 17(A)(3) OF THE SECURITIES ACT. AS A RESULT, MERRILL FAILED REASONABLY TO SUPERVISE ITS ASSOCIATED
PERSONS WITHIN THE MEANING OF SECTION 15(B)(4)(E) OF THE EXCHANGE ACT.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Order
11. Resolution Date (MM/DD/YYYY):
03/22/2019
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 2,891,389.48
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
PREJUDGMENT INTEREST
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
MERRILL WAS CENSURED AND ORDERED TO PAY DISGORGEMENT OF $4,448,291.52 TOGETHER WITH PREJUDGMENT INTEREST OF $724,795.40
AND A CIVIL MONEY PENALTY OF $2,891,389.48.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
MERRILL SUBMITTED AN OFFER OF SETTLEMENT (THE "OFFER") WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. MERRILL FAILED REASONABLY
TO FULFILL ITS SUPERVISORY RESPONSIBILITIES WITHIN THE MEANING OF SECTION 15(B)(4)(E) OF THE EXCHANGE ACT. SOLELY FOR THE PURPOSE OF
SETTLING THESE PROCEEDINGS, MERRILL CONSENTED TO THE ORDER WITHOUT ADMITTING OR DENYING THE FINDINGS IN THE ORDER, EXCEPT AS TO
THE SEC'S JURISDICTION OVER IT AND THE SUBJECT MATTER. THE SEC ORDERED THAT MERRILL IS CENSURED AND SHALL PAY DISGORGEMENT OF
$4,448,291.52 TOGETHER WITH PREJUDGMENT INTEREST OF $724,795.40 AND A CIVIL MONEY PENALTY OF $2,891,389.48.regulatory · block 2PDF pages 538–540
- Regulator name — filed text
- NASDAQ STOCK MARKET
- Monetary/Fine Amount — filed text
- $ 17,500.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
SUBSEQUENT TO THE REVIEW PERIOD, THE FIRM UPDATED ITS SUPERVISORY SYSTEMS BY IMPLEMENTING A REPORT DESIGNED TO IDENTIFY SYMBOLS IN WHICH THE FIRM DID NOT GENERATE A MMPO QUOTE, WHICH INCLUDES QUOTES IN PREVIOUSLY INACTIVE SECURITIES. THEREFORE, ENFORCEMENT IS NOT RECOMMENDING AN UNDERTAKING.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO MAINTAIN A CONTINUOUS TWO-SIDED TRADING INTEREST DURING REGULAR MARKET HOURS AT PRICES WITHIN CERTAIN PERCENTAGES AWAY FROM THE NATIONAL BEST BID OR OFFER ("NBBO"). THE FINDINGS STATED THAT THE FIRM FAILED TO MAINTAIN A QUOTE FOR THE ENTIRE MARKET HOURS. THE VIOLATIONS OCCURRED AS A RESULT OF SYSTEM RELATED CODING ISSUES INVOLVING THE SENDING OF MARKET MAKER PEG ORDERS ("MMPO") TO NASDAQ FOR NEW SECURITIES THAT WERE ISSUED WITH THE SAME SYMBOL AS PREVIOUSLY INACTIVE SECURITIES (E.G., AS A RESULT OF A NAME CHANGE, RELISTING, NEW LISTING, ETC.). IN THESE SITUATIONS, THE FIRM'S SYSTEMS FAILED TO APPEND THE PROPER CODES THAT WERE USED TO MATCH THE SYMBOLS IN WHICH THE FIRM WAS MARKET MAKER AND OBTAIN MARKET DATA FOR SENDING A MMPO, WHICH WAS DUE TO THE FACT THAT THE CODES FOR THESE SYMBOLS WERE STILL ASSOCIATED WITH THE INACTIVE SECURITIES. THE CONDUCT DESCRIBED IN THIS PARAGRAPH CONSITUTES SEPARATE AND DISTINCT VIOLATIONS OF NASDAQ RULE 4613(A). THE FINDINGS ALSO STATED THAT THE FIRM'S SUPERVISORY SYSTEM WAS NOT REASONABLY DESGINED TO ACHIEVE COMPLIANCE WITH NASDAQ QUOTING OBLIGATIONS. SPECIFICALLY, THE FIRM'S SUPERVISION SYSTEM FAILED TO INCLUDE A REVIEW FOR NASDAQ SYMBOLS FOR WHICH IT WAS A REGISTERED MARKET MAKER AND WHERE THE FIRM'S RELEVANT SYSTEM DID NOT GENERATE MMPO QUOTES FOR SECURITIES THAT WERE ISSUED WITH THE SAME SYMBOL AS PREVIOUSLY INACTIVE SECURITIES. AS A RESULT, THE FIRM DID NOT DETECT THE SYSTEM RELATED CODING ISSUES THAT OCCURRED DURING THE REVIEW PERIOD. THE CONDUCT DESCRIBED IN THIS PARAGRAPH CONSTITUTES A VIOLATION OF NASDAQ RULES 2010A AND 3010.
Sanction detail — filed text
THE FIRM WAS CENSURED AND FINED $17,500 (COMPRISED OF $10,000 FOR THE VIOLATIONS OF NASDAQ RULE 4613(A), AND $7,500 FOR THE VIOLATIONS OF NASDAQ RULES 2010A AND 3010).
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
NASDAQ STOCK MARKET
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE
3.
Date Initiated (MM/DD/YYYY):
05/20/2019
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
2017056712301
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO
MAINTAIN A CONTINUOUS TWO-SIDED TRADING INTEREST DURING REGULAR MARKET HOURS AT PRICES WITHIN CERTAIN PERCENTAGES AWAY FROM
THE NATIONAL BEST BID OR OFFER ("NBBO"). THE FINDINGS STATED THAT THE FIRM FAILED TO MAINTAIN A QUOTE FOR THE ENTIRE MARKET HOURS.
THE VIOLATIONS OCCURRED AS A RESULT OF SYSTEM RELATED CODING ISSUES INVOLVING THE SENDING OF MARKET MAKER PEG ORDERS ("MMPO")
TO NASDAQ FOR NEW SECURITIES THAT WERE ISSUED WITH THE SAME SYMBOL AS PREVIOUSLY INACTIVE SECURITIES (E.G., AS A RESULT OF A NAME
CHANGE, RELISTING, NEW LISTING, ETC.). IN THESE SITUATIONS, THE FIRM'S SYSTEMS FAILED TO APPEND THE PROPER CODES THAT WERE USED TO
MATCH THE SYMBOLS IN WHICH THE FIRM WAS MARKET MAKER AND OBTAIN MARKET DATA FOR SENDING A MMPO, WHICH WAS DUE TO THE FACT THAT
THE CODES FOR THESE SYMBOLS WERE STILL ASSOCIATED WITH THE INACTIVE SECURITIES. THE CONDUCT DESCRIBED IN THIS PARAGRAPH
CONSITUTES SEPARATE AND DISTINCT VIOLATIONS OF NASDAQ RULE 4613(A). THE FINDINGS ALSO STATED THAT THE FIRM'S SUPERVISORY SYSTEM
WAS NOT REASONABLY DESGINED TO ACHIEVE COMPLIANCE WITH NASDAQ QUOTING OBLIGATIONS. SPECIFICALLY, THE FIRM'S SUPERVISION SYSTEM
FAILED TO INCLUDE A REVIEW FOR NASDAQ SYMBOLS FOR WHICH IT WAS A REGISTERED MARKET MAKER AND WHERE THE FIRM'S RELEVANT SYSTEM
DID NOT GENERATE MMPO QUOTES FOR SECURITIES THAT WERE ISSUED WITH THE SAME SYMBOL AS PREVIOUSLY INACTIVE SECURITIES. AS A RESULT,
THE FIRM DID NOT DETECT THE SYSTEM RELATED CODING ISSUES THAT OCCURRED DURING THE REVIEW PERIOD. THE CONDUCT DESCRIBED IN THIS
PARAGRAPH CONSTITUTES A VIOLATION OF NASDAQ RULES 2010A AND 3010.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
05/20/2019
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 17,500.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE FIRM WAS CENSURED AND FINED $17,500 (COMPRISED OF $10,000 FOR THE VIOLATIONS OF NASDAQ RULE 4613(A), AND $7,500 FOR THE
VIOLATIONS OF NASDAQ RULES 2010A AND 3010).
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
SUBSEQUENT TO THE REVIEW PERIOD, THE FIRM UPDATED ITS SUPERVISORY SYSTEMS BY IMPLEMENTING A REPORT DESIGNED TO IDENTIFY SYMBOLS
IN WHICH THE FIRM DID NOT GENERATE A MMPO QUOTE, WHICH INCLUDES QUOTES IN PREVIOUSLY INACTIVE SECURITIES. THEREFORE,
ENFORCEMENT IS NOT RECOMMENDING AN UNDERTAKING.regulatory · block 3PDF pages 540–541
- Regulator name — filed text
- U.S. COMMODITY FUTURES TRADING COMMISSION
- Monetary/Fine Amount — filed text
- $ 300,000.00
- How was matter resolved — filed text
- Other
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING ANY OF THE FINDINGS OR CONCLUSIONS, THE FIRM CONSENTED TO (1) CEASE AND DESIST FROM VIOLATING SECTION 4G OF THE ACT, 7 U.S.C. 6G, AND REGULATIONS 1.31, 1.35, AND 166.3, 17 C.F.R. 1.31, 1.35, AND 166.3 (2018), (2) PAY A CIVIL MONETARY PENALTY FOR $300,000, AND (3) COMPLY WITH THE CONDITIONS AND UNDERTAKINGS SET FORTH IN THE OFFER.
Other filed details
Description of allegations — filed text
THE COMMODITY FUTURES TRADING COMMISSION ("COMMISSION") FOUND THAT FOR NEARLY THREE YEARS, THE FIRM, AT THAT TIME A REGISTERED FUTURES COMMISSION MERCHANT, FAILED TO PROMPTLY PRODUCE RELIABLE AUDIT TRAIL DATA REQUESTED BY THE DIVISION OF ENFORCEMENT AND FAILED TO DEVELOP AND DILIGENTLY ADMINISTER ADEQUATE PROCEDURES FOR RESPONDING TO ROUTINE REGULATORY REQUESTS. IN VIOLATION OF SECTION 4G OF THE ACT AND REGULATIONS 1.31, 1.35 AND 166.3.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING ANY OF THE FINDINGS OR CONCLUSIONS, THE FIRM CONSENTED TO (1) CEASE AND DESIST FROM VIOLATING SECTION 4G OF THE ACT, 7 U.S.C. 6G, AND REGULATIONS 1.31, 1.35, AND 166.3, 17 C.F.R. 1.31, 1.35, AND 166.3 (2018), (2) PAY A CIVIL MONETARY PENALTY FOR $300,000, AND (3) COMPLY WITH THE CONDITIONS AND UNDERTAKINGS SET FORTH IN THE OFFER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
U.S. COMMODITY FUTURES TRADING COMMISSION
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CEASE AND DESIST; UNDERTAKING; CONDITIONS
3.
Date Initiated (MM/DD/YYYY):
09/10/2019
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
CFTC DOCKET NO. 19-21
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE COMMODITY FUTURES TRADING COMMISSION ("COMMISSION") FOUND THAT FOR NEARLY THREE YEARS, THE FIRM, AT THAT TIME A REGISTERED
FUTURES COMMISSION MERCHANT, FAILED TO PROMPTLY PRODUCE RELIABLE AUDIT TRAIL DATA REQUESTED BY THE DIVISION OF ENFORCEMENT AND
FAILED TO DEVELOP AND DILIGENTLY ADMINISTER ADEQUATE PROCEDURES FOR RESPONDING TO ROUTINE REGULATORY REQUESTS. IN VIOLATION OF
SECTION 4G OF THE ACT AND REGULATIONS 1.31, 1.35 AND 166.3.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Other
11. Resolution Date (MM/DD/YYYY):
09/10/2019
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 300,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
CONDITIONS AND UNDERTAKINGS
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING ANY OF THE FINDINGS OR CONCLUSIONS, THE FIRM CONSENTED TO (1) CEASE AND DESIST FROM VIOLATING
SECTION 4G OF THE ACT, 7 U.S.C. 6G, AND REGULATIONS 1.31, 1.35, AND 166.3, 17 C.F.R. 1.31, 1.35, AND 166.3 (2018), (2) PAY A CIVIL
MONETARY PENALTY FOR $300,000, AND (3) COMPLY WITH THE CONDITIONS AND UNDERTAKINGS SET FORTH IN THE OFFER.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING ANY OF THE FINDINGS OR CONCLUSIONS, THE FIRM CONSENTED TO (1) CEASE AND DESIST FROM VIOLATING
SECTION 4G OF THE ACT, 7 U.S.C. 6G, AND REGULATIONS 1.31, 1.35, AND 166.3, 17 C.F.R. 1.31, 1.35, AND 166.3 (2018), (2) PAY A CIVIL MONETARY
PENALTY FOR $300,000, AND (3) COMPLY WITH THE CONDITIONS AND UNDERTAKINGS SET FORTH IN THE OFFER.regulatory · block 4PDF pages 541–544
- Regulator name — filed text
- FINRA
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM AGREED TO PAY RESTITUTION ESTIMATED TO BE AT LEAST $4 MILLION RELATING TO THE SALE OF CLASS C UNITS TO CERTAIN STATE 529 PLAN CUSTOMERS. FIRM CUSTOMERS INVESTED IN THE STATE 529 PLANS SPONSORED BY ILLINOIS, IOWA, MICHIGAN, NEBRASKA, RHODE ISLAND, WASHINGTON, D.C., AND WISCONSIN WILL NOT BE ENTITLED TO REMEDIATION UNDER THE AWC, DUE TO THE RESPECTIVE FEE STRUCTURES AND/OR SHARE CLASS CONVERSION FEATURES OF THOSE PLANS. IN RESOLVING THIS MATTER WITHOUT A MONETARY FINE, FINRA CREDITS THE FIRM FOR ITS EXTRAORDINARY COOPERATION, PROPOSAL OF BROAD REMEDIATION TO CUSTOMERS, AND ITS IMPLEMENTATION, PRIOR TO REGULATORY INTERVENTION OF CORRECTIVE MEASURES INCLUDING EXTABLISHING CERTAIN POLICIES PROCEDURES AND DISCLOSURES CONCERNING UNIT CLASS SUITABILITY WITH RESPECT TO 529 PLANS AVAILABLE FOR PURCHASE THROUGH THE FIRM. FINRA RECOGNIZES THE FIRM'S SETTLEMENT WITH THE STATE OF MAINE OFFICE OF SECURITIES AND THE APPROXIMATELY $19 MILLION IN RESTITUTION PROVIDED UNDER THE CONSENT ORDER.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM AND WSPS REASONABLY DESIGNED TO SUPERVISE RECOMMENDATIONS OF PARTICULAR SHARE CLASSSES OF 529 PLANS OFFERED BY STATE SPONSORS (REFERRED TO HEREIN AS THE STATE 529 PLANS). THE FINDINGS STATED THAT THE FIRM FAILED TO HAVE A REASONABLY DESIGNED SUPERVISORY SYSTEM AND WSPS REGARDING THE SALE OF 529 PLANS, INCLUDING THE SUITABILITY OF UNIT CLASS RECOMMENDATIONS. THE FIRM'S SUPERVISORY SYSTEM, INCLUDING WSPS, WAS NOT REASONABLY DESIGNED TO ENSURE THAT ITS REPRESENTATIVES WERE CONSIDERING HOW THE AGE OF THE BENEFICIARY MAY FACTOR INTO THE UNIT CLASS SUITABILITY DETERMINATION IN THE CONTEXT OF 529 PLAN INVESTMENTS. THE FIRM'S SUPERVISORY SYSTEM DID NOT REQUIRE REGISTERED REPRESENTATIVES OR SUPERVISORS TO EVALUATE BENEFICIARY AGE AND THE NUMBER OF YEARS UNTIL EXPECTED WITHDRAWALS, COMBINED WITH THE DIFFERENT FEES AND EXPENSES OF THE AVAILABLE UNIT CLASSES, TO ASSESS THE REASONABLENESS OF THE UNIT CLASS RECOMMENDATION. THE FIRM'S SUPERVISORY SYSTEM ALSO DID NOT INCLUDE REASONABLE MEASURES TO REQUIRE REGISTERED REPRESENTATIVES TO CONSIDER SALES CHARGE DISCOUNTS AND/OR WAIVERS BASED ON AGGREGATE CUSTOMER INVESTMENTS WHEN MAKING UNIT CLASS RECOMMENDATIONS. THE FIRM'S TRAINING MATERIALS DID NOT PROVIDE GUIDANCE TO ITS REGISTERED REPRESENTATIVES ON THESE ISSUES AND THUS WERE ALSO UNREASONABLE. THE FINDINGS ALSO STATED THAT THE FIRM VOLUNTARILY ADOPTED NEW POLICIES AND PROCEDURES CONCERNING 529 PLAN UNIT CLASS RECOMMENDATIONS. AMONG OTHER CHANGES THE FIRM GENERALLY LIMITED ITS REGISTERED REPRESENTATIVES TO RECOMMENDING CLASS A UNITS FOR 529 PLAN CUSTOMERS WITH DESIGNATED BENEFFICIARIES UNDER A CERTAIN AGE OR CUSTOMERS INVESTING $250,000 OR MORE. THE FIRM'S CUSTOMERS REMAIN FREE TO DIRECT THEIR UNIT CLASS SELECTION. THE FIRM ALSO ENHANCED ITS TRAINING TO DETAIL UNIT CLASS FEES AND EXPENSES AND IMPLEMENTED SEVERAL COMPLIANCE REPORTS-ALTERING SUPERVISORS TO CONTRIBUTIONS OUTSIDE THE FIRM'S UNIT CLASS POLICIES OR CLASS C UNIT CONTRIBUTIONS NEAR OR EXCEEDING POTENTIAL BREAK POINT DISCOUNTS. THE FIRM ALSO INSTITUTED AN ANNUAL DISCLOSURE PROCESS THROUGH WHICH IT NOTIFIES CERTAIN 529 PLAN CUSTOMERS THAT THEY MAY BENFIT FROM A DIFFERENT UNIT CLASS SELECTION FOR FUTURE PURCHASES.
Sanction detail — filed text
THE FIRM WAS CENSURED AND ORDERED TO PAY RESTITUTION, PLUS INTEREST, TO INVESTORS IDENTIFIED AS ELIGIBLE. IN RESOLVING THIS MATTER WITHOUT A MONETARY FINE, FINRA CREDITS THE FIRM FOR ITS EXTRAORDINARY COOPERATION.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Censure Other Sanctions: RESTITUTION; INTEREST 3. Date Initiated (MM/DD/YYYY): 11/06/2019 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2015044526701 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: SHARE CLASSES OF 529 PLANS 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM AND WSPS REASONABLY DESIGNED TO SUPERVISE RECOMMENDATIONS OF PARTICULAR SHARE CLASSSES OF 529 PLANS OFFERED BY STATE SPONSORS (REFERRED TO HEREIN AS THE STATE 529 PLANS). THE FINDINGS STATED THAT THE FIRM FAILED TO HAVE A REASONABLY DESIGNED SUPERVISORY SYSTEM AND WSPS REGARDING THE SALE OF 529 PLANS, INCLUDING THE SUITABILITY OF UNIT CLASS RECOMMENDATIONS. THE FIRM'S SUPERVISORY SYSTEM, INCLUDING WSPS, WAS NOT REASONABLY DESIGNED TO ENSURE THAT ITS REPRESENTATIVES WERE CONSIDERING HOW THE AGE OF THE BENEFICIARY MAY FACTOR INTO THE UNIT CLASS SUITABILITY DETERMINATION IN THE CONTEXT OF 529 PLAN INVESTMENTS. THE FIRM'S SUPERVISORY SYSTEM DID NOT REQUIRE REGISTERED REPRESENTATIVES OR SUPERVISORS TO EVALUATE BENEFICIARY AGE AND THE NUMBER OF YEARS UNTIL EXPECTED WITHDRAWALS, COMBINED WITH THE DIFFERENT FEES AND EXPENSES OF THE AVAILABLE UNIT CLASSES, TO ASSESS THE REASONABLENESS OF THE UNIT CLASS RECOMMENDATION. THE FIRM'S SUPERVISORY SYSTEM ALSO DID NOT INCLUDE REASONABLE MEASURES TO REQUIRE REGISTERED REPRESENTATIVES TO CONSIDER SALES CHARGE DISCOUNTS AND/OR WAIVERS BASED ON AGGREGATE CUSTOMER INVESTMENTS WHEN MAKING UNIT CLASS RECOMMENDATIONS. THE FIRM'S TRAINING MATERIALS DID NOT PROVIDE GUIDANCE TO ITS REGISTERED REPRESENTATIVES ON THESE ISSUES AND THUS WERE ALSO UNREASONABLE. THE FINDINGS ALSO STATED THAT THE FIRM VOLUNTARILY ADOPTED NEW POLICIES AND PROCEDURES CONCERNING 529 PLAN UNIT CLASS RECOMMENDATIONS. AMONG OTHER CHANGES THE FIRM GENERALLY LIMITED ITS REGISTERED REPRESENTATIVES TO RECOMMENDING CLASS A UNITS FOR 529 PLAN CUSTOMERS WITH DESIGNATED BENEFFICIARIES UNDER A CERTAIN AGE OR CUSTOMERS INVESTING $250,000 OR MORE. THE FIRM'S CUSTOMERS REMAIN FREE TO DIRECT THEIR UNIT CLASS SELECTION. THE FIRM ALSO ENHANCED ITS TRAINING TO DETAIL UNIT CLASS FEES AND EXPENSES AND IMPLEMENTED SEVERAL COMPLIANCE REPORTS-ALTERING SUPERVISORS TO CONTRIBUTIONS OUTSIDE THE FIRM'S UNIT CLASS POLICIES OR CLASS C UNIT CONTRIBUTIONS NEAR OR EXCEEDING POTENTIAL BREAK POINT DISCOUNTS. THE FIRM ALSO INSTITUTED AN ANNUAL DISCLOSURE PROCESS THROUGH WHICH IT NOTIFIES CERTAIN 529 PLAN CUSTOMERS THAT THEY MAY BENFIT FROM A DIFFERENT UNIT CLASS SELECTION FOR FUTURE PURCHASES. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 11/06/2019 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: PLUS INTEREST Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED AND ORDERED TO PAY RESTITUTION, PLUS INTEREST, TO INVESTORS IDENTIFIED AS ELIGIBLE. IN RESOLVING THIS MATTER WITHOUT A MONETARY FINE, FINRA CREDITS THE FIRM FOR ITS EXTRAORDINARY COOPERATION. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM AGREED TO PAY RESTITUTION ESTIMATED TO BE AT LEAST $4 MILLION RELATING TO THE SALE OF CLASS C UNITS TO CERTAIN STATE 529 PLAN CUSTOMERS. FIRM CUSTOMERS INVESTED IN THE STATE 529 PLANS SPONSORED BY ILLINOIS, IOWA, MICHIGAN, NEBRASKA, RHODE ISLAND, WASHINGTON, D.C., AND WISCONSIN WILL NOT BE ENTITLED TO REMEDIATION UNDER THE AWC, DUE TO THE RESPECTIVE FEE STRUCTURES AND/OR SHARE CLASS CONVERSION FEATURES OF THOSE PLANS. IN RESOLVING THIS MATTER WITHOUT A MONETARY FINE, FINRA CREDITS THE FIRM FOR ITS EXTRAORDINARY COOPERATION, PROPOSAL OF BROAD REMEDIATION TO CUSTOMERS, AND ITS IMPLEMENTATION, PRIOR TO REGULATORY INTERVENTION OF CORRECTIVE MEASURES INCLUDING EXTABLISHING CERTAIN POLICIES PROCEDURES AND DISCLOSURES CONCERNING UNIT CLASS SUITABILITY WITH RESPECT TO 529 PLANS AVAILABLE FOR PURCHASE THROUGH THE FIRM. FINRA RECOGNIZES THE FIRM'S SETTLEMENT WITH THE STATE OF MAINE OFFICE OF SECURITIES AND THE APPROXIMATELY $19 MILLION IN RESTITUTION PROVIDED UNDER THE CONSENT ORDER.
regulatory · block 5PDF pages 544–545
- Regulator name — filed text
- THE OPTIONS CLEARING CORPORATION
- Monetary/Fine Amount — filed text
- $ 10,000.00
- How was matter resolved — filed text
- Decision
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS CONTAINED IN THE CHARGES, THE FIRM CONSENTED TO THE ENTRY OF A FINAL DECISION PROVIDING FOR THE IMPOSITION OF A SANCTION AGAINST THE FIRM IN THE AMOUNT OF $10,000.
Other filed details
Description of allegations — filed text
THE OPTIONS CLEARING CORPORATION (OCC) FOUND THAT THE FIRM BREACHED THE LETTERS OF CREDIT THRESHOLD LIMITS IN VIOLATION OF OCC RULE 604.02.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS CONTAINED IN THE CHARGES, THE FIRM CONSENTED TO THE ENTRY OF A FINAL DECISION PROVIDING FOR THE IMPOSITION OF A SANCTION AGAINST THE FIRM IN THE AMOUNT OF $10,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) THE OPTIONS CLEARING CORPORATION 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 11/05/2019 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2019-14 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE OPTIONS CLEARING CORPORATION (OCC) FOUND THAT THE FIRM BREACHED THE LETTERS OF CREDIT THRESHOLD LIMITS IN VIOLATION OF OCC RULE 604.02. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Decision 11. Resolution Date (MM/DD/YYYY): 11/05/2019 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 10,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS CONTAINED IN THE CHARGES, THE FIRM CONSENTED TO THE ENTRY OF A FINAL DECISION PROVIDING FOR THE IMPOSITION OF A SANCTION AGAINST THE FIRM IN THE AMOUNT OF $10,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS CONTAINED IN THE CHARGES, THE FIRM CONSENTED TO THE ENTRY OF A FINAL DECISION PROVIDING FOR THE IMPOSITION OF A SANCTION AGAINST THE FIRM IN THE AMOUNT OF $10,000.
regulatory · block 6PDF pages 545–547
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 150,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
THE FIRM WAS CENSURED AND FINED $150,000.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT EXECUTED A MUNICIPAL SECURITIES' TRANSACTION WITH A CUSTOMER IN AN AMOUNT BELOW THE ISSUE'S MINIMUM DENOMINATION WITHOUT AN EXCEPTION. THE FINDINGS STATED THAT THE FIRM PROVIDED EVIDENCE THAT IT OFFERED TO RESCIND THE TRANSACTIONS TO ALL THE FIRM'S CUSTOMERS THAT CONTINUED TO HOLD THE POSITION. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO DISCLOSE TO ITS CUSTOMER ALL MATERIAL FACTS CONCERNING SOME MUNICIPAL SECURITIES TRANSACTIONS AT OR PRIOR TO THE TIME OF TRADE. SPECIFICALLY, THE FINDINGS STATED THAT THE FIRM FAILED TO INFORM ITS CUSTOMER, ORALLY OR IN WRITING, THAT THE MUNICIPAL SECURITIES TRANSACTION WAS IN AN AMOUNT BELOW THE ISSUE'S MINIMUM DENOMINATION AND THAT THIS MAY ADVERSELY AFFECT THE POSITION'S LIQUIDITY.
Sanction detail — filed text
THE FIRM WAS CENSURED AND FINED $150,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 01/03/2020 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2016049250601 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Debt - Municipal Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT EXECUTED A MUNICIPAL SECURITIES' TRANSACTION WITH A CUSTOMER IN AN AMOUNT BELOW THE ISSUE'S MINIMUM DENOMINATION WITHOUT AN EXCEPTION. THE FINDINGS STATED THAT THE FIRM PROVIDED EVIDENCE THAT IT OFFERED TO RESCIND THE TRANSACTIONS TO ALL THE FIRM'S CUSTOMERS THAT CONTINUED TO HOLD THE POSITION. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO DISCLOSE TO ITS CUSTOMER ALL MATERIAL FACTS CONCERNING SOME MUNICIPAL SECURITIES TRANSACTIONS AT OR PRIOR TO THE TIME OF TRADE. SPECIFICALLY, THE FINDINGS STATED THAT THE FIRM FAILED TO INFORM ITS CUSTOMER, ORALLY OR IN WRITING, THAT THE MUNICIPAL SECURITIES TRANSACTION WAS IN AN AMOUNT BELOW THE ISSUE'S MINIMUM DENOMINATION AND THAT THIS MAY ADVERSELY AFFECT THE POSITION'S LIQUIDITY. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 01/03/2020 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 150,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED AND FINED $150,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE FIRM WAS CENSURED AND FINED $150,000.
regulatory · block 7PDF pages 547–549
- Regulator name — filed text
- FINRA
- Monetary/Fine Amount — filed text
- $ 300,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
ON DECEMBER 26, 2019, THE FIRM AGREED TO ENTER INTO AN ACCEPTANCE, WAIVER & CONSENT (AWC) WITH FINRA WITHOUT ADMITTING TO DENYING THE FINDINGS. IN THE AWC, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, AND FAILED TO ESTABLISH, MAINTAIN, AND ENFORCE WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO ITS UNIFORM GIFTS TO MINORS ACT AND/OR THE UNIFORM TRANSFERS TO MINORS ACT (UTMA) ACCOUNTS. THE AWC FINDS THAT THE FIRM DID NOT ESTABLISH REASONABLE SYSTEMS OR PROCEDURES RELATED TO THE CUSTODIANS' OBLIGATION TO TIMELY TRANSFER CONTROL OVER THE CUSTODIAL PROPERTY TO THE BENEFICIARY. ACCORDING TO THE AWC, THE FOREGOING CONSTITUTED VIOLATIONS OF NASD RULE 3010 (A) AND 3010(B), AND FINRA RULES 3110(A), 3110(B), AND 2010. UNDER THE AWC, THE FIRM WAS CENSURED, FINED $300,000, ORDERED TO CERTIFY TO FINRA WITHIN 180 DAYS THAT IT HAS COMPLETED A REVIEW OF ITS POLICIES, SYSTEMS AND PROCEDURES REGARDING THE SUPERVISION OF CUSTODIAL AND GUARDIANSHIP ACCOUNTS FOR WHICH THE GUARDIANSHIP IS DEFINED BY THE AGE OF THE PROTECTED PARTY, AND ENSURE ITS POLICIES, SYSTEMS AND PROCEDURES ARE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS, REGULATIONS AND FINRA RULES.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, AND FAILED TO ESTABLISH, MAINTAIN, AND ENFORCE WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO ITS UNIFORM GIFTS TO MINORS ACT AND/OR THE UNIFORM TRANSFERS TO MINORS ACT (UTMA) ACCOUNTS. THE FIRM DID NOT ESTABLISH REASONABLE SYSTEMS OR PROCEDURES RELATED TO THE CUSTODIANS' OBLIGATION TO TIMELY TRANSFER CONTROL OVER THE CUSTODIAL PROPERTY TO THE BENEFICIARY. AS A RESULT, UTMA ACCOUNT CUSTODIANS AUTHORIZED TRANSACTIONS IN AT LEAST 15,366 UTMA ACCOUNTS HELD AT MERRILL LYNCH IN WHICH THE BENEFICIARIES HAD REACHED THE TERMINATION AGE.
Sanction detail — filed text
THE FIRM WAS CENSURED, FINED $300,000, ORDERED TO CERTIFY TO FINRA WITHIN 180 DAYS THAT IT HAS COMPLETED A REVIEW OF ITS POLICIES, SYSTEMS AND PROCEDURES REGARDING THE SUPERVISION OF CUSTODIAL AND GUARDIANSHIP ACCOUNTS FOR WHICH THE GUARDIANSHIP IS DEFINED BY THE AGE OF THE PROTECTED PARTY, AND ENSURE ITS POLICIES, SYSTEMS AND PROCEDURES ARE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS, REGULATIONS AND FINRA RULES. THE FINE WAS PAID ON 1/7/2020.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINRA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 12/26/2019 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2018059381801 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: UNIFORM GIFTS TO MINORS ACT AND/OR THE UNIFORM TRANSFERS TO MINORS ACT (UTMA) ACCOUNTS. 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, AND FAILED TO ESTABLISH, MAINTAIN, AND ENFORCE WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO ITS UNIFORM GIFTS TO MINORS ACT AND/OR THE UNIFORM TRANSFERS TO MINORS ACT (UTMA) ACCOUNTS. THE FIRM DID NOT ESTABLISH REASONABLE SYSTEMS OR PROCEDURES RELATED TO THE CUSTODIANS' OBLIGATION TO TIMELY TRANSFER CONTROL OVER THE CUSTODIAL PROPERTY TO THE BENEFICIARY. AS A RESULT, UTMA ACCOUNT CUSTODIANS AUTHORIZED TRANSACTIONS IN AT LEAST 15,366 UTMA ACCOUNTS HELD AT MERRILL LYNCH IN WHICH THE BENEFICIARIES HAD REACHED THE TERMINATION AGE. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 12/26/2019 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 300,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE FIRM WAS CENSURED, FINED $300,000, ORDERED TO CERTIFY TO FINRA WITHIN 180 DAYS THAT IT HAS COMPLETED A REVIEW OF ITS POLICIES, SYSTEMS AND PROCEDURES REGARDING THE SUPERVISION OF CUSTODIAL AND GUARDIANSHIP ACCOUNTS FOR WHICH THE GUARDIANSHIP IS DEFINED BY THE AGE OF THE PROTECTED PARTY, AND ENSURE ITS POLICIES, SYSTEMS AND PROCEDURES ARE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS, REGULATIONS AND FINRA RULES. THE FINE WAS PAID ON 1/7/2020. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). ON DECEMBER 26, 2019, THE FIRM AGREED TO ENTER INTO AN ACCEPTANCE, WAIVER & CONSENT (AWC) WITH FINRA WITHOUT ADMITTING TO DENYING THE FINDINGS. IN THE AWC, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, AND FAILED TO ESTABLISH, MAINTAIN, AND ENFORCE WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO ITS UNIFORM GIFTS TO MINORS ACT AND/OR THE UNIFORM TRANSFERS TO MINORS ACT (UTMA) ACCOUNTS. THE AWC FINDS THAT THE FIRM DID NOT ESTABLISH REASONABLE SYSTEMS OR PROCEDURES RELATED TO THE CUSTODIANS' OBLIGATION TO TIMELY TRANSFER CONTROL OVER THE CUSTODIAL PROPERTY TO THE BENEFICIARY. ACCORDING TO THE AWC, THE FOREGOING CONSTITUTED VIOLATIONS OF NASD RULE 3010 (A) AND 3010(B), AND FINRA RULES 3110(A), 3110(B), AND 2010. UNDER THE AWC, THE FIRM WAS CENSURED, FINED $300,000, ORDERED TO CERTIFY TO FINRA WITHIN 180 DAYS THAT IT HAS COMPLETED A REVIEW OF ITS POLICIES, SYSTEMS AND PROCEDURES REGARDING THE SUPERVISION OF CUSTODIAL AND GUARDIANSHIP ACCOUNTS FOR WHICH THE GUARDIANSHIP IS DEFINED BY THE AGE OF THE PROTECTED PARTY, AND ENSURE ITS POLICIES, SYSTEMS AND PROCEDURES ARE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS, REGULATIONS AND FINRA RULES.
regulatory · block 8PDF pages 549–551
- Regulator name — filed text
- UNITED STATES SECURITIES AND EXCHANGE COMMISSION
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
MERRILL LYNCH, PIERCE, FENNER & SMITH, INCORPORATED ("MERRILL LYNCH" OR "FIRM"), ALONG WITH OTHER INVESTMENT ADVISERS WHO VOLUNTARILY PARTICIPATED IN THE SEC'S SHARE CLASS SELECTION DISCLOSURE INITIATIVE, CONSENTED TO THE ENTRY OF AN ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTIONS 203(E) AND 203(K) OF THE INVESTMENT ADVISERS ACT OF 1940, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER (THE "ORDER") BY THE SEC, INSTITUTED PURSUANT TO SECTIONS 203(E) AND 203(K) OF THE ADVISERS ACT, WITHOUT ADMITTING OR DENYING THE FINDINGS THEREIN EXCEPT THOSE RELATED TO JURISDICTION AND THE SUBJECT MATTER OF THE PROCEEDINGS. THE ORDER ENTERED AGAINST MERRILL LYNCH ALLEGED THAT THE FIRM WILLFULLY VIOLATED SECTION 206(2) OF THE ADVISERS ACT AS A RESULT OF ITS INADEQUATE DISCLOSURE OF CONFLICTS OF INTEREST RELATED TO (A) ITS RECEIPT OF 12B-1 FEES, AND/OR (B) ITS SELECTION OF MUTUAL FUND SHARE CLASSES THAT PAY SUCH FEE. THE SEC DID NOT DID NOT IMPOSE A CIVIL PENALTY AGAINST MERRILL LYNCH IN RECOGNITION OF THE FACT THAT THE FIRM SELF-REPORTED THE ISSUE TO THE SEC. HOWEVER, MERRILL LYNCH WAS CENSURED, ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS OF SECTIONS 206(2) OF THE ADVISERS ACT, PAY DISGORGEMENT OF $297,394 AND PREJUDGMENT INTEREST OF $27,882, AND COMPLY WITH THE SEVERAL UNDERTAKINGS OF THE TERMS OF THE ORDER.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MLPFS" OR THE "FIRM") CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT BREACHED ITS FIDUCIARY DUTY AND HAD INADEQUATE DISCLOSES IN CONNECTION WITH ITS MUTUAL FUND SHARE CLASS SELECTION PRACTICES AND THE FEES THE FIRM RECEIVED PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940. THE ORDER FINDS THAT THE FIRM CHARGED 12B-1 FEES INSTEAD OF LOWER-COST SHARE CLASSES OF THE SAME FUNDS FOR WHICH CLIENTS WERE ELIGIBLE AND THAT THE FIRM RECEIVED 12B-1 FEES IN CONNECTION WITH THESE INVESTMENTS. THE ORDER ALSO FINDS THAT MLPFS FAILED TO DISCLOSE IN ITS FORM ADV OR OTHERWISE ITS CONFLICTS OF INTEREST RELATED TO ITS RECEIPT OF THE 12B-1 FEES AND/OR ITS SELECTION OF MUTUAL FUND SHARE CLASSES THAT PAY SUCH FEES.
Sanction detail — filed text
THE FIRM WAS CENSURED, ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND FUTURE VIOLATIONS OF SECTION 206(2) OF THE INVESTMENT ADVISERS ACT OF 1940 ("ADVISERS ACT"), ORDERED TO PAY DISGORGEMENT OF $297,394 AND PREJUDGMENT INTEREST OF $27,982 AND COMPLY WITH THE UNDERTAKINGS IN THE ORDER. THE FIRM WILL PAY THE DISGORGEMENT AND PREJUDGMENT INTEREST WITHIN THE TIME DESCRIBED IN THE SEC ORDER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
2.
Principal Sanction:
Cease and Desist
Other Sanctions:
CENSURE; DISGORGEMENT; UNDERTAKING
3.
Date Initiated (MM/DD/YYYY):
04/17/2020
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
3-19753
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Mutual Fund(s)
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MLPFS" OR THE "FIRM") CONSENTED TO
THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT BREACHED ITS FIDUCIARY DUTY AND HAD INADEQUATE DISCLOSES IN CONNECTION WITH
ITS MUTUAL FUND SHARE CLASS SELECTION PRACTICES AND THE FEES THE FIRM RECEIVED PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT
COMPANY ACT OF 1940. THE ORDER FINDS THAT THE FIRM CHARGED 12B-1 FEES INSTEAD OF LOWER-COST SHARE CLASSES OF THE SAME FUNDS FOR
WHICH CLIENTS WERE ELIGIBLE AND THAT THE FIRM RECEIVED 12B-1 FEES IN CONNECTION WITH THESE INVESTMENTS. THE ORDER ALSO FINDS THAT
MLPFS FAILED TO DISCLOSE IN ITS FORM ADV OR OTHERWISE ITS CONFLICTS OF INTEREST RELATED TO ITS RECEIPT OF THE 12B-1 FEES AND/OR ITS
SELECTION OF MUTUAL FUND SHARE CLASSES THAT PAY SUCH FEES.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Order
11. Resolution Date (MM/DD/YYYY):
04/17/2020
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
UNDERTAKING; PREJUDGMENT INTEREST
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE FIRM WAS CENSURED, ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND FUTURE VIOLATIONS OF
SECTION 206(2) OF THE INVESTMENT ADVISERS ACT OF 1940 ("ADVISERS ACT"), ORDERED TO PAY DISGORGEMENT OF $297,394 AND
PREJUDGMENT INTEREST OF $27,982 AND COMPLY WITH THE UNDERTAKINGS IN THE ORDER. THE FIRM WILL PAY THE DISGORGEMENT AND
PREJUDGMENT INTEREST WITHIN THE TIME DESCRIBED IN THE SEC ORDER.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
MERRILL LYNCH, PIERCE, FENNER & SMITH, INCORPORATED ("MERRILL LYNCH" OR "FIRM"), ALONG WITH OTHER INVESTMENT ADVISERS WHO
VOLUNTARILY PARTICIPATED IN THE SEC'S SHARE CLASS SELECTION DISCLOSURE INITIATIVE, CONSENTED TO THE ENTRY OF AN ORDER INSTITUTING
ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTIONS 203(E) AND 203(K) OF THE INVESTMENT ADVISERS ACT OF 1940,
MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER (THE "ORDER") BY THE SEC, INSTITUTED PURSUANT TO
SECTIONS 203(E) AND 203(K) OF THE ADVISERS ACT, WITHOUT ADMITTING OR DENYING THE FINDINGS THEREIN EXCEPT THOSE RELATED TO
JURISDICTION AND THE SUBJECT MATTER OF THE PROCEEDINGS. THE ORDER ENTERED AGAINST MERRILL LYNCH ALLEGED THAT THE FIRM WILLFULLY
VIOLATED SECTION 206(2) OF THE ADVISERS ACT AS A RESULT OF ITS INADEQUATE DISCLOSURE OF CONFLICTS OF INTEREST RELATED TO (A) ITS
RECEIPT OF 12B-1 FEES, AND/OR (B) ITS SELECTION OF MUTUAL FUND SHARE CLASSES THAT PAY SUCH FEE. THE SEC DID NOT DID NOT IMPOSE A
CIVIL PENALTY AGAINST MERRILL LYNCH IN RECOGNITION OF THE FACT THAT THE FIRM SELF-REPORTED THE ISSUE TO THE SEC. HOWEVER, MERRILL
LYNCH WAS CENSURED, ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS OF SECTIONS 206(2) OF THE ADVISERS
ACT, PAY DISGORGEMENT OF $297,394 AND PREJUDGMENT INTEREST OF $27,882, AND COMPLY WITH THE SEVERAL UNDERTAKINGS OF THE TERMS OF
THE ORDER.regulatory · block 9PDF pages 551–553
- Regulator name — filed text
- FINANCIAL INDUSTRY REGULATORY AUTHORITY
- Monetary/Fine Amount — filed text
- $ 150,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED $150,000. IN ADDITION, THE FIRM AGREED TO CERTIFY TO FINRA THAT THE INDIVIDUAL REFERRED TO IN THE AWC IS NOT ACTIVELY ENGAGED IN THE MANAGEMENT OF THE FIRM'S SECURITIES BUSINESS, OR HAS OBTAINED THE REQUISITE REGISTRATIONS.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT ALLOWED AN EXECUTIVE WITH ITS NON-FINRA MEMBER AFFILIATE TO FUNCTION AS A PRINCIPAL IN THE FIRM'S PRIME BROKERAGE BUSINESS WITHOUT BEING REGISTERED WITH FINRA. FINRA ALSO ALLEGED THAT THE INDIVIDUAL WAS ACTIVELY ENGAGED IN THE MANAGEMENT OF THE FIRM'S PRIME BROKERAGE BUSINESS IN THE UNITED STATES, AND EXERCISED OVERALL MANAGEMENT DECISION-MAKING AUTHORITY AND THAT THE FIRM ALLOWED THE INDIVIDUAL TO ACT AS A PRINCIPAL OF THE FIRM, BUT DID NOT ENSURE THE INDIVIDUAL WAS REGISTERED WITH FINRA AS A PRINCIPAL IN VIOLATION OF NASD RULE 1021 AND FINRA RULES 1220 AND 2010.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED $150,000. IN ADDITION, THE FIRM AGREED TO CERTIFY TO FINRA THAT THE INDIVIDUAL REFERRED TO IN THE AWC IS NOT ACTIVELY ENGAGED IN THE MANAGEMENT OF THE FIRM'S SECURITIES BUSINESS, OR HAS OBTAINED THE REQUISITE REGISTRATIONS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINANCIAL INDUSTRY REGULATORY AUTHORITY 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE; UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 05/13/2020 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2018058319801 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT ALLOWED AN EXECUTIVE WITH ITS NON-FINRA MEMBER AFFILIATE TO FUNCTION AS A PRINCIPAL IN THE FIRM'S PRIME BROKERAGE BUSINESS WITHOUT BEING REGISTERED WITH FINRA. FINRA ALSO ALLEGED THAT THE INDIVIDUAL WAS ACTIVELY ENGAGED IN THE MANAGEMENT OF THE FIRM'S PRIME BROKERAGE BUSINESS IN THE UNITED STATES, AND EXERCISED OVERALL MANAGEMENT DECISION-MAKING AUTHORITY AND THAT THE FIRM ALLOWED THE INDIVIDUAL TO ACT AS A PRINCIPAL OF THE FIRM, BUT DID NOT ENSURE THE INDIVIDUAL WAS REGISTERED WITH FINRA AS A PRINCIPAL IN VIOLATION OF NASD RULE 1021 AND FINRA RULES 1220 AND 2010. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 05/13/2020 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 150,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED $150,000. IN ADDITION, THE FIRM AGREED TO CERTIFY TO FINRA THAT THE INDIVIDUAL REFERRED TO IN THE AWC IS NOT ACTIVELY ENGAGED IN THE MANAGEMENT OF THE FIRM'S SECURITIES BUSINESS, OR HAS OBTAINED THE REQUISITE REGISTRATIONS. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED $150,000. IN ADDITION, THE FIRM AGREED TO CERTIFY TO FINRA THAT THE INDIVIDUAL REFERRED TO IN THE AWC IS NOT ACTIVELY ENGAGED IN THE MANAGEMENT OF THE FIRM'S SECURITIES BUSINESS, OR HAS OBTAINED THE REQUISITE REGISTRATIONS.
regulatory · block 10PDF pages 553–555
- Regulator name — filed text
- FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA)
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF THE FINDINGS THAT IT FAILED TO PROVIDE ACCOUNTS WITH MUTUAL FUND SALES CHARGE WAIVERS AND FEE REBATES TO WHICH CUSTOMERS WERE ENTITLED THROUGH RIGHTS OF REINSTATEMENT OFFERED BY MUTUAL FUND COMPANIES. MERRILL LYNCH WAS CENSURED AND ORDERED TO PAY RESTITUTION, PLUS INTEREST, TO AFFECTED CUSTOMERS IN THE TOTAL AMOUNT OF $7,225,700.12. SPECIFICALLY, ELIGIBLE CUSTOMERS PAID APPROXIMATELY $6 MILLION IN EXCESS SALES CHARGES AND FEES DURING THE PERIOD OF APRIL 2011 TO APRIL 2017. PRIOR TO THE EFFECTIVE DATE OF THE AWC, MERRILL LYNCH PAID FULL RESTITUTION, PLUS INTEREST, TO THE AFFECTED CUSTOMERS AND PROVIDED PROOF OF PAYMENT AND DOCUMENTATION OF ITS METHODOLOGY USED TO DETERMINE RESTITUTION TO FINRA. IN ENTERING AN AWC WITHOUT A MONETARY FINE, FINRA RECOGNIZED THE ACTIONS AND EXTRAORDINARY COOPERATION BY MERRILL LYNCH INCLUDING: (1) ENGAGING AN OUTSIDE CONSULTING FIRM TO CONDUCT A COMPLEX ANALYSIS TO IDENTIFY POTENTIALLY DISADVANTAGED CUSTOMERS AND CALCULATE TOTAL REMEDIATION; (2) INVESTIGATING THE EXTENT TO WHICH IT DID NOT PROVIDE RIGHTS OF REINSTATEMENT; (3) PROMPTLY ESTABLISHING A PLAN TO PROVIDE REMEDIATION, NOTIFYING THE DISADVANTAGED CUSTOMERS, AND PAYING RESTITUTION TO AFFECTED CUSTOMERS; (4) PROMPTLY REMEDIATING SUPERVISORY DEFICIENCIES WITH RESPECT TO RIGHTS OF REINSTATEMENT; AND (5) PROVIDING SUBSTANTIAL ASSISTANCE TO FINRA IN ITS INVESTIGATION.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH" OR "FIRM") CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO PROVIDE ACCOUNTS WITH MUTUAL FUND SALES CHARGE WAIVERS AND FEE REBATES TO WHICH CUSTOMERS WERE ENTITLED THROUGH RIGHTS OF REINSTATEMENT OFFERED BY MUTUAL FUND COMPANIES. THE ACCEPTANCE, WAIVER & CONSENT ("AWC") FINDS THAT AS A RESULT, ELIGIBLE CUSTOMERS PAID APPROXIMATELY $6 MILLION IN EXCESS SALES CHARGES AND FEES. THE AWC ALSO FINDS THAT THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SUPERVISORY SYSTEM AND PROCEDURES REASONABLY DESIGNED TO ENSURE THAT CUSTOMERS RECEIVE THESE SALES CHARGE WAIVERS AND REBATES, RELYING PRIMARILY ON INDIVIDUAL REGISTERED REPRESENTATIVES TO DETERMINE CUSTOMER ELIGIBILITY AND APPLY THEM MANUALLY WITHOUT REASONABLE SUPERVISORY OVERSIGHT. AS A RESULT OF THIS AND AN UNREASONABLE RELIANCE ON AN ALERT, THE FIRM FAILED TO DETECT THAT ITS REPRESENTATIVES DID NOT PROVIDE ACCOUNTS WITH SALES CHARGE WAIVERS AND REBATES TO WHICH THEY WERE ENTITLED PURSUANT TO THE RIGHTS OF THE REINSTATEMENT.
Sanction detail — filed text
THE FIRM WAS CENSURED AND ORDERED TO PAY RESTITUTION, PLUS INTEREST, TO AFFECTED CUSTOMERS IN THE TOTAL AMOUNT OF $7,225,700.12. PRIOR TO THE EFFECTIVE DATE OF THIS AWC, THE FIRM PAID FULL RESTITUTION, PLUS INTEREST, TO THE AFFECTED CUSTOMERS AND PROVIDED PROOF OF PAYMENT AND DOCUMENTATION OF ITS METHODOLOGY USED TO DETERMINE RESTITUTION TO FINRA.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA)
2.
Principal Sanction:
Censure
Other Sanctions:
DISGORGEMENT; RESTITUTION
3.
Date Initiated (MM/DD/YYYY):
06/04/2020
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
2017053494401
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Mutual Fund(s)
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH" OR "FIRM")
CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO PROVIDE ACCOUNTS WITH MUTUAL FUND SALES CHARGE
WAIVERS AND FEE REBATES TO WHICH CUSTOMERS WERE ENTITLED THROUGH RIGHTS OF REINSTATEMENT OFFERED BY MUTUAL FUND COMPANIES.
THE ACCEPTANCE, WAIVER & CONSENT ("AWC") FINDS THAT AS A RESULT, ELIGIBLE CUSTOMERS PAID APPROXIMATELY $6 MILLION IN EXCESS SALES
CHARGES AND FEES. THE AWC ALSO FINDS THAT THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SUPERVISORY SYSTEM AND PROCEDURES
REASONABLY DESIGNED TO ENSURE THAT CUSTOMERS RECEIVE THESE SALES CHARGE WAIVERS AND REBATES, RELYING PRIMARILY ON INDIVIDUAL
REGISTERED REPRESENTATIVES TO DETERMINE CUSTOMER ELIGIBILITY AND APPLY THEM MANUALLY WITHOUT REASONABLE SUPERVISORY OVERSIGHT.
AS A RESULT OF THIS AND AN UNREASONABLE RELIANCE ON AN ALERT, THE FIRM FAILED TO DETECT THAT ITS REPRESENTATIVES DID NOT PROVIDE
ACCOUNTS WITH SALES CHARGE WAIVERS AND REBATES TO WHICH THEY WERE ENTITLED PURSUANT TO THE RIGHTS OF THE REINSTATEMENT.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
06/04/2020
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE FIRM WAS CENSURED AND ORDERED TO PAY RESTITUTION, PLUS INTEREST, TO AFFECTED CUSTOMERS IN THE TOTAL AMOUNT OF
$7,225,700.12. PRIOR TO THE EFFECTIVE DATE OF THIS AWC, THE FIRM PAID FULL RESTITUTION, PLUS INTEREST, TO THE AFFECTED CUSTOMERS
AND PROVIDED PROOF OF PAYMENT AND DOCUMENTATION OF ITS METHODOLOGY USED TO DETERMINE RESTITUTION TO FINRA.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF THE FINDINGS THAT IT
FAILED TO PROVIDE ACCOUNTS WITH MUTUAL FUND SALES CHARGE WAIVERS AND FEE REBATES TO WHICH CUSTOMERS WERE ENTITLED THROUGH
RIGHTS OF REINSTATEMENT OFFERED BY MUTUAL FUND COMPANIES. MERRILL LYNCH WAS CENSURED AND ORDERED TO PAY RESTITUTION, PLUS
INTEREST, TO AFFECTED CUSTOMERS IN THE TOTAL AMOUNT OF $7,225,700.12. SPECIFICALLY, ELIGIBLE CUSTOMERS PAID APPROXIMATELY $6
MILLION IN EXCESS SALES CHARGES AND FEES DURING THE PERIOD OF APRIL 2011 TO APRIL 2017. PRIOR TO THE EFFECTIVE DATE OF THE AWC,
MERRILL LYNCH PAID FULL RESTITUTION, PLUS INTEREST, TO THE AFFECTED CUSTOMERS AND PROVIDED PROOF OF PAYMENT AND DOCUMENTATION
OF ITS METHODOLOGY USED TO DETERMINE RESTITUTION TO FINRA. IN ENTERING AN AWC WITHOUT A MONETARY FINE, FINRA RECOGNIZED THE
ACTIONS AND EXTRAORDINARY COOPERATION BY MERRILL LYNCH INCLUDING: (1) ENGAGING AN OUTSIDE CONSULTING FIRM TO CONDUCT A COMPLEX
ANALYSIS TO IDENTIFY POTENTIALLY DISADVANTAGED CUSTOMERS AND CALCULATE TOTAL REMEDIATION; (2) INVESTIGATING THE EXTENT TO WHICH
IT DID NOT PROVIDE RIGHTS OF REINSTATEMENT; (3) PROMPTLY ESTABLISHING A PLAN TO PROVIDE REMEDIATION, NOTIFYING THE DISADVANTAGED
CUSTOMERS, AND PAYING RESTITUTION TO AFFECTED CUSTOMERS; (4) PROMPTLY REMEDIATING SUPERVISORY DEFICIENCIES WITH RESPECT TO
RIGHTS OF REINSTATEMENT; AND (5) PROVIDING SUBSTANTIAL ASSISTANCE TO FINRA IN ITS INVESTIGATION.regulatory · block 11PDF pages 555–557
- Regulator name — filed text
- STATE OF CONNECTICUT DEPARTMENT OF BANKING
- Monetary/Fine Amount — filed text
- $ 150,000.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
THE BANKING COMMISSIONER ALLEGED THAT A FORMER SUPERVISOR AT MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPF&S) FAILED TO SUPERVISE A FORMER CONNECTICUT-BASED AGENT. THE AGENT ALLEGEDLY MODIFIED TRADE TICKETS AND ENGAGED IN UNAUTHORIZED TRADING THAT RESULTED IN FINANCIAL HARM TO CERTAIN CUSTOMERS AND ALLEGEDLY CAUSED MLPF&S TO MAINTAIN INACCURATE BOOKS AND RECORDS. MLPF&S TERMINATED THE FORMER SUPERVISOR AND FORMER AGENT AND PAID RESTITUTION OF $450,000 TO THE CONNECTICUT RESIDENT THAT SUFFERED FINANCIAL HARM DUE TO THE ACTIONS OF THE FORMER AGENT. WITHOUT ADMITTING OR DENYING ANY OF THE ALLEGATIONS OR FINDINGS, MLPF&S ENTERED INTO A CONSENT ORDER ON JUNE 23, 2020 IN WHICH IT AGREED TO (I) CEASE AND DESIST FROM VIOLATING SECTION 36B-14 OF THE ACT AND SECTION 36B-31-6F OF THE REGULATIONS AND TO COMPLY WITH THE ACT, ITS REGULATIONS, AND ANY ORDER UNDER THE ACT; (II) PAY AN ADMINISTRATIVE FINE OF $150,000 TO THE STATE OF CONNECTICUT, AND (III) PAY $250,000 TO THE STATE OF CONNECTICUT TO BE USED AT THE DISCRETION OF THE BANKING COMMISSIONER FOR INVESTOR EDUCATION, STAFF TRAINING, AND EDUCATION MATERIAL.
Other filed details
Description of allegations — filed text
THE COMMISSIONER ALLEGED THAT MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MLPF&S") VIOLATED SECTION 36B-14 OF THE CONNECTICUT UNIFORM SECURITIES ACT (THE "ACT") BY MAINTAINING INACCURATE BOOKS AND RECORDS. THE COMMISSIONER ALSO ALLEGED THAT MERRILL VIOLATED SECTION 36B-31-6F OF THE REGULATIONS OF CONNECTICUT STATE AGENCIES (THE "REGULATIONS") BY FAILING TO ENFORCE ITS ESTABLISHED PROCEDURES FOR SUPERVISING THE ACTIVITIES OF ITS AGENTS, INVESTMENT ADVISER AGENTS AND CONNECTICUT OFFICE OPERATIONS THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONS.
Sanction detail — filed text
ADMINISTRATIVE FINE OF $150,000 AND PAYMENT OF $250,000 WAS PAID ON JULY 2ND, 2020.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
STATE OF CONNECTICUT DEPARTMENT OF BANKING
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CEASE AND DESIST; PAYMENT OF $250,000 TO BE USED AT THE DISCRETION OF THE BANKING COMMISSIONER OF THE STATE OF CONNECTICUT
DEPARTMENT OF BANKING (THE "COMMISSIONER") FOR INVESTOR EDUCATION, STAFF TRAINING, AND EDUCATION MATERIAL.
3.
Date Initiated (MM/DD/YYYY):
06/23/2020
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
CO-20-8249-S
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE COMMISSIONER ALLEGED THAT MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MLPF&S") VIOLATED SECTION 36B-14 OF THE
CONNECTICUT UNIFORM SECURITIES ACT (THE "ACT") BY MAINTAINING INACCURATE BOOKS AND RECORDS. THE COMMISSIONER ALSO ALLEGED THAT
MERRILL VIOLATED SECTION 36B-31-6F OF THE REGULATIONS OF CONNECTICUT STATE AGENCIES (THE "REGULATIONS") BY FAILING TO ENFORCE ITS
ESTABLISHED PROCEDURES FOR SUPERVISING THE ACTIVITIES OF ITS AGENTS, INVESTMENT ADVISER AGENTS AND CONNECTICUT OFFICE
OPERATIONS THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONS.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Consent
11. Resolution Date (MM/DD/YYYY):
06/23/2020
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 150,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
PAYMENT OF $250,000 TO BE USED AT THE DISCRETION OF THE COMMISSIONER FOR INVESTOR EDUCATION, STAFF TRAINING, AND EDUCATION
MATERIAL.
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
ADMINISTRATIVE FINE OF $150,000 AND PAYMENT OF $250,000 WAS PAID ON JULY 2ND, 2020.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
THE BANKING COMMISSIONER ALLEGED THAT A FORMER SUPERVISOR AT MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPF&S) FAILED
TO SUPERVISE A FORMER CONNECTICUT-BASED AGENT. THE AGENT ALLEGEDLY MODIFIED TRADE TICKETS AND ENGAGED IN UNAUTHORIZED TRADING
THAT RESULTED IN FINANCIAL HARM TO CERTAIN CUSTOMERS AND ALLEGEDLY CAUSED MLPF&S TO MAINTAIN INACCURATE BOOKS AND RECORDS.
MLPF&S TERMINATED THE FORMER SUPERVISOR AND FORMER AGENT AND PAID RESTITUTION OF $450,000 TO THE CONNECTICUT RESIDENT THAT
SUFFERED FINANCIAL HARM DUE TO THE ACTIONS OF THE FORMER AGENT. WITHOUT ADMITTING OR DENYING ANY OF THE ALLEGATIONS OR FINDINGS,
MLPF&S ENTERED INTO A CONSENT ORDER ON JUNE 23, 2020 IN WHICH IT AGREED TO (I) CEASE AND DESIST FROM VIOLATING SECTION 36B-14 OF
THE ACT AND SECTION 36B-31-6F OF THE REGULATIONS AND TO COMPLY WITH THE ACT, ITS REGULATIONS, AND ANY ORDER UNDER THE ACT; (II) PAY
AN ADMINISTRATIVE FINE OF $150,000 TO THE STATE OF CONNECTICUT, AND (III) PAY $250,000 TO THE STATE OF CONNECTICUT TO BE USED AT THE
DISCRETION OF THE BANKING COMMISSIONER FOR INVESTOR EDUCATION, STAFF TRAINING, AND EDUCATION MATERIAL.regulatory · block 12PDF pages 557–559
- Regulator name — filed text
- NASDAQ STOCK MARKET LLC
- Monetary/Fine Amount — filed text
- $ 2,800.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED $2,800.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT, ACTING AS A DISTRIBUTION PARTICIPANT IN A COVERED SECURITY'S OFFERING, PURCHASED SHARES OF THE COVERED SECURITY FOR THE FIRM'S PROPRIETARY ACCOUNT DURING THE RESTRICTED PERIOD, IN VIOLATION OF RULE 101 OF REGULATION M PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934. NASDAQ STOCK MARKET LLC (NASDAQ) ALSO ALLEGED THAT, DURING THE RESTRICTED PERIOD, THE FIRM'S SUPERVISORY SYSTEM, INCLUDING ITS WRITTEN SUPERVISORY PROCEDURES, WAS NOT REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RULE 101, IN VIOLATION OF NASDAQ RULES 3010 AND 2010A. IN PARTICULAR, NASDAQ ALLEGED THAT THE FIRM'S REGULATION M WRITTEN SUPERVISORY PROCEDURES MANUALS FAILED TO ESTABLISH A SUPERVISORY SYSTEM TO DETERMINE WHETHER THE CASH DESK COMMUNICATED TO THE CONTROL ROOM THE NEED TO PLACE A SECURITY ON THE FIRM'S RESTRICTED SECURITY LIST. THE FIRM IMPLEMENTED PROCEDURES TO ADDRESS THIS DEFICIENCY FOLLOWING THE RESTRICTED PERIOD.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED $2,800.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) NASDAQ STOCK MARKET LLC 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 07/08/2020 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2016050809102 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: OTHER COVERED SECURITY 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT, ACTING AS A DISTRIBUTION PARTICIPANT IN A COVERED SECURITY'S OFFERING, PURCHASED SHARES OF THE COVERED SECURITY FOR THE FIRM'S PROPRIETARY ACCOUNT DURING THE RESTRICTED PERIOD, IN VIOLATION OF RULE 101 OF REGULATION M PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934. NASDAQ STOCK MARKET LLC (NASDAQ) ALSO ALLEGED THAT, DURING THE RESTRICTED PERIOD, THE FIRM'S SUPERVISORY SYSTEM, INCLUDING ITS WRITTEN SUPERVISORY PROCEDURES, WAS NOT REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RULE 101, IN VIOLATION OF NASDAQ RULES 3010 AND 2010A. IN PARTICULAR, NASDAQ ALLEGED THAT THE FIRM'S REGULATION M WRITTEN SUPERVISORY PROCEDURES MANUALS FAILED TO ESTABLISH A SUPERVISORY SYSTEM TO DETERMINE WHETHER THE CASH DESK COMMUNICATED TO THE CONTROL ROOM THE NEED TO PLACE A SECURITY ON THE FIRM'S RESTRICTED SECURITY LIST. THE FIRM IMPLEMENTED PROCEDURES TO ADDRESS THIS DEFICIENCY FOLLOWING THE RESTRICTED PERIOD. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 07/08/2020 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 2,800.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED $2,800. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED $2,800.
regulatory · block 13PDF pages 559–560
- Regulator name — filed text
- NASDAQ BX, INC.
- Monetary/Fine Amount — filed text
- $ 2,400.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED $2,400.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT, ACTING AS A DISTRIBUTION PARTICIPANT IN A COVERED SECURITY'S OFFERING, PURCHASED SHARES OF THE COVERED SECURITY FOR THE FIRM'S PROPRIETARY ACCOUNT DURING THE RESTRICTED PERIOD, IN VIOLATION OF RULE 101 OF REGULATION M PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934. NASDAQ BX, INC. (BX) ALSO ALLEGED THAT, DURING THE RESTRICTED PERIOD, THE FIRM'S SUPERVISORY SYSTEM, INCLUDING ITS WRITTEN SUPERVISORY PROCEDURES, WAS NOT REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RULE 101, IN VIOLATION OF BX RULES 3010 AND 2110. IN PARTICULAR, BX ALLEGED THAT THE FIRM'S REGULATION M WRITTEN SUPERVISORY PROCEDURES MANUALS FAILED TO ESTABLISH A SUPERVISORY SYSTEM TO DETERMINE WHETHER THE CASH DESK COMMUNICATED TO THE CONTROL ROOM THE NEED TO PLACE A SECURITY ON THE FIRM'S RESTRICTED SECURITY LIST. THE FIRM IMPLEMENTED PROCEDURES TO ADDRESS THIS DEFICIENCY FOLLOWING THE RESTRICTED PERIOD.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED $2,400.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) NASDAQ BX, INC. 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 07/08/2020 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2016050809101 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: OTHER COVERED SECURITY 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT, ACTING AS A DISTRIBUTION PARTICIPANT IN A COVERED SECURITY'S OFFERING, PURCHASED SHARES OF THE COVERED SECURITY FOR THE FIRM'S PROPRIETARY ACCOUNT DURING THE RESTRICTED PERIOD, IN VIOLATION OF RULE 101 OF REGULATION M PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934. NASDAQ BX, INC. (BX) ALSO ALLEGED THAT, DURING THE RESTRICTED PERIOD, THE FIRM'S SUPERVISORY SYSTEM, INCLUDING ITS WRITTEN SUPERVISORY PROCEDURES, WAS NOT REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RULE 101, IN VIOLATION OF BX RULES 3010 AND 2110. IN PARTICULAR, BX ALLEGED THAT THE FIRM'S REGULATION M WRITTEN SUPERVISORY PROCEDURES MANUALS FAILED TO ESTABLISH A SUPERVISORY SYSTEM TO DETERMINE WHETHER THE CASH DESK COMMUNICATED TO THE CONTROL ROOM THE NEED TO PLACE A SECURITY ON THE FIRM'S RESTRICTED SECURITY LIST. THE FIRM IMPLEMENTED PROCEDURES TO ADDRESS THIS DEFICIENCY FOLLOWING THE RESTRICTED PERIOD. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 07/08/2020 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 2,400.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED $2,400. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED $2,400.
regulatory · block 14PDF pages 560–562
- Regulator name — filed text
- STATE OF VERMONT DEPARTMENT OF FINANCIAL REGULATION
- Monetary/Fine Amount — filed text
- $ 125,000.00
- How was matter resolved — filed text
- Stipulation and Consent
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, EXCEPT THAT MERRILL LYNCH ENTERED INTO A JUNE 23, 2016 U.S. SECURITIES AND EXCHANGE COMMISSION (THE "SEC") ORDER INSTITUTING CEASE AND DESIST PROCEEDINGS PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933, MAKING FINDINGS AND IMPOSING CEASE AND DESIST ORDER (THE "SEC ORDER"), MERRILL LYNCH ENTERED INTO A STIPULATION AND CONSENT ORDER WITH VERMONT, CONSENTING TO SANCTIONS AND TO THE ENTRY OF FINDINGS THAT MERRILL LYNCH MAY BE DISCIPLINED UNDER 9 V.S.A. § 5412(D)(12) (THE "ACT") FOR BEING THE SUBJECT OF THE SEC ORDER. THE FIRM WAS ORDERED TO PAY AN ADMINISTRATIVE PENALTY OF $125,000 WITHIN SIXTY DAYS OF THE ENTRY INTO THE STIPULATION AND CONSENT ORDER.
Other filed details
Description of allegations — filed text
PURSUANT TO 9 V.S.A § 5602(A), THE VERMONT DEPARTMENT OF FINANCIAL REGULATION (THE "DEPARTMENT") ALLEGED THAT MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH") ENTERED A JUNE 23, 2016 U.S. SECURITIES AND EXCHANGE COMMISSION (THE "SEC") ORDER INSTITUTING CEASE AND DESIST PROCEEDINGS PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933, MAKING FINDINGS AND IMPOSING CEASE AND DESIST ORDER (THE "SEC ORDER") AGAINST MERRILL LYNCH. THE CONDUCT INVESTIGATED RELATED TO THE PURCHASE BY VERMONT RESIDENTS OF STRATEGIC RETURN NOTES LINKED TO INVESTABLE VOLATILITY INDEX ("SRNS"). THE DEPARTMENT ALLEGED THAT THE SRNS WERE PURCHASED BY 26 VERMONT INVESTORS AND THAT THE OFFERING MATERIALS THAT WERE THE SUBJECT OF THE SEC ORDER WERE THE SAME AS THOSE AVAILABLE TO VERMONT INVESTORS.
Sanction detail — filed text
THE FIRM WAS ORDERED TO PAY AN ADMINISTRATIVE PENALTY OF $125,000. THE FIRM WILL PAY THE ADMINISTRATIVE PENALTY WITHIN SIXTY DAYS OF THE STIPULATION AND CONSENT ORDER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
STATE OF VERMONT DEPARTMENT OF FINANCIAL REGULATION
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
3.
Date Initiated (MM/DD/YYYY):
04/30/2020
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
20-005-S
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
STRATEGIC RETURN NOTES
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
PURSUANT TO 9 V.S.A § 5602(A), THE VERMONT DEPARTMENT OF FINANCIAL REGULATION (THE "DEPARTMENT") ALLEGED THAT MERRILL LYNCH,
PIERCE, FENNER & SMITH INCORPORATED ("MERRILL LYNCH") ENTERED A JUNE 23, 2016 U.S. SECURITIES AND EXCHANGE COMMISSION (THE "SEC")
ORDER INSTITUTING CEASE AND DESIST PROCEEDINGS PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933, MAKING FINDINGS AND
IMPOSING CEASE AND DESIST ORDER (THE "SEC ORDER") AGAINST MERRILL LYNCH. THE CONDUCT INVESTIGATED RELATED TO THE PURCHASE BY
VERMONT RESIDENTS OF STRATEGIC RETURN NOTES LINKED TO INVESTABLE VOLATILITY INDEX ("SRNS"). THE DEPARTMENT ALLEGED THAT THE SRNS
WERE PURCHASED BY 26 VERMONT INVESTORS AND THAT THE OFFERING MATERIALS THAT WERE THE SUBJECT OF THE SEC ORDER WERE THE SAME AS
THOSE AVAILABLE TO VERMONT INVESTORS.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Stipulation and Consent
11. Resolution Date (MM/DD/YYYY):
04/30/2020
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 125,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE FIRM WAS ORDERED TO PAY AN ADMINISTRATIVE PENALTY OF $125,000. THE FIRM WILL PAY THE ADMINISTRATIVE PENALTY WITHIN SIXTY
DAYS OF THE STIPULATION AND CONSENT ORDER.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE FINDINGS, EXCEPT THAT MERRILL LYNCH ENTERED INTO A JUNE 23, 2016 U.S. SECURITIES AND EXCHANGE
COMMISSION (THE "SEC") ORDER INSTITUTING CEASE AND DESIST PROCEEDINGS PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933,
MAKING FINDINGS AND IMPOSING CEASE AND DESIST ORDER (THE "SEC ORDER"), MERRILL LYNCH ENTERED INTO A STIPULATION AND CONSENT
ORDER WITH VERMONT, CONSENTING TO SANCTIONS AND TO THE ENTRY OF FINDINGS THAT MERRILL LYNCH MAY BE DISCIPLINED UNDER 9 V.S.A. §
5412(D)(12) (THE "ACT") FOR BEING THE SUBJECT OF THE SEC ORDER. THE FIRM WAS ORDERED TO PAY AN ADMINISTRATIVE PENALTY OF $125,000
WITHIN SIXTY DAYS OF THE ENTRY INTO THE STIPULATION AND CONSENT ORDER.regulatory · block 15PDF pages 562–564
- Regulator name — filed text
- FINANCIAL INDUSTRY REGULATORY AUTHORITY
- Monetary/Fine Amount — filed text
- $ 150,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED $150,000.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT (1) REPORTED SHORT SALES TO A TRADE REPORTING FACILITY (TRF) WITHOUT A REQUIRED SHORT SALE INDICATOR IN VIOLATION OF FINRA RULES 6182 AND 2010, (2) INCORRECTLY MARKED PRINCIPAL SELL ORDERS AS LONG SALES, WHEN THE FIRM SHOULD HAVE MARKED THE ORDERS AS SHORT SALES IN VIOLATION OF RULE 200(G) OF REGULATION SHO AND FINRA RULE 2010, (3) FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH FINRA RULE 6182 AND RULE 200(G) OF REGULATION SHO, IN VIOLATION OF FINRA RULES 3110 (FOR CONDUCT OCCURRING ON OR AFTER DECEMBER 1, 2014) AND 2010 AND NASD RULE 3010 (FOR CONDUCT OCCURRING PRIOR TO DECEMBER 1, 2014), (4) FAILED TO ESTABLISH, MAINTAIN, AND ENFORCE WRITTEN POLICIES AND PROCEDURES REASONABLY DESIGNED TO PREVENT THE EXECUTION OR DISPLAY OF SHORT SALE ORDERS AT PRICES AT OR BELOW THE NATIONAL BEST BID DURING A SHORT SALE CIRCUIT BREAKER, IN VIOLATION OF RULE 201(B) OF REGULATION SHO, FINRA RULES 2010 AND 3110 (FOR CONDUCT OCCURRING ON OR AFTER DECEMBER 1, 2014) AND NASD RULE 3010 (FOR CONDUCT OCCURRING PRIOR TO DECEMBER 1, 2014), AND (5) REPORTED CERTAIN NON-MEDIA TRANSACTIONS IN NATIONAL MARKET SYSTEM EQUITY SECURITIES TO THE FINRA/NASDAQ TRADE REPORTING FACILITY WITH INACCURATE CAPACITY CODES (THE TRANSACTIONS WERE INCORRECTLY REPORTED AS PRINCIPAL TRANSACTIONS, WHEN THEY SHOULD HAVE BEEN REPORTED AS RISKLESS PRINCIPAL TRANSACTIONS), IN VIOLATION OF FINRA RULES 7230A AND 2010 (FOR CONDUCT OCCURRING ON OR AFTER DECEMBER 15, 2008) AND NASD RULES 6130 AND 2110 (FOR CONDUCT OCCURRING PRIOR TO DECEMBER 15, 2008).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED $150,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINANCIAL INDUSTRY REGULATORY AUTHORITY 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 07/22/2020 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2015045603201 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: UNSPECIFIED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT (1) REPORTED SHORT SALES TO A TRADE REPORTING FACILITY (TRF) WITHOUT A REQUIRED SHORT SALE INDICATOR IN VIOLATION OF FINRA RULES 6182 AND 2010, (2) INCORRECTLY MARKED PRINCIPAL SELL ORDERS AS LONG SALES, WHEN THE FIRM SHOULD HAVE MARKED THE ORDERS AS SHORT SALES IN VIOLATION OF RULE 200(G) OF REGULATION SHO AND FINRA RULE 2010, (3) FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH FINRA RULE 6182 AND RULE 200(G) OF REGULATION SHO, IN VIOLATION OF FINRA RULES 3110 (FOR CONDUCT OCCURRING ON OR AFTER DECEMBER 1, 2014) AND 2010 AND NASD RULE 3010 (FOR CONDUCT OCCURRING PRIOR TO DECEMBER 1, 2014), (4) FAILED TO ESTABLISH, MAINTAIN, AND ENFORCE WRITTEN POLICIES AND PROCEDURES REASONABLY DESIGNED TO PREVENT THE EXECUTION OR DISPLAY OF SHORT SALE ORDERS AT PRICES AT OR BELOW THE NATIONAL BEST BID DURING A SHORT SALE CIRCUIT BREAKER, IN VIOLATION OF RULE 201(B) OF REGULATION SHO, FINRA RULES 2010 AND 3110 (FOR CONDUCT OCCURRING ON OR AFTER DECEMBER 1, 2014) AND NASD RULE 3010 (FOR CONDUCT OCCURRING PRIOR TO DECEMBER 1, 2014), AND (5) REPORTED CERTAIN NON-MEDIA TRANSACTIONS IN NATIONAL MARKET SYSTEM EQUITY SECURITIES TO THE FINRA/NASDAQ TRADE REPORTING FACILITY WITH INACCURATE CAPACITY CODES (THE TRANSACTIONS WERE INCORRECTLY REPORTED AS PRINCIPAL TRANSACTIONS, WHEN THEY SHOULD HAVE BEEN REPORTED AS RISKLESS PRINCIPAL TRANSACTIONS), IN VIOLATION OF FINRA RULES 7230A AND 2010 (FOR CONDUCT OCCURRING ON OR AFTER DECEMBER 15, 2008) AND NASD RULES 6130 AND 2110 (FOR CONDUCT OCCURRING PRIOR TO DECEMBER 15, 2008). 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 07/22/2020 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 150,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED $150,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WAS CENSURED AND FINED $150,000.
regulatory · block 16PDF pages 564–566
- Regulator name — filed text
- STATE OF NEW HAMPSHIRE BUREAU OF SECURITIES REGULATION
- Monetary/Fine Amount — filed text
- $ 1,750,000.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FACTS, VIOLATIONS OR STATEMENTS OF LAW, THE FIRM WAS ORDERED TO (1) CEASE AND DESIST FROM ANY VIOLATIONS OF N.H. RSA 421-B, (2) PAY AN ADMINISTRATIVE FINE OF $1,750,000, (3) PAY COSTS OF $250,000, AND (4) UPON THE EXECUTION OF THE CONSENT ORDER AND THE CONTEMPORANEOUS EXECUTION OF A PRIVATE SETTLEMENT AGREEMENT TO RESOLVE AN INVESTOR'S ARBITRATION CLAIMS, TO PAY RESTITUTION TO THE INVESTOR IN THE AMOUNT OF $24,250,000 TO RESOLVE THE INVESTOR'S ARBITRATION CLAIMS. THE FINE, COSTS, AND THE RESTITUTION WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE CONSENT ORDER.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FACTS, VIOLATIONS OR STATEMENTS OF LAW, THE FIRM CONSENTED TO THE ENTRY OF A CONSENT ORDER THAT ALLEGED THE FIRM VIOLATED RSA 421-B:8, X (PRIOR TO JANUARY 1, 2016) AND RSA 421-B:4-406(K) (ON OR AFTER JANUARY 1, 2016) FOR FAILING TO ABIDE BY FINRA RULE 3110; AND VIOLATED RSA 421-B:10, I(A) AND (B)(10) (PRIOR TO JANUARY 1, 2016) AND RSA 421-B:4-412(D)(9) (ON OR AFTER JANUARY 1, 2016) FOR FAILING TO DETECT AND REASONABLY SUPERVISE A FORMER REGISTERED REPRESENTATIVE'S OVERCHARGING AN INVESTOR, EXCESSIVE TRADING, MISMARKED CONFIRMATIONS, AND UNSUITABLE TRADING OF IPOS AND INVERSE AND LEVERAGED ETFS.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FACTS, VIOLATIONS OR STATEMENTS OF LAW, THE FIRM WAS ORDERED TO (1) CEASE AND DESIST FROM ANY VIOLATIONS OF N.H. RSA 421-B, (2) PAY AN ADMINISTRATIVE FINE OF $1,750,000, (3) PAY COSTS OF $250,000, AND (4) UPON THE EXECUTION OF THE CONSENT ORDER AND THE CONTEMPORANEOUS EXECUTION OF A PRIVATE SETTLEMENT AGREEMENT TO RESOLVE AN INVESTOR'S ARBITRATION CLAIMS, TO PAY RESTITUTION TO THE INVESTOR IN THE AMOUNT OF $24,250,000 TO RESOLVE THE INVESTOR'S ARBITRATION CLAIMS. THE FINE, COSTS, AND THE RESTITUTION WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE CONSENT ORDER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) STATE OF NEW HAMPSHIRE BUREAU OF SECURITIES REGULATION 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CEASE AND DESIST; COSTS; RESTITUTION 3. Date Initiated (MM/DD/YYYY): 12/07/2020 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: COM2019-000 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Equity Listed (Common & Preferred Stock) Other Product Types: INVERSE AND LEVERAGED EXCHANGE TRADED FUNDS (ETFS) AND INITIAL PUBLIC OFFERINGS (IPOS). 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FACTS, VIOLATIONS OR STATEMENTS OF LAW, THE FIRM CONSENTED TO THE ENTRY OF A CONSENT ORDER THAT ALLEGED THE FIRM VIOLATED RSA 421-B:8, X (PRIOR TO JANUARY 1, 2016) AND RSA 421-B:4-406(K) (ON OR AFTER JANUARY 1, 2016) FOR FAILING TO ABIDE BY FINRA RULE 3110; AND VIOLATED RSA 421-B:10, I(A) AND (B)(10) (PRIOR TO JANUARY 1, 2016) AND RSA 421-B:4-412(D)(9) (ON OR AFTER JANUARY 1, 2016) FOR FAILING TO DETECT AND REASONABLY SUPERVISE A FORMER REGISTERED REPRESENTATIVE'S OVERCHARGING AN INVESTOR, EXCESSIVE TRADING, MISMARKED CONFIRMATIONS, AND UNSUITABLE TRADING OF IPOS AND INVERSE AND LEVERAGED ETFS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Consent 11. Resolution Date (MM/DD/YYYY): 12/07/2020 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 1,750,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: THE FIRM AGREED TO PAY COSTS OF $250,000. Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FACTS, VIOLATIONS OR STATEMENTS OF LAW, THE FIRM WAS ORDERED TO (1) CEASE AND DESIST FROM ANY VIOLATIONS OF N.H. RSA 421-B, (2) PAY AN ADMINISTRATIVE FINE OF $1,750,000, (3) PAY COSTS OF $250,000, AND (4) UPON THE EXECUTION OF THE CONSENT ORDER AND THE CONTEMPORANEOUS EXECUTION OF A PRIVATE SETTLEMENT AGREEMENT TO RESOLVE AN INVESTOR'S ARBITRATION CLAIMS, TO PAY RESTITUTION TO THE INVESTOR IN THE AMOUNT OF $24,250,000 TO RESOLVE THE INVESTOR'S ARBITRATION CLAIMS. THE FINE, COSTS, AND THE RESTITUTION WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE CONSENT ORDER. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FACTS, VIOLATIONS OR STATEMENTS OF LAW, THE FIRM WAS ORDERED TO (1) CEASE AND DESIST FROM ANY VIOLATIONS OF N.H. RSA 421-B, (2) PAY AN ADMINISTRATIVE FINE OF $1,750,000, (3) PAY COSTS OF $250,000, AND (4) UPON THE EXECUTION OF THE CONSENT ORDER AND THE CONTEMPORANEOUS EXECUTION OF A PRIVATE SETTLEMENT AGREEMENT TO RESOLVE AN INVESTOR'S ARBITRATION CLAIMS, TO PAY RESTITUTION TO THE INVESTOR IN THE AMOUNT OF $24,250,000 TO RESOLVE THE INVESTOR'S ARBITRATION CLAIMS. THE FINE, COSTS, AND THE RESTITUTION WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE CONSENT ORDER.
regulatory · block 17PDF pages 566–568
- Regulator name — filed text
- NYSE ARCA, INC. (NYSE ARCA)
- Monetary/Fine Amount — filed text
- $ 90,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
DURING THE PERIOD OF APPROXIMATELY SEPTEMBER 1, 2013 THROUGH JUNE 2016 (THE "RELEVANT PERIOD"), AND WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPF&S) DID NOT ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE NYSE ARCA RULES. DURING THE RELEVANT PERIOD, THE FIRM'S SYSTEMS AND PROCEDURES FOR DESIGNATING AND TRAINING PUBLIC AND PRIVATE SIDE PERSONNEL, SUPERVISING COMMUNICATIONS BETWEEN THEM, AND ESCALATING COMMUNICATIONS THAT DISCLOSED POTENTIAL MATERIAL NONPUBLIC INFORMATION ("MNPI") WERE NOT REASONABLE. IN PARTICULAR, AND DURING THE RELEVANT PERIOD, CERTAIN PERSONNEL IN ONE SUB-GROUP WHO WERE RE-DESIGNATED FROM PUBLIC SIDE TO PRIVATE SIDE UNDER THE FIRM'S POLICIES DID NOT RECEIVE REASONABLE TRAINING REGARDING THE RESPONSIBILITIES OF PRIVATE SIDE PERSONNEL. THE FIRM ALSO DID NOT REASONABLY ENFORCE ITS PROCEDURES DURING THE RELEVANT PERIOD REQUIRING FUNCTIONAL AND PHYSICAL SEPARATION OF PUBLIC AND PRIVATE SIDE PERSONNEL WITHIN THE SUB-GROUP. ALTHOUGH THE FIRM HAD ELECTRONIC COMMUNICATION REVIEW PROCEDURES DURING THE RELEVANT PERIOD, THE PROCEDURES DID NOT DESCRIBE A REASONABLE PROCESS FOR ESCALATING FOR FURTHER REVIEW COMMUNICATIONS THAT CONTAINED POTENTIAL MNPI. THE FIRM ENHANCED ITS PROCEDURES IN JUNE 2016 TO ADDRESS THE ISSUES IDENTIFIED. BASED ON THE FOREGOING, MLPF&S AGREED TO A CENSURE AND A FINE OF $90,000 TO NYSE ARCA.
Other filed details
Description of allegations — filed text
DURING THE PERIOD OF APPROXIMATELY SEPTEMBER 1, 2013 THROUGH JUNE 2016, AND WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED DID NOT REASONABLY SUPERVISE SPECIFIED PUBLIC AND PRIVATE SIDE EMPLOYEE DESIGNATIONS AND/OR COMMUNICATIONS IN ONE BUSINESS UNIT UNDER THE FIRM'S POLICIES AND PROCEDURES IN CONTRAVENTION OF NYSE ARCA RULES.
Sanction detail — filed text
THE FIRM AGREED TO PAY A FINE OF $90,000 TO NYSE ARCA.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
NYSE ARCA, INC. (NYSE ARCA)
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE
3.
Date Initiated (MM/DD/YYYY):
03/30/2021
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
MATTER NOS. 2013038684002
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
EXCHANGE TRADED NOTE
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
DURING THE PERIOD OF APPROXIMATELY SEPTEMBER 1, 2013 THROUGH JUNE 2016, AND WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED DID NOT REASONABLY SUPERVISE SPECIFIED PUBLIC AND PRIVATE SIDE EMPLOYEE DESIGNATIONS
AND/OR COMMUNICATIONS IN ONE BUSINESS UNIT UNDER THE FIRM'S POLICIES AND PROCEDURES IN CONTRAVENTION OF NYSE ARCA RULES.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
03/30/2021
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 90,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
THE FIRM AGREED TO PAY A FINE OF $90,000 TO NYSE ARCA.
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE FIRM AGREED TO PAY A FINE OF $90,000 TO NYSE ARCA.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
DURING THE PERIOD OF APPROXIMATELY SEPTEMBER 1, 2013 THROUGH JUNE 2016 (THE "RELEVANT PERIOD"), AND WITHOUT ADMITTING OR DENYING
THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPF&S) DID NOT ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM
REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE NYSE ARCA RULES. DURING THE RELEVANT PERIOD, THE FIRM'S SYSTEMS AND
PROCEDURES FOR DESIGNATING AND TRAINING PUBLIC AND PRIVATE SIDE PERSONNEL, SUPERVISING COMMUNICATIONS BETWEEN THEM, AND
ESCALATING COMMUNICATIONS THAT DISCLOSED POTENTIAL MATERIAL NONPUBLIC INFORMATION ("MNPI") WERE NOT REASONABLE. IN PARTICULAR,
AND DURING THE RELEVANT PERIOD, CERTAIN PERSONNEL IN ONE SUB-GROUP WHO WERE RE-DESIGNATED FROM PUBLIC SIDE TO PRIVATE SIDE
UNDER THE FIRM'S POLICIES DID NOT RECEIVE REASONABLE TRAINING REGARDING THE RESPONSIBILITIES OF PRIVATE SIDE PERSONNEL. THE FIRM
ALSO DID NOT REASONABLY ENFORCE ITS PROCEDURES DURING THE RELEVANT PERIOD REQUIRING FUNCTIONAL AND PHYSICAL SEPARATION OF
PUBLIC AND PRIVATE SIDE PERSONNEL WITHIN THE SUB-GROUP. ALTHOUGH THE FIRM HAD ELECTRONIC COMMUNICATION REVIEW PROCEDURES
DURING THE RELEVANT PERIOD, THE PROCEDURES DID NOT DESCRIBE A REASONABLE PROCESS FOR ESCALATING FOR FURTHER REVIEW
COMMUNICATIONS THAT CONTAINED POTENTIAL MNPI. THE FIRM ENHANCED ITS PROCEDURES IN JUNE 2016 TO ADDRESS THE ISSUES IDENTIFIED.
BASED ON THE FOREGOING, MLPF&S AGREED TO A CENSURE AND A FINE OF $90,000 TO NYSE ARCA.regulatory · block 18PDF pages 568–570
- Regulator name — filed text
- FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA)
- Monetary/Fine Amount — filed text
- $ 90,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
DURING THE PERIOD OF APPROXIMATELY SEPTEMBER 1, 2013 THROUGH JUNE 2016 (THE "RELEVANT PERIOD"), AND WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPF&S) DID NOT ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE FINRA RULES. DURING THE RELEVANT PERIOD, THE FIRM'S SYSTEMS AND PROCEDURES FOR DESIGNATING AND TRAINING PUBLIC AND PRIVATE SIDE PERSONNEL, SUPERVISING COMMUNICATIONS BETWEEN THEM, AND ESCALATING COMMUNICATIONS THAT DISCLOSED POTENTIAL MATERIAL NONPUBLIC INFORMATION ("MNPI") WERE NOT REASONABLE. IN PARTICULAR, AND DURING THE RELEVANT PERIOD, CERTAIN PERSONNEL IN ONE SUB-GROUP WHO WERE RE-DESIGNATED FROM PUBLIC SIDE TO PRIVATE SIDE UNDER THE FIRM'S POLICIES DID NOT RECEIVE REASONABLE TRAINING REGARDING THE RESPONSIBILITIES OF PRIVATE SIDE PERSONNEL. THE FIRM ALSO DID NOT REASONABLY ENFORCE ITS PROCEDURES DURING THE RELEVANT PERIOD REQUIRING FUNCTIONAL AND PHYSICAL SEPARATION OF PUBLIC AND PRIVATE SIDE PERSONNEL WITHIN THE SUB-GROUP. ALTHOUGH THE FIRM HAD ELECTRONIC COMMUNICATION REVIEW PROCEDURES DURING THE RELEVANT PERIOD, THE PROCEDURES DID NOT DESCRIBE A REASONABLE PROCESS FOR ESCALATING FOR FURTHER REVIEW COMMUNICATIONS THAT CONTAINED POTENTIAL MNPI. THE FIRM ENHANCED ITS PROCEDURES IN JUNE 2016 TO ADDRESS THE ISSUES IDENTIFIED. BASED ON THE FOREGOING, MLPF&S AGREED TO A CENSURE AND A FINE OF $90,000 TO FINRA.
Other filed details
Description of allegations — filed text
DURING THE PERIOD OF APPROXIMATELY SEPTEMBER 1, 2013 THROUGH JUNE 2016, AND WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED DID NOT REASONABLY SUPERVISE SPECIFIED PUBLIC AND PRIVATE SIDE EMPLOYEE DESIGNATIONS AND/OR COMMUNICATIONS IN ONE BUSINESS UNIT UNDER THE FIRM'S POLICIES AND PROCEDURES IN CONTRAVENTION OF FINRA RULES.
Sanction detail — filed text
THE FIRM AGREED TO PAY A FINE OF $90,000 TO FINRA.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA)
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE
3.
Date Initiated (MM/DD/YYYY):
03/30/2021
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
MATTER NOS. 2013038684001
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
EXCHANGE TRADED NOTE
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
DURING THE PERIOD OF APPROXIMATELY SEPTEMBER 1, 2013 THROUGH JUNE 2016, AND WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED DID NOT REASONABLY SUPERVISE SPECIFIED PUBLIC AND PRIVATE SIDE EMPLOYEE DESIGNATIONS
AND/OR COMMUNICATIONS IN ONE BUSINESS UNIT UNDER THE FIRM'S POLICIES AND PROCEDURES IN CONTRAVENTION OF FINRA RULES.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
03/30/2021
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 90,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
THE FIRM AGREED TO PAY A FINE OF $90,000 TO FINRA.
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE FIRM AGREED TO PAY A FINE OF $90,000 TO FINRA.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
DURING THE PERIOD OF APPROXIMATELY SEPTEMBER 1, 2013 THROUGH JUNE 2016 (THE "RELEVANT PERIOD"), AND WITHOUT ADMITTING OR DENYING
THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPF&S) DID NOT ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM
REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE FINRA RULES. DURING THE RELEVANT PERIOD, THE FIRM'S SYSTEMS AND
PROCEDURES FOR DESIGNATING AND TRAINING PUBLIC AND PRIVATE SIDE PERSONNEL, SUPERVISING COMMUNICATIONS BETWEEN THEM, AND
ESCALATING COMMUNICATIONS THAT DISCLOSED POTENTIAL MATERIAL NONPUBLIC INFORMATION ("MNPI") WERE NOT REASONABLE. IN PARTICULAR,
AND DURING THE RELEVANT PERIOD, CERTAIN PERSONNEL IN ONE SUB-GROUP WHO WERE RE-DESIGNATED FROM PUBLIC SIDE TO PRIVATE SIDE
UNDER THE FIRM'S POLICIES DID NOT RECEIVE REASONABLE TRAINING REGARDING THE RESPONSIBILITIES OF PRIVATE SIDE PERSONNEL. THE FIRM
ALSO DID NOT REASONABLY ENFORCE ITS PROCEDURES DURING THE RELEVANT PERIOD REQUIRING FUNCTIONAL AND PHYSICAL SEPARATION OF
PUBLIC AND PRIVATE SIDE PERSONNEL WITHIN THE SUB-GROUP. ALTHOUGH THE FIRM HAD ELECTRONIC COMMUNICATION REVIEW PROCEDURES
DURING THE RELEVANT PERIOD, THE PROCEDURES DID NOT DESCRIBE A REASONABLE PROCESS FOR ESCALATING FOR FURTHER REVIEW
COMMUNICATIONS THAT CONTAINED POTENTIAL MNPI. THE FIRM ENHANCED ITS PROCEDURES IN JUNE 2016 TO ADDRESS THE ISSUES IDENTIFIED.
BASED ON THE FOREGOING, MLPF&S AGREED TO A CENSURE AND A FINE OF $90,000 TO FINRA.regulatory · block 19PDF pages 570–572
- Regulator name — filed text
- THE NASDAQ STOCK MARKET LLC (NASDAQ)
- Monetary/Fine Amount — filed text
- $ 90,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
DURING THE PERIOD OF APPROXIMATELY SEPTEMBER 1, 2013 THROUGH JUNE 2016 (THE "RELEVANT PERIOD"), AND WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPF&S) DID NOT ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE NASDAQ RULES. DURING THE RELEVANT PERIOD, THE FIRM'S SYSTEMS AND PROCEDURES FOR DESIGNATING AND TRAINING PUBLIC AND PRIVATE SIDE PERSONNEL, SUPERVISING COMMUNICATIONS BETWEEN THEM, AND ESCALATING COMMUNICATIONS THAT DISCLOSED POTENTIAL MATERIAL NONPUBLIC INFORMATION ("MNPI") WERE NOT REASONABLE. IN PARTICULAR, AND DURING THE RELEVANT PERIOD, CERTAIN PERSONNEL IN ONE SUB-GROUP WHO WERE RE-DESIGNATED FROM PUBLIC SIDE TO PRIVATE SIDE UNDER THE FIRM'S POLICIES DID NOT RECEIVE REASONABLE TRAINING REGARDING THE RESPONSIBILITIES OF PRIVATE SIDE PERSONNEL. THE FIRM ALSO DID NOT REASONABLY ENFORCE ITS PROCEDURES DURING THE RELEVANT PERIOD REQUIRING FUNCTIONAL AND PHYSICAL SEPARATION OF PUBLIC AND PRIVATE SIDE PERSONNEL WITHIN THE SUB-GROUP. ALTHOUGH THE FIRM HAD ELECTRONIC COMMUNICATION REVIEW PROCEDURES DURING THE RELEVANT PERIOD, THE PROCEDURES DID NOT DESCRIBE A REASONABLE PROCESS FOR ESCALATING FOR FURTHER REVIEW COMMUNICATIONS THAT CONTAINED POTENTIAL MNPI. THE FIRM ENHANCED ITS PROCEDURES IN JUNE 2016 TO ADDRESS THE ISSUES IDENTIFIED. BASED ON THE FOREGOING, MLPF&S AGREED TO A CENSURE AND A FINE OF $90,000 TO NASDAQ.
Other filed details
Description of allegations — filed text
DURING THE PERIOD OF APPROXIMATELY SEPTEMBER 1, 2013 THROUGH JUNE 2016, AND WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED DID NOT REASONABLY SUPERVISE SPECIFIED PUBLIC AND PRIVATE SIDE EMPLOYEE DESIGNATIONS AND/OR COMMUNICATIONS IN ONE BUSINESS UNIT UNDER THE FIRM'S POLICIES AND PROCEDURES IN CONTRAVENTION OF NASDAQ RULES.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
THE NASDAQ STOCK MARKET LLC (NASDAQ)
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE
3.
Date Initiated (MM/DD/YYYY):
03/30/2021
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
MATTER NOS. 2013038684003
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
EXCHANGE TRADED NOTE
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
DURING THE PERIOD OF APPROXIMATELY SEPTEMBER 1, 2013 THROUGH JUNE 2016, AND WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED DID NOT REASONABLY SUPERVISE SPECIFIED PUBLIC AND PRIVATE SIDE EMPLOYEE DESIGNATIONS
AND/OR COMMUNICATIONS IN ONE BUSINESS UNIT UNDER THE FIRM'S POLICIES AND PROCEDURES IN CONTRAVENTION OF NASDAQ RULES.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
03/30/2021
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 90,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
THE FIRM AGREED TO PAY A FINE OF $90,000 TO NASDAQ.
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
p
p
)
q
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g
p
g
g
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE FIRM AGREED TO PAY A FINE OF $90,000 TO NASDAQ.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
DURING THE PERIOD OF APPROXIMATELY SEPTEMBER 1, 2013 THROUGH JUNE 2016 (THE "RELEVANT PERIOD"), AND WITHOUT ADMITTING OR DENYING
THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPF&S) DID NOT ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM
REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE NASDAQ RULES. DURING THE RELEVANT PERIOD, THE FIRM'S SYSTEMS AND
PROCEDURES FOR DESIGNATING AND TRAINING PUBLIC AND PRIVATE SIDE PERSONNEL, SUPERVISING COMMUNICATIONS BETWEEN THEM, AND
ESCALATING COMMUNICATIONS THAT DISCLOSED POTENTIAL MATERIAL NONPUBLIC INFORMATION ("MNPI") WERE NOT REASONABLE. IN PARTICULAR,
AND DURING THE RELEVANT PERIOD, CERTAIN PERSONNEL IN ONE SUB-GROUP WHO WERE RE-DESIGNATED FROM PUBLIC SIDE TO PRIVATE SIDE
UNDER THE FIRM'S POLICIES DID NOT RECEIVE REASONABLE TRAINING REGARDING THE RESPONSIBILITIES OF PRIVATE SIDE PERSONNEL. THE FIRM
ALSO DID NOT REASONABLY ENFORCE ITS PROCEDURES DURING THE RELEVANT PERIOD REQUIRING FUNCTIONAL AND PHYSICAL SEPARATION OF
PUBLIC AND PRIVATE SIDE PERSONNEL WITHIN THE SUB-GROUP. ALTHOUGH THE FIRM HAD ELECTRONIC COMMUNICATION REVIEW PROCEDURES
DURING THE RELEVANT PERIOD, THE PROCEDURES DID NOT DESCRIBE A REASONABLE PROCESS FOR ESCALATING FOR FURTHER REVIEW
COMMUNICATIONS THAT CONTAINED POTENTIAL MNPI. THE FIRM ENHANCED ITS PROCEDURES IN JUNE 2016 TO ADDRESS THE ISSUES IDENTIFIED.
BASED ON THE FOREGOING, MLPF&S AGREED TO A CENSURE AND A FINE OF $90,000 TO NASDAQ.regulatory · block 20PDF pages 572–574
- Regulator name — filed text
- CBOE EDGX EXCHANGE, INC. (EDGX)
- Monetary/Fine Amount — filed text
- $ 90,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
p p ) DURING THE PERIOD OF APPROXIMATELY SEPTEMBER 1, 2013 THROUGH JUNE 2016 (THE "RELEVANT PERIOD"), AND WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPF&S) DID NOT ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE EDGX RULES. DURING THE RELEVANT PERIOD, THE FIRM'S SYSTEMS AND PROCEDURES FOR DESIGNATING AND TRAINING PUBLIC AND PRIVATE SIDE PERSONNEL, SUPERVISING COMMUNICATIONS BETWEEN THEM, AND ESCALATING COMMUNICATIONS THAT DISCLOSED POTENTIAL MATERIAL NONPUBLIC INFORMATION ("MNPI") WERE NOT REASONABLE. IN PARTICULAR, AND DURING THE RELEVANT PERIOD, CERTAIN PERSONNEL IN ONE SUB-GROUP WHO WERE RE-DESIGNATED FROM PUBLIC SIDE TO PRIVATE SIDE UNDER THE FIRM'S POLICIES DID NOT RECEIVE REASONABLE TRAINING REGARDING THE RESPONSIBILITIES OF PRIVATE SIDE PERSONNEL. THE FIRM ALSO DID NOT REASONABLY ENFORCE ITS PROCEDURES DURING THE RELEVANT PERIOD REQUIRING FUNCTIONAL AND PHYSICAL SEPARATION OF PUBLIC AND PRIVATE SIDE PERSONNEL WITHIN THE SUB-GROUP. ALTHOUGH THE FIRM HAD ELECTRONIC COMMUNICATION REVIEW PROCEDURES DURING THE RELEVANT PERIOD, THE PROCEDURES DID NOT DESCRIBE A REASONABLE PROCESS FOR ESCALATING FOR FURTHER REVIEW COMMUNICATIONS THAT CONTAINED POTENTIAL MNPI. THE FIRM ENHANCED ITS PROCEDURES IN JUNE 2016 TO ADDRESS THE ISSUES IDENTIFIED. BASED ON THE FOREGOING, MLPF&S AGREED TO A CENSURE AND A FINE OF $90,000 TO EDGX.
Other filed details
Description of allegations — filed text
DURING THE PERIOD OF APPROXIMATELY SEPTEMBER 1, 2013 THROUGH JUNE 2016, AND WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED DID NOT REASONABLY SUPERVISE SPECIFIED PUBLIC AND PRIVATE SIDE EMPLOYEE DESIGNATIONS AND/OR COMMUNICATIONS IN ONE BUSINESS UNIT UNDER THE FIRM'S POLICIES AND PROCEDURES IN CONTRAVENTION OF EDGX RULES.
Sanction detail — filed text
THE FIRM AGREED TO PAY A FINE OF $90,000 TO EDGX.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
CBOE EDGX EXCHANGE, INC. (EDGX)
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE
3.
Date Initiated (MM/DD/YYYY):
03/30/2021
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
STAR NO. 20130386840-04 / FILE NO. USRI-7659-07
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
EXCHANGE TRADED NOTE
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
DURING THE PERIOD OF APPROXIMATELY SEPTEMBER 1, 2013 THROUGH JUNE 2016, AND WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED DID NOT REASONABLY SUPERVISE SPECIFIED PUBLIC AND PRIVATE SIDE EMPLOYEE DESIGNATIONS
AND/OR COMMUNICATIONS IN ONE BUSINESS UNIT UNDER THE FIRM'S POLICIES AND PROCEDURES IN CONTRAVENTION OF EDGX RULES.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
03/30/2021
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 90,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
THE FIRM AGREED TO PAY A FINE OF $90,000 TO EDGX.
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE FIRM AGREED TO PAY A FINE OF $90,000 TO EDGX.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
p
p
)
DURING THE PERIOD OF APPROXIMATELY SEPTEMBER 1, 2013 THROUGH JUNE 2016 (THE "RELEVANT PERIOD"), AND WITHOUT ADMITTING OR DENYING
THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPF&S) DID NOT ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM
REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE EDGX RULES. DURING THE RELEVANT PERIOD, THE FIRM'S SYSTEMS AND
PROCEDURES FOR DESIGNATING AND TRAINING PUBLIC AND PRIVATE SIDE PERSONNEL, SUPERVISING COMMUNICATIONS BETWEEN THEM, AND
ESCALATING COMMUNICATIONS THAT DISCLOSED POTENTIAL MATERIAL NONPUBLIC INFORMATION ("MNPI") WERE NOT REASONABLE. IN PARTICULAR,
AND DURING THE RELEVANT PERIOD, CERTAIN PERSONNEL IN ONE SUB-GROUP WHO WERE RE-DESIGNATED FROM PUBLIC SIDE TO PRIVATE SIDE
UNDER THE FIRM'S POLICIES DID NOT RECEIVE REASONABLE TRAINING REGARDING THE RESPONSIBILITIES OF PRIVATE SIDE PERSONNEL. THE FIRM
ALSO DID NOT REASONABLY ENFORCE ITS PROCEDURES DURING THE RELEVANT PERIOD REQUIRING FUNCTIONAL AND PHYSICAL SEPARATION OF
PUBLIC AND PRIVATE SIDE PERSONNEL WITHIN THE SUB-GROUP. ALTHOUGH THE FIRM HAD ELECTRONIC COMMUNICATION REVIEW PROCEDURES
DURING THE RELEVANT PERIOD, THE PROCEDURES DID NOT DESCRIBE A REASONABLE PROCESS FOR ESCALATING FOR FURTHER REVIEW
COMMUNICATIONS THAT CONTAINED POTENTIAL MNPI. THE FIRM ENHANCED ITS PROCEDURES IN JUNE 2016 TO ADDRESS THE ISSUES IDENTIFIED.
BASED ON THE FOREGOING, MLPF&S AGREED TO A CENSURE AND A FINE OF $90,000 TO EDGX.regulatory · block 21PDF pages 574–576
- Regulator name — filed text
- CBOE EDGA EXCHANGE, INC. (EDGA)
- Monetary/Fine Amount — filed text
- $ 90,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
DURING THE PERIOD OF APPROXIMATELY SEPTEMBER 1, 2013 THROUGH JUNE 2016 (THE "RELEVANT PERIOD"), AND WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPF&S) DID NOT ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE EDGA RULES. DURING THE RELEVANT PERIOD, THE FIRM'S SYSTEMS AND PROCEDURES FOR DESIGNATING AND TRAINING PUBLIC AND PRIVATE SIDE PERSONNEL, SUPERVISING COMMUNICATIONS BETWEEN THEM, AND ESCALATING COMMUNICATIONS THAT DISCLOSED POTENTIAL MATERIAL NONPUBLIC INFORMATION ("MNPI") WERE NOT REASONABLE. IN PARTICULAR, AND DURING THE RELEVANT PERIOD, CERTAIN PERSONNEL IN ONE SUB-GROUP WHO WERE RE-DESIGNATED FROM PUBLIC SIDE TO PRIVATE SIDE UNDER THE FIRM'S POLICIES DID NOT RECEIVE REASONABLE TRAINING REGARDING THE RESPONSIBILITIES OF PRIVATE SIDE PERSONNEL. THE FIRM ALSO DID NOT REASONABLY ENFORCE ITS PROCEDURES DURING THE RELEVANT PERIOD REQUIRING FUNCTIONAL AND PHYSICAL SEPARATION OF PUBLIC AND PRIVATE SIDE PERSONNEL WITHIN THE SUB-GROUP. ALTHOUGH THE FIRM HAD ELECTRONIC COMMUNICATION REVIEW PROCEDURES DURING THE RELEVANT PERIOD, THE PROCEDURES DID NOT DESCRIBE A REASONABLE PROCESS FOR ESCALATING FOR FURTHER REVIEW COMMUNICATIONS THAT CONTAINED POTENTIAL MNPI. THE FIRM ENHANCED ITS PROCEDURES IN JUNE 2016 TO ADDRESS THE ISSUES IDENTIFIED. BASED ON THE FOREGOING, MLPF&S AGREED TO A CENSURE AND A FINE OF $90,000 TO EDGA.
Other filed details
Description of allegations — filed text
DURING THE PERIOD OF APPROXIMATELY SEPTEMBER 1, 2013 THROUGH JUNE 2016, AND WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED DID NOT REASONABLY SUPERVISE SPECIFIED PUBLIC AND PRIVATE SIDE EMPLOYEE DESIGNATIONS AND/OR COMMUNICATIONS IN ONE BUSINESS UNIT UNDER THE FIRM'S POLICIES AND PROCEDURES IN CONTRAVENTION OF EDGA RULES.
Sanction detail — filed text
THE FIRM AGREED TO PAY A FINE OF $90,000 TO EDGA.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
CBOE EDGA EXCHANGE, INC. (EDGA)
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE
3.
Date Initiated (MM/DD/YYYY):
03/30/2021
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
STAR NO. 20130386840-05 / FILE NO. USRI-7659-08
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
EXCHANGE TRADED NOTE
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
DURING THE PERIOD OF APPROXIMATELY SEPTEMBER 1, 2013 THROUGH JUNE 2016, AND WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED DID NOT REASONABLY SUPERVISE SPECIFIED PUBLIC AND PRIVATE SIDE EMPLOYEE DESIGNATIONS
AND/OR COMMUNICATIONS IN ONE BUSINESS UNIT UNDER THE FIRM'S POLICIES AND PROCEDURES IN CONTRAVENTION OF EDGA RULES.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
03/30/2021
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 90,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
THE FIRM AGREED TO PAY A FINE OF $90,000 TO EDGA.
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE FIRM AGREED TO PAY A FINE OF $90,000 TO EDGA.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
DURING THE PERIOD OF APPROXIMATELY SEPTEMBER 1, 2013 THROUGH JUNE 2016 (THE "RELEVANT PERIOD"), AND WITHOUT ADMITTING OR DENYING
THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPF&S) DID NOT ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM
REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE EDGA RULES. DURING THE RELEVANT PERIOD, THE FIRM'S SYSTEMS AND
PROCEDURES FOR DESIGNATING AND TRAINING PUBLIC AND PRIVATE SIDE PERSONNEL, SUPERVISING COMMUNICATIONS BETWEEN THEM, AND
ESCALATING COMMUNICATIONS THAT DISCLOSED POTENTIAL MATERIAL NONPUBLIC INFORMATION ("MNPI") WERE NOT REASONABLE. IN PARTICULAR,
AND DURING THE RELEVANT PERIOD, CERTAIN PERSONNEL IN ONE SUB-GROUP WHO WERE RE-DESIGNATED FROM PUBLIC SIDE TO PRIVATE SIDE
UNDER THE FIRM'S POLICIES DID NOT RECEIVE REASONABLE TRAINING REGARDING THE RESPONSIBILITIES OF PRIVATE SIDE PERSONNEL. THE FIRM
ALSO DID NOT REASONABLY ENFORCE ITS PROCEDURES DURING THE RELEVANT PERIOD REQUIRING FUNCTIONAL AND PHYSICAL SEPARATION OF
PUBLIC AND PRIVATE SIDE PERSONNEL WITHIN THE SUB-GROUP. ALTHOUGH THE FIRM HAD ELECTRONIC COMMUNICATION REVIEW PROCEDURES
DURING THE RELEVANT PERIOD, THE PROCEDURES DID NOT DESCRIBE A REASONABLE PROCESS FOR ESCALATING FOR FURTHER REVIEW
COMMUNICATIONS THAT CONTAINED POTENTIAL MNPI. THE FIRM ENHANCED ITS PROCEDURES IN JUNE 2016 TO ADDRESS THE ISSUES IDENTIFIED.
BASED ON THE FOREGOING, MLPF&S AGREED TO A CENSURE AND A FINE OF $90,000 TO EDGA.regulatory · block 22PDF pages 576–577
- Regulator name — filed text
- FINANCIAL INDUSTRY REGULATORY AUTHORITY
- Monetary/Fine Amount — filed text
- $ 3,250,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED $3,250,000 AND ORDERED TO PAY $8,437,233.38, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS. THE FINE WAS PAID ON OR AROUND JULY 1, 2021.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (THE FIRM) CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH FINRA'S SUITABILITY RULE AS IT PERTAINS TO EARLY ROLLOVERS OF UNIT INVESTMENT TRUSTS, IN VIOLATION OF NASD RULE 3010 (FOR CONDUCT BEFORE DECEMBER 1, 2014), FINRA RULE 3110 (FOR CONDUCT ON OR AFTER DECEMBER 1, 2014) AND FINRA RULE 2010. THE FIRM HAS SINCE ENHANCED ITS CONTROLS RELEVANT TO THE UIT BUSINESS, INCLUDING BY IMPLEMENTING NEW AUTOMATED REPORTS TO IDENTIFY PATTERNS OF UIT LIQUIDATIONS PRIOR TO MATURITY AND BY PROHIBITING EARLY SERIES TO SERIES ROLLOVERS.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED $3,250,000 AND ORDERED TO PAY $8,437,233.38, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS. THE FINE WAS PAID ON OR AROUND JULY 1, 2021.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINANCIAL INDUSTRY REGULATORY AUTHORITY 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: RESTITUTION, CENSURE 3. Date Initiated (MM/DD/YYYY): 06/25/2021 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2017053437701 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Unit Investment Trust(s) Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (THE FIRM) CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH FINRA'S SUITABILITY RULE AS IT PERTAINS TO EARLY ROLLOVERS OF UNIT INVESTMENT TRUSTS, IN VIOLATION OF NASD RULE 3010 (FOR CONDUCT BEFORE DECEMBER 1, 2014), FINRA RULE 3110 (FOR CONDUCT ON OR AFTER DECEMBER 1, 2014) AND FINRA RULE 2010. THE FIRM HAS SINCE ENHANCED ITS CONTROLS RELEVANT TO THE UIT BUSINESS, INCLUDING BY IMPLEMENTING NEW AUTOMATED REPORTS TO IDENTIFY PATTERNS OF UIT LIQUIDATIONS PRIOR TO MATURITY AND BY PROHIBITING EARLY SERIES TO SERIES ROLLOVERS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 06/25/2021 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 3,250,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED $3,250,000 AND ORDERED TO PAY $8,437,233.38, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS. THE FINE WAS PAID ON OR AROUND JULY 1, 2021. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED $3,250,000 AND ORDERED TO PAY $8,437,233.38, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS. THE FINE WAS PAID ON OR AROUND JULY 1, 2021.
regulatory · block 23BOFA SECURITIES, INC.PDF pages 577–579
- Advisory affiliate name — filed text
- BOFA SECURITIES, INC.
- Regulator name — filed text
- NEW YORK STOCK EXCHANGE LLC
- Monetary/Fine Amount — filed text
- $ 25,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPFS AND BOFAS AGREED TO THE IMPOSITION OF A CENSURE AND FINE IN THE AMOUNT OF $25,000, ALLOCATED JOINTLY AND SEVERALLY BETWEEN MLPFS AND BOFAS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
Other filed details
Description of allegations — filed text
THE NEW YORK STOCK EXCHANGE LLC ("NYSE") ALLEGED THAT MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS) AND BOFA SECURITIES, INC. (BOFAS) (1) ROUTED TWO COMPETING PARENT ORDERS ON BEHALF OF TWO DIFFERENT PORTFOLIOS MANAGED BY THE SAME ADVISOR TO TWO DIFFERENT FLOOR BROKER FIRMS, RESULTING IN EXECUTIONS AT THE SAME TIME AND PRICE OF ORDERS ON BEHALF OF THE SAME CUSTOMERS BY TWO FLOOR BROKERS IN VIOLATION (UNINTENTIONALLY) OF NYSE RULE 122, AND (2) FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM AND WRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULE 122 IN VIOLATION OF NYSE RULE 3110(A) AND (B).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPFS AND BOFAS AGREED TO THE IMPOSITION OF A CENSURE AND FINE IN THE AMOUNT OF $25,000, ALLOCATED JOINTLY AND SEVERALLY BETWEEN MLPFS AND BOFAS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
283942
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BOFA SECURITIES, INC.
(For individuals, Last, First,
Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
NEW YORK STOCK EXCHANGE LLC
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE
3.
Date Initiated (MM/DD/YYYY):
07/21/2021
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
NO. 2019-07-00074
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE NEW YORK STOCK EXCHANGE LLC ("NYSE") ALLEGED THAT MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS) AND BOFA
SECURITIES, INC. (BOFAS) (1) ROUTED TWO COMPETING PARENT ORDERS ON BEHALF OF TWO DIFFERENT PORTFOLIOS MANAGED BY THE SAME
ADVISOR TO TWO DIFFERENT FLOOR BROKER FIRMS, RESULTING IN EXECUTIONS AT THE SAME TIME AND PRICE OF ORDERS ON BEHALF OF THE SAME
CUSTOMERS BY TWO FLOOR BROKERS IN VIOLATION (UNINTENTIONALLY) OF NYSE RULE 122, AND (2) FAILED TO ESTABLISH AND MAINTAIN A
SUPERVISORY SYSTEM AND WRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULE 122 IN
VIOLATION OF NYSE RULE 3110(A) AND (B).
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
08/02/2021
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 25,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPFS AND BOFAS AGREED TO THE IMPOSITION OF A CENSURE AND FINE IN THE AMOUNT OF
$25,000, ALLOCATED JOINTLY AND SEVERALLY BETWEEN MLPFS AND BOFAS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE
AWC.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPFS AND BOFAS AGREED TO THE IMPOSITION OF A CENSURE AND FINE IN THE AMOUNT OF
$25,000, ALLOCATED JOINTLY AND SEVERALLY BETWEEN MLPFS AND BOFAS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.regulatory · block 24PDF pages 579–581
- Regulator name — filed text
- FINANCIAL INDUSTRY REGULATORY AUTHORITY
- Monetary/Fine Amount — filed text
- $ 1,500,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED, FINED $1,500,000 AND AGREED TO CERTAIN UNDERTAKINGS.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (THE FIRM) CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM THAT WAS REASONABLY DESIGNED TO ADDRESS SHORT POSITIONS IN MUNICIPAL SECURITIES AND THEIR EFFECTS ON THE CUSTOMERS WHO HOLD THEM IN VIOLATION OF MSRB RULE G- 27, FAILED TO TAKE PROMPT STEPS TO BRING SHORT POSITIONS IN MUNICIPAL SECURITIES WITHIN ITS CONTROL WITHIN 30 DAYS IN VIOLATION OF SECURITIES EXCHANGE ACT OF 1934 RULE 15C3-3(D)(4) AND FINRA RULE 2010, AND FAILED TO PROVIDE ITS CUSTOMERS WITH NOTICE CLEARLY IDENTIFYING THEIR RECEIPT OF SUBSTITUTE INTEREST PAYMENTS AND THE POTENTIAL TAX LIABILITY RESULTING FROM THE PAYMENTS IN VIOLATION OF FINRA RULE 2010.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED, FINED $1,500,000 AND AGREED TO CERTAIN UNDERTAKINGS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINANCIAL INDUSTRY REGULATORY AUTHORITY 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE, UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 10/04/2021 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2016050801701 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Debt - Municipal Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (THE FIRM) CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM THAT WAS REASONABLY DESIGNED TO ADDRESS SHORT POSITIONS IN MUNICIPAL SECURITIES AND THEIR EFFECTS ON THE CUSTOMERS WHO HOLD THEM IN VIOLATION OF MSRB RULE G- 27, FAILED TO TAKE PROMPT STEPS TO BRING SHORT POSITIONS IN MUNICIPAL SECURITIES WITHIN ITS CONTROL WITHIN 30 DAYS IN VIOLATION OF SECURITIES EXCHANGE ACT OF 1934 RULE 15C3-3(D)(4) AND FINRA RULE 2010, AND FAILED TO PROVIDE ITS CUSTOMERS WITH NOTICE CLEARLY IDENTIFYING THEIR RECEIPT OF SUBSTITUTE INTEREST PAYMENTS AND THE POTENTIAL TAX LIABILITY RESULTING FROM THE PAYMENTS IN VIOLATION OF FINRA RULE 2010. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 10/04/2021 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 1,500,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKINGS Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED, FINED $1,500,000 AND AGREED TO CERTAIN UNDERTAKINGS. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED, FINED $1,500,000 AND AGREED TO CERTAIN UNDERTAKINGS.
regulatory · block 25PDF pages 581–583
- Regulator name — filed text
- FINANCIAL INDUSTRY REGULATORY AUTHORITY
- Monetary/Fine Amount — filed text
- $ 850,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED $850,000.
Other filed details
Description of allegations — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (THE FIRM) CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT (1) IMPROPERLY NETTED THE TRADING ACTIVITY OF FIVE AFFILIATED BROKER-DEALER CUSTOMERS WHEN DETERMINING THEIR CLOSE-OUT OBLIGATIONS AND CLAIMING PRE-FAIL CREDIT IN VIOLATION OF RULE 204 OF REGULATION SHO AND FINRA RULE 2010; (2) INCLUDED SECURITIES POSITIONS HELD BY THE FIRM'S FOREIGN AND NON-BROKER-DEALER AFFILIATES WHEN CALCULATING THE NET POSITIONS OF TWO INDEPENDENT TRADING UNITS IN VIOLATION OF RULE 200(F) OF REGULATION SHO; AND (3) FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDING WRITTEN SUPERVISORY PROCEDURES, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RULE 200(F) OF REGULATION SHO, IN VIOLATION OF NASD RULES 3010 AND 2110 AND FINRA RULES 3110 AND 2010.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED $850,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINANCIAL INDUSTRY REGULATORY AUTHORITY 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 10/06/2021 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2016050801702 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: UNSPECIFIED SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (THE FIRM) CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT (1) IMPROPERLY NETTED THE TRADING ACTIVITY OF FIVE AFFILIATED BROKER-DEALER CUSTOMERS WHEN DETERMINING THEIR CLOSE-OUT OBLIGATIONS AND CLAIMING PRE-FAIL CREDIT IN VIOLATION OF RULE 204 OF REGULATION SHO AND FINRA RULE 2010; (2) INCLUDED SECURITIES POSITIONS HELD BY THE FIRM'S FOREIGN AND NON-BROKER-DEALER AFFILIATES WHEN CALCULATING THE NET POSITIONS OF TWO INDEPENDENT TRADING UNITS IN VIOLATION OF RULE 200(F) OF REGULATION SHO; AND (3) FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDING WRITTEN SUPERVISORY PROCEDURES, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RULE 200(F) OF REGULATION SHO, IN VIOLATION OF NASD RULES 3010 AND 2110 AND FINRA RULES 3110 AND 2010. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 10/06/2021 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 850,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED $850,000. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM WAS CENSURED AND FINED $850,000.
regulatory · block 26BANK OF AMERICA, NATIONAL ASSOCIATIONPDF pages 583–585
- Advisory affiliate name — filed text
- BANK OF AMERICA, NATIONAL ASSOCIATION
- Regulator name — filed text
- CHICAGO BOARD OF TRADE
- Monetary/Fine Amount — filed text
- $ 30,000.00
- How was matter resolved — filed text
- Other
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE RULE VIOLATION OR FACTUAL FINDINGS UPON WHICH THE PENALTY IS BASED, THE BCC ORDERED THE FIRM TO PAY A $30,000 FINE.
Other filed details
Description of allegations — filed text
A PANEL OF THE CHICAGO BOARD OF TRADE BUSINESS CONDUCT COMMITTEE ("BCC") ALLEGED THAT BANK OF AMERICA, NATIONAL ASSOCIATION (THE "FIRM") (1) EXECUTED AN EXCHANGE FOR RELATED RISK ("EFR") TRANSACTION THAT CONSISTED OF THE SIMULTANEOUS EXECUTION OF FUTURES POSITIONS WITHOUT THE EXCHANGE OF CORRESPONDING OTC SWAPS, THEREBY CONSTITUTING A NON-BONA FIDE EFR; AND (2) AS PART OF THE SAME LARGE, COUNTERPARTY-PROPOSED TRANSACTION, EXECUTED BUY AND SELL ORDERS FOR THE SAME ACCOUNT AND KNEW OR REASONABLY SHOULD HAVE KNOWN THAT THE ORDERS WOULD MATCH AND AVOID ANY MARKET RISK. THE BCC FOUND THAT THE FIRM VIOLATED CBOT RULES 538.C AND 534.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE RULE VIOLATION OR FACTUAL FINDINGS UPON WHICH THE PENALTY IS BASED, THE BCC ORDERED THE FIRM TO PAY A $30,000 FINE.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BANK OF AMERICA, NATIONAL
ASSOCIATION
(For individuals, Last, First,
Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
CHICAGO BOARD OF TRADE
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
3.
Date Initiated (MM/DD/YYYY):
10/28/2021
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
CBOT 21-1460-BC
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Futures - Financial
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
A PANEL OF THE CHICAGO BOARD OF TRADE BUSINESS CONDUCT COMMITTEE ("BCC") ALLEGED THAT BANK OF AMERICA, NATIONAL ASSOCIATION (THE
"FIRM") (1) EXECUTED AN EXCHANGE FOR RELATED RISK ("EFR") TRANSACTION THAT CONSISTED OF THE SIMULTANEOUS EXECUTION OF FUTURES
POSITIONS WITHOUT THE EXCHANGE OF CORRESPONDING OTC SWAPS, THEREBY CONSTITUTING A NON-BONA FIDE EFR; AND (2) AS PART OF THE
SAME LARGE, COUNTERPARTY-PROPOSED TRANSACTION, EXECUTED BUY AND SELL ORDERS FOR THE SAME ACCOUNT AND KNEW OR REASONABLY
SHOULD HAVE KNOWN THAT THE ORDERS WOULD MATCH AND AVOID ANY MARKET RISK. THE BCC FOUND THAT THE FIRM VIOLATED CBOT RULES 538.C
AND 534.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Other
11. Resolution Date (MM/DD/YYYY):
10/28/2021
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 30,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE RULE VIOLATION OR FACTUAL FINDINGS UPON WHICH THE PENALTY IS BASED, THE BCC ORDERED THE
FIRM TO PAY A $30,000 FINE.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE RULE VIOLATION OR FACTUAL FINDINGS UPON WHICH THE PENALTY IS BASED, THE BCC ORDERED THE FIRM TO
PAY A $30,000 FINE.regulatory · block 27PDF pages 585–587
- Regulator name — filed text
- FINANCIAL INDUSTRY REGULATORY AUTHORITY
- Monetary/Fine Amount — filed text
- $ 950,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPFS AGREED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $950,000, AND COMPLETION OF AN UNDERTAKING. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
Other filed details
Description of allegations — filed text
THE FINANCIAL INDUSTRY REGULATORY AUTHORITY FOUND THAT MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS) FAILED TO REASONABLY SUPERVISE THE TRANSMITTAL OF CUSTOMER FUNDS VIA EXTERNALLY-INITIATED AUTOMATED CLEARING HOUSE TRANSFERS AND AS A RESULT FAILED TO DETECT THAT TWO OF ITS REGISTERED REPRESENTATIVES WERE ABLE TO MISAPPROPRIATE FUNDS FROM CERTAIN CUSTOMERS, IN VIOLATION OF NASD RULES 3010 AND 3012 AND FINRA RULES 3110 AND 2010.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPFS AGREED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $950,000, AND COMPLETION OF AN UNDERTAKING. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINANCIAL INDUSTRY REGULATORY AUTHORITY 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 12/20/2021 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: NO. 2018057201801 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE FINANCIAL INDUSTRY REGULATORY AUTHORITY FOUND THAT MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS) FAILED TO REASONABLY SUPERVISE THE TRANSMITTAL OF CUSTOMER FUNDS VIA EXTERNALLY-INITIATED AUTOMATED CLEARING HOUSE TRANSFERS AND AS A RESULT FAILED TO DETECT THAT TWO OF ITS REGISTERED REPRESENTATIVES WERE ABLE TO MISAPPROPRIATE FUNDS FROM CERTAIN CUSTOMERS, IN VIOLATION OF NASD RULES 3010 AND 3012 AND FINRA RULES 3110 AND 2010. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 12/20/2021 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 950,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPFS AGREED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $950,000, AND COMPLETION OF AN UNDERTAKING. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPFS AGREED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $950,000, AND COMPLETION OF AN UNDERTAKING. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
regulatory · block 28PDF pages 587–588
- Regulator name — filed text
- FINANCIAL INDUSTRY REGULATORY AUTHORITY
- Monetary/Fine Amount — filed text
- $ 1,200,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPFS AGREED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $1,200,000, AND COMPLETION OF AN UNDERTAKING. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
Other filed details
Description of allegations — filed text
THE FINANCIAL INDUSTRY REGULATORY AUTHORITY FOUND THAT MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS) FAILED TO COMPLY WITH ITS FINRA RULE 8210 OBLIGATIONS IN TWO SEPARATE FINRA ENFORCEMENT INVESTIGATIONS, WHICH INTERFERED WITH AND DELAYED FINRA'S INVESTIGATIONS IN VIOLATION OF FINRA RULES 8210 AND 2010.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPFS AGREED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $1,200,000, AND COMPLETION OF AN UNDERTAKING. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINANCIAL INDUSTRY REGULATORY AUTHORITY 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE, UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 12/20/2021 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: NO. 2018058015702 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE FINANCIAL INDUSTRY REGULATORY AUTHORITY FOUND THAT MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS) FAILED TO COMPLY WITH ITS FINRA RULE 8210 OBLIGATIONS IN TWO SEPARATE FINRA ENFORCEMENT INVESTIGATIONS, WHICH INTERFERED WITH AND DELAYED FINRA'S INVESTIGATIONS IN VIOLATION OF FINRA RULES 8210 AND 2010. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 12/20/2021 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 1,200,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPFS AGREED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $1,200,000, AND COMPLETION OF AN UNDERTAKING. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPFS AGREED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $1,200,000, AND COMPLETION OF AN UNDERTAKING. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
regulatory · block 29BANK OF AMERICA, NATIONAL ASSOCIATIONPDF pages 588–590
- Advisory affiliate name — filed text
- BANK OF AMERICA, NATIONAL ASSOCIATION
- Regulator name — filed text
- CONSUMER FINANCIAL PROTECTION BUREAU
- Monetary/Fine Amount — filed text
- $ 10,000,000.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO (1) THE ENTRY OF THE ORDER, (2) NOT VIOLATE SECTIONS 1031(A) AND 1036(A)(1)(B) OF THE CFPA, 12 USC §§ 5531(A) AND (C)(1) AND 5536(A)(1)(B), (3) REFUND ALL GARNISHMENT-RELATED FEES PAID BY THE AFFECTED CONSUMERS TOTALING NO LESS THAN $592,000 AND CANCEL ANY UNPAID GARNISHMENT RELATED FEES, (4) CERTAIN UNDERTAKINGS, AND (5) PAYMENT OF A CIVIL MONETARY PENALTY IN THE AMOUNT OF $10,000,000. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
Other filed details
Description of allegations — filed text
THE CONSUMER FINANCIAL PROTECTION BUREAU ("CFPB") ALLEGED THAT BANK OF AMERICA, NATIONAL ASSOCIATION (THE FIRM) (1) ENGAGED IN UNFAIR ACTS AND PRACTICES BY RESPONDING TO AND PROCESSING GARNISHMENT NOTICES AGAINST OUT-OF-STATE BANK ACCOUNTS IN VIOLATION OF CERTAIN GARNISHMENT-ISSUING STATES' PROHIBITIONS AGAINST OUT-OF-STATE GARNISHMENT; (2) ENGAGED IN UNFAIR ACTS AND PRACTICES BY FAILING TO APPLY THE APPROPRIATE STATE EXEMPTIONS TO CERTAIN CONSUMERS' DEPOSIT ACCOUNTS AFTER RECEIVING GARNISHMENT NOTICES; (3) ENGAGED IN DECEPTIVE ACTS AND PRACTICES BY MISREPRESENTING TO CONSUMERS, BY IMPLICATION, THE APPLICABLE STATE EXEMPTION RIGHTS FOR GARNISHMENT BY APPLYING THE ISSUING STATE'S EXEMPTIONS INSTEAD OF THE EXEMPTIONS OF THE CONSUMER'S STATE OF RESIDENCE, WHERE THE STATES OF ISSUANCE AND RESIDENCE DIFFER; (4) ENGAGED IN UNFAIR ACTS AND PRACTICES BY USING A DEPOSIT AGREEMENT THAT REQUIRED CONSUMERS TO DIRECT THE FIRM NOT TO CONTEST LEGAL PROCESS AND WAIVE THE FIRM'S LIABILITY FOR ITS UNLAWFUL GARNISHMENT CONDUCT; AND (5) ENGAGED IN DECEPTIVE ACTS AND PRACTICES BY SUGGESTING CONSUMERS COULD NOT BRING LEGAL CLAIMS MISREPRESENTING CONSUMERS' LEGAL RIGHTS AGAINST THE FIRM REGARDING GARNISHMENT PROCEEDINGS. THE CFPB ALLEGES THAT THESE ACTS VIOLATED SECTIONS 1031(A) AND 1036(A)(1)(B) OF THE CONSUMER FINANCIAL PROTECTION ACT OF 2010 ("CFPA"), 12 USC §§ 5531(A) AND (C)(1) AND 5536(A)(1)(B).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO (1) THE ENTRY OF THE ORDER, (2) NOT VIOLATE SECTIONS 1031(A) AND 1036(A)(1)(B) OF THE CFPA, 12 USC §§ 5531(A) AND (C)(1) AND 5536(A)(1)(B), (3) REFUND ALL GARNISHMENT-RELATED FEES PAID BY THE AFFECTED CONSUMERS TOTALING NO LESS THAN $592,000 AND CANCEL ANY UNPAID GARNISHMENT RELATED FEES, (4) CERTAIN UNDERTAKINGS, AND (5) PAYMENT OF A CIVIL MONETARY PENALTY IN THE AMOUNT OF $10,000,000. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BANK OF AMERICA, NATIONAL
ASSOCIATION
(For individuals, Last, First,
Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
CONSUMER FINANCIAL PROTECTION BUREAU
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CEASE AND DESIST, RESTITUTION, UNDERTAKING
3.
Date Initiated (MM/DD/YYYY):
05/04/2022
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
FILE NO. 2022-CFPB-0002
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE CONSUMER FINANCIAL PROTECTION BUREAU ("CFPB") ALLEGED THAT BANK OF AMERICA, NATIONAL ASSOCIATION (THE FIRM) (1) ENGAGED IN
UNFAIR ACTS AND PRACTICES BY RESPONDING TO AND PROCESSING GARNISHMENT NOTICES AGAINST OUT-OF-STATE BANK ACCOUNTS IN VIOLATION
OF CERTAIN GARNISHMENT-ISSUING STATES' PROHIBITIONS AGAINST OUT-OF-STATE GARNISHMENT; (2) ENGAGED IN UNFAIR ACTS AND PRACTICES BY
FAILING TO APPLY THE APPROPRIATE STATE EXEMPTIONS TO CERTAIN CONSUMERS' DEPOSIT ACCOUNTS AFTER RECEIVING GARNISHMENT NOTICES;
(3) ENGAGED IN DECEPTIVE ACTS AND PRACTICES BY MISREPRESENTING TO CONSUMERS, BY IMPLICATION, THE APPLICABLE STATE EXEMPTION
RIGHTS FOR GARNISHMENT BY APPLYING THE ISSUING STATE'S EXEMPTIONS INSTEAD OF THE EXEMPTIONS OF THE CONSUMER'S STATE OF RESIDENCE,
WHERE THE STATES OF ISSUANCE AND RESIDENCE DIFFER; (4) ENGAGED IN UNFAIR ACTS AND PRACTICES BY USING A DEPOSIT AGREEMENT THAT
REQUIRED CONSUMERS TO DIRECT THE FIRM NOT TO CONTEST LEGAL PROCESS AND WAIVE THE FIRM'S LIABILITY FOR ITS UNLAWFUL GARNISHMENT
CONDUCT; AND (5) ENGAGED IN DECEPTIVE ACTS AND PRACTICES BY SUGGESTING CONSUMERS COULD NOT BRING LEGAL CLAIMS MISREPRESENTING
CONSUMERS' LEGAL RIGHTS AGAINST THE FIRM REGARDING GARNISHMENT PROCEEDINGS. THE CFPB ALLEGES THAT THESE ACTS VIOLATED SECTIONS
1031(A) AND 1036(A)(1)(B) OF THE CONSUMER FINANCIAL PROTECTION ACT OF 2010 ("CFPA"), 12 USC §§ 5531(A) AND (C)(1) AND 5536(A)(1)(B).
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Consent
11. Resolution Date (MM/DD/YYYY):
05/04/2022
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 10,000,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
UNDERTAKINGS
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO (1) THE ENTRY OF THE ORDER, (2) NOT VIOLATE SECTIONS 1031(A)
AND 1036(A)(1)(B) OF THE CFPA, 12 USC §§ 5531(A) AND (C)(1) AND 5536(A)(1)(B), (3) REFUND ALL GARNISHMENT-RELATED FEES PAID BY THE
AFFECTED CONSUMERS TOTALING NO LESS THAN $592,000 AND CANCEL ANY UNPAID GARNISHMENT RELATED FEES, (4) CERTAIN
UNDERTAKINGS, AND (5) PAYMENT OF A CIVIL MONETARY PENALTY IN THE AMOUNT OF $10,000,000. THE CIVIL MONETARY PENALTY WAS PAID IN
ACCORDANCE WITH THE TERMS OF THE ORDER.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO (1) THE ENTRY OF THE ORDER, (2) NOT VIOLATE SECTIONS 1031(A) AND
1036(A)(1)(B) OF THE CFPA, 12 USC §§ 5531(A) AND (C)(1) AND 5536(A)(1)(B), (3) REFUND ALL GARNISHMENT-RELATED FEES PAID BY THE AFFECTED
CONSUMERS TOTALING NO LESS THAN $592,000 AND CANCEL ANY UNPAID GARNISHMENT RELATED FEES, (4) CERTAIN UNDERTAKINGS, AND (5)
PAYMENT OF A CIVIL MONETARY PENALTY IN THE AMOUNT OF $10,000,000. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE
TERMS OF THE ORDER.regulatory · block 30PDF pages 590–592
- Regulator name — filed text
- FINANCIAL INDUSTRY REGULATORY AUTHORITY
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO PAY RESTITUTION TO AFFECTED CUSTOMERS TOTALING APPROXIMATELY $13.4 MILLION, PLUS INTEREST TOTALING APPROXIMATELY $1.8 MILLION. THE FIRM WILL MAKE THESE PAYMENTS IN ACCORDANCE WITH THE WRITTEN PLAN OF REMEDIATION PROVIDED TO FINRA FOR THIS MATTER.
Other filed details
Description of allegations — filed text
THE FINANCIAL INDUSTRY REGULATORY AUTHORITY FOUND THAT MERRILL LYNCH, PIERCE, FENNER & SMITH (THE FIRM) FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM REASONABLY DESIGNED TO SUPERVISE SALES OF MUTUAL FUND CLASS C SHARES BETWEEN JANUARY 2015 AND JANUARY 2021, IN VIOLATION OF FINRA RULES 3110 AND 2010.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO PAY RESTITUTION TO AFFECTED CUSTOMERS TOTALING APPROXIMATELY $13.4 MILLION, PLUS INTEREST TOTALING APPROXIMATELY $1.8 MILLION. THE FIRM WILL MAKE THESE PAYMENTS IN ACCORDANCE WITH THE WRITTEN PLAN OF REMEDIATION PROVIDED TO FINRA FOR THIS MATTER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINANCIAL INDUSTRY REGULATORY AUTHORITY 2. Principal Sanction: Censure Other Sanctions: RESTITUTION 3. Date Initiated (MM/DD/YYYY): 06/01/2022 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2020068535401 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Mutual Fund(s) Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE FINANCIAL INDUSTRY REGULATORY AUTHORITY FOUND THAT MERRILL LYNCH, PIERCE, FENNER & SMITH (THE FIRM) FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM REASONABLY DESIGNED TO SUPERVISE SALES OF MUTUAL FUND CLASS C SHARES BETWEEN JANUARY 2015 AND JANUARY 2021, IN VIOLATION OF FINRA RULES 3110 AND 2010. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 06/01/2022 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO PAY RESTITUTION TO AFFECTED CUSTOMERS TOTALING APPROXIMATELY $13.4 MILLION, PLUS INTEREST TOTALING APPROXIMATELY $1.8 MILLION. THE FIRM WILL MAKE THESE PAYMENTS IN ACCORDANCE WITH THE WRITTEN PLAN OF REMEDIATION PROVIDED TO FINRA FOR THIS MATTER. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO PAY RESTITUTION TO AFFECTED CUSTOMERS TOTALING APPROXIMATELY $13.4 MILLION, PLUS INTEREST TOTALING APPROXIMATELY $1.8 MILLION. THE FIRM WILL MAKE THESE PAYMENTS IN ACCORDANCE WITH THE WRITTEN PLAN OF REMEDIATION PROVIDED TO FINRA FOR THIS MATTER.
regulatory · block 31BANK OF AMERICA, NATIONAL ASSOCIATIONPDF pages 592–594
- Advisory affiliate name — filed text
- BANK OF AMERICA, NATIONAL ASSOCIATION
- Regulator name — filed text
- CONSUMER FINANCIAL PROTECTION BUREAU
- Monetary/Fine Amount — filed text
- $ 100,000,000.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FAT OF CONCLUSIONS OF LAW CONTAINED WITHIN THE ORDER, THE FIRM CONSENTED TO (A) CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF THE PROVISIONS DETAILED ABOVE, (B) CERTAIN UNDERTAKINGS, (C) PAYMENT OF REDRESS TO AFFECTED CUSTOMERS, AND (D) PAYMENT OF A CIVIL MONETARY PENALTY IN THE AMOUNT OF $100 MILLION.
Other filed details
Description of allegations — filed text
THE CONSUMER FINANCIAL PROTECTION BUREAU ("CFPB") ALLEGED THAT BANK OF AMERICA, NATIONAL ASSOCIATION (THE FIRM) (1) ENGAGED IN UNFAIR ACTS OR PRACTICES BY DETERMINING NO ERROR HAD OCCURRED AND FREEZING CARDHOLDER ACCOUNTS BASED SOLELY ON THE RESULTS OF ITS AUTOMATED FRAUD FILTER, IN VIOLATION OF SECTIONS 1031 AND 1036 OF THE CONSUMER FINANCIAL PROTECTION ACT OF 2010 (CFPA), 12 U.S.C. §§ 5531(A) AND (C), 5536(A)(1)(B); (2) FAILED TO CONDUCT REASONABLE INVESTIGATIONS OF UNEMPLOYMENT INSURANCE BENEFIT PREPAID DEBIT CARDHOLDERS' NOTICES OF ERROR, IN VIOLATION OF SECTIONS 908 AND 909 OF THE ELECTRONIC FUND TRANSFER ACT (EFTA), 15 U.S.C. §§ 1693F AND 1693G, AND SECTION 1005.11 OF REGULATION E; (3) ENGAGED IN ABUSIVE ACTS OR PRACTICES BY RETROACTIVELY APPLYING ITS AUTOMATED FRAUD FILTER TO REVERSE PERMANENT CREDITS FOR UNEMPLOYMENT INSURANCE BENEFIT PREPAID DEBIT CARDHOLDERS WHOSE NOTICES OF ERROR IT HAD PREVIOUSLY INVESTIGATED AND PAID, IN VIOLATION OF SECTIONS 1031 AND 1036 OF THE CFPA, 12 U.S.C. §§ 5531(A) AND (D)(2)(B), 5536(A)(1)(B); (4) ENGAGED IN UNFAIR ACTS OR PRACTICES BY IMPEDING UNEMPLOYMENT INSURANCE BENEFIT PREPAID DEBIT CARDHOLDERS' EFFORTS TO FILE NOTICES OF ERROR AND SEEK LIABILITY PROTECTION FROM UNAUTHORIZED EFTS, IN VIOLATION OF SECTIONS 1031 AND 1036 OF THE CFPA, 12 U.S.C. §§ 5531(A) AND (C), 5536(A)(1)(B); AND (5) FAILED TO TIMELY INVESTIGATE AND RESOLVE UNEMPLOYMENT INSURANCE BENEFIT PREPAID DEBIT CARDHOLDERS' NOTICES OF ERROR CONCERNING ALLEGED UNAUTHORIZED EFTS, IN VIOLATION OF EFTA, 15 U.S.C. § 1693F(A), (C), AND SECTION 1005.11(C)(2)(3) OF REGULATION E.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FAT OF CONCLUSIONS OF LAW CONTAINED WITHIN THE ORDER, THE FIRM CONSENTED TO (A) CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF THE PROVISIONS DETAILED ABOVE, (B) CERTAIN UNDERTAKINGS, (C) PAYMENT OF REDRESS TO AFFECTED CUSTOMERS, AND (D) PAYMENT OF A CIVIL MONETARY PENALTY IN THE AMOUNT OF $100 MILLION.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BANK OF AMERICA, NATIONAL
ASSOCIATION
(For individuals, Last, First,
Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
CONSUMER FINANCIAL PROTECTION BUREAU
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
3.
Date Initiated (MM/DD/YYYY):
07/14/2022
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
FILE NO. 2022-CFPB-0004
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE CONSUMER FINANCIAL PROTECTION BUREAU ("CFPB") ALLEGED THAT BANK OF AMERICA, NATIONAL ASSOCIATION (THE FIRM) (1) ENGAGED IN
UNFAIR ACTS OR PRACTICES BY DETERMINING NO ERROR HAD OCCURRED AND FREEZING CARDHOLDER ACCOUNTS BASED SOLELY ON THE RESULTS OF
ITS AUTOMATED FRAUD FILTER, IN VIOLATION OF SECTIONS 1031 AND 1036 OF THE CONSUMER FINANCIAL PROTECTION ACT OF 2010 (CFPA), 12
U.S.C. §§ 5531(A) AND (C), 5536(A)(1)(B); (2) FAILED TO CONDUCT REASONABLE INVESTIGATIONS OF UNEMPLOYMENT INSURANCE BENEFIT PREPAID
DEBIT CARDHOLDERS' NOTICES OF ERROR, IN VIOLATION OF SECTIONS 908 AND 909 OF THE ELECTRONIC FUND TRANSFER ACT (EFTA), 15 U.S.C. §§
1693F AND 1693G, AND SECTION 1005.11 OF REGULATION E; (3) ENGAGED IN ABUSIVE ACTS OR PRACTICES BY RETROACTIVELY APPLYING ITS
AUTOMATED FRAUD FILTER TO REVERSE PERMANENT CREDITS FOR UNEMPLOYMENT INSURANCE BENEFIT PREPAID DEBIT CARDHOLDERS WHOSE
NOTICES OF ERROR IT HAD PREVIOUSLY INVESTIGATED AND PAID, IN VIOLATION OF SECTIONS 1031 AND 1036 OF THE CFPA, 12 U.S.C. §§ 5531(A)
AND (D)(2)(B), 5536(A)(1)(B); (4) ENGAGED IN UNFAIR ACTS OR PRACTICES BY IMPEDING UNEMPLOYMENT INSURANCE BENEFIT PREPAID DEBIT
CARDHOLDERS' EFFORTS TO FILE NOTICES OF ERROR AND SEEK LIABILITY PROTECTION FROM UNAUTHORIZED EFTS, IN VIOLATION OF SECTIONS 1031
AND 1036 OF THE CFPA, 12 U.S.C. §§ 5531(A) AND (C), 5536(A)(1)(B); AND (5) FAILED TO TIMELY INVESTIGATE AND RESOLVE UNEMPLOYMENT
INSURANCE BENEFIT PREPAID DEBIT CARDHOLDERS' NOTICES OF ERROR CONCERNING ALLEGED UNAUTHORIZED EFTS, IN VIOLATION OF EFTA, 15
U.S.C. § 1693F(A), (C), AND SECTION 1005.11(C)(2)(3) OF REGULATION E.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Consent
11. Resolution Date (MM/DD/YYYY):
07/14/2022
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 100,000,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
UNDERTAKINGS
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FAT OF CONCLUSIONS OF LAW CONTAINED WITHIN THE ORDER, THE FIRM CONSENTED TO
(A) CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF THE PROVISIONS DETAILED ABOVE,
(B) CERTAIN UNDERTAKINGS, (C) PAYMENT OF REDRESS TO AFFECTED CUSTOMERS, AND (D) PAYMENT OF A CIVIL MONETARY PENALTY IN THE
AMOUNT OF $100 MILLION.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FAT OF CONCLUSIONS OF LAW CONTAINED WITHIN THE ORDER, THE FIRM CONSENTED TO (A)
CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF THE PROVISIONS DETAILED ABOVE, (B)
CERTAIN UNDERTAKINGS, (C) PAYMENT OF REDRESS TO AFFECTED CUSTOMERS, AND (D) PAYMENT OF A CIVIL MONETARY PENALTY IN THE AMOUNT OF
$100 MILLION.regulatory · block 32BANK OF AMERICA, NATIONAL ASSOCIATIONPDF pages 594–596
- Advisory affiliate name — filed text
- BANK OF AMERICA, NATIONAL ASSOCIATION
- Regulator name — filed text
- OFFICE OF THE COMPTROLLER OF THE CURRENCY
- Monetary/Fine Amount — filed text
- $ 125,000,000.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS CONTAINED IN THE ORDER, THE FIRM CONSENTED TO A CIVIL MONETARY PENALTY OF $125,000,000.
Other filed details
Description of allegations — filed text
THE OFFICE OF THE COMPTROLLER OF THE CURRENCY ("OCC") ALLEGED THAT BANK OF AMERICA, NATIONAL ASSOCIATION (THE FIRM) (1) IN CONNECTION WITH THE FIRM'S ADMINISTRATION OF PREPAID CARDS FOR UNEMPLOYMENT BENEFITS, ENGAGED IN (I) UNSAFE OR UNSOUND PRACTICE(S), INCLUDING DEFICIENCIES IN ITS RISK MANAGEMENT, OPERATIONAL PROCESSES AND CONTROLS, INTERNAL AUDIT, AND INVESTIGATION AND RESOLUTION OF CONSUMER CLAIMS OF UNAUTHORIZED TRANSACTIONS; AND (II) UNFAIR AND DECEPTIVE PRACTICES IN VIOLATION(S) OF ( ) ( ) SECTION 5 OF THE FEDERAL TRADE COMMISSION ACT ("FTC ACT"), 15 U.S.C. § 45(A)(1); AND (2) ENGAGED IN UNSAFE OR UNSOUND PRACTICES RELATED TO DEFICIENCIES IN ITS ENTERPRISE-WIDE COMPLAINTS RISK MANAGEMENT FRAMEWORK.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS CONTAINED IN THE ORDER, THE FIRM CONSENTED TO A CIVIL MONETARY PENALTY OF $125,000,000.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BANK OF AMERICA, NATIONAL
ASSOCIATION
(For individuals, Last, First,
Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
OFFICE OF THE COMPTROLLER OF THE CURRENCY
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
3.
Date Initiated (MM/DD/YYYY):
07/14/2022
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
AA_ENF-2022-22
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE OFFICE OF THE COMPTROLLER OF THE CURRENCY ("OCC") ALLEGED THAT BANK OF AMERICA, NATIONAL ASSOCIATION (THE FIRM) (1) IN
CONNECTION WITH THE FIRM'S ADMINISTRATION OF PREPAID CARDS FOR UNEMPLOYMENT BENEFITS, ENGAGED IN (I) UNSAFE OR UNSOUND
PRACTICE(S), INCLUDING DEFICIENCIES IN ITS RISK MANAGEMENT, OPERATIONAL PROCESSES AND CONTROLS, INTERNAL AUDIT, AND INVESTIGATION
AND RESOLUTION OF CONSUMER CLAIMS OF UNAUTHORIZED TRANSACTIONS; AND (II) UNFAIR AND DECEPTIVE PRACTICES IN VIOLATION(S) OF
(
)
( )
SECTION 5 OF THE FEDERAL TRADE COMMISSION ACT ("FTC ACT"), 15 U.S.C. § 45(A)(1); AND (2) ENGAGED IN UNSAFE OR UNSOUND PRACTICES
RELATED TO DEFICIENCIES IN ITS ENTERPRISE-WIDE COMPLAINTS RISK MANAGEMENT FRAMEWORK.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Consent
11. Resolution Date (MM/DD/YYYY):
07/14/2022
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 125,000,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE FINDINGS CONTAINED IN THE ORDER, THE FIRM CONSENTED TO A CIVIL MONETARY PENALTY OF
$125,000,000.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE FINDINGS CONTAINED IN THE ORDER, THE FIRM CONSENTED TO A CIVIL MONETARY PENALTY OF $125,000,000.regulatory · block 33BANK OF AMERICA, NATIONAL ASSOCIATIONPDF pages 596–598
- Advisory affiliate name — filed text
- BANK OF AMERICA, NATIONAL ASSOCIATION
- Regulator name — filed text
- BANGKO SENTRAL NG PILIPINAS
- Monetary/Fine Amount — filed text
- $ 244,002.00
- How was matter resolved — filed text
- Other
Action status / disposition — filed text
THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP12,785,711.62 (APPROXIMATELY USD244,002) ON BANA. THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER.
Other filed details
Description of allegations — filed text
THE BANGKO SENTRAL NG PILIPINAS (BSP) APPROVED THE IMPOSITION OF A MONETARY PENALTY ON BANK OF AMERICA, NATIONAL ASSOCIATION (BANA) FOR NON-COMPLIANCE WITH THE MANDATORY CREDIT ALLOCATION FOR AGRARIAN REFORM CREDIT/OTHER AGRICULTURAL CREDIT (AGRI- AGRA) FOR THE QUARTERS ENDED 3-31-2020 THROUGH 12-31-2020.
Sanction detail — filed text
THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP12,785,711.62 (APPROXIMATELY USD244,002) ON BANA. THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: This advisory affiliate is a Firm an Individual Registered: Yes No Name: BANK OF AMERICA, NATIONAL ASSOCIATION (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) BANGKO SENTRAL NG PILIPINAS 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 05/17/2022 Exact Explanation If not exact, provide explanation: DATE RECEIVED FROM THE BANGKO SENTRAL NG PILIPINAS. 4. Docket/Case Number: REF. NO DSA-202207-0027_CMD-L-KB-BA 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: BANK LOANS 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE BANGKO SENTRAL NG PILIPINAS (BSP) APPROVED THE IMPOSITION OF A MONETARY PENALTY ON BANK OF AMERICA, NATIONAL ASSOCIATION (BANA) FOR NON-COMPLIANCE WITH THE MANDATORY CREDIT ALLOCATION FOR AGRARIAN REFORM CREDIT/OTHER AGRICULTURAL CREDIT (AGRI- AGRA) FOR THE QUARTERS ENDED 3-31-2020 THROUGH 12-31-2020. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Other 11. Resolution Date (MM/DD/YYYY): 05/17/2022 Exact Explanation If not exact, provide explanation: DATE RECEIVED FROM THE BANGKO SENTRAL NG PILIPINAS. 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 244,002.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP12,785,711.62 (APPROXIMATELY USD244,002) ON BANA. THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP12,785,711.62 (APPROXIMATELY USD244,002) ON BANA. THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER.
regulatory · block 34BANK OF AMERICA, NATIONAL ASSOCIATIONPDF pages 598–600
- Advisory affiliate name — filed text
- BANK OF AMERICA, NATIONAL ASSOCIATION
- Regulator name — filed text
- BANGKO SENTRAL NG PILIPINAS
- Monetary/Fine Amount — filed text
- $ 223,827.00
- How was matter resolved — filed text
- Other
Action status / disposition — filed text
THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP12,588,039.11 (APPROXIMATELY USD223,827) ON BANA. THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER.
Other filed details
Description of allegations — filed text
THE BANGKO SENTRAL NG PILIPINAS (BSP) APPROVED THE IMPOSITION OF A MONETARY PENALTY ON BANK OF AMERICA, NATIONAL ASSOCIATION (BANA) FOR NON-COMPLIANCE WITH THE MANDATORY CREDIT ALLOCATION FOR AGRARIAN REFORM CREDIT/OTHER AGRICULTURAL CREDIT (AGRI- AGRA) FOR THE QUARTERS ENDED 3-31-2021 THROUGH 12-31-2021.
Sanction detail — filed text
THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP12,588,039.11 (APPROXIMATELY USD223,827) ON BANA. THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: This advisory affiliate is a Firm an Individual Registered: Yes No Name: BANK OF AMERICA, NATIONAL ASSOCIATION (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) BANGKO SENTRAL NG PILIPINAS 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 08/16/2022 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: REF. NO DSA-202207-0124_CMD-L-KB-BA; DTS NO. DSA-2022-07-0126 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: BANK LOANS 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE BANGKO SENTRAL NG PILIPINAS (BSP) APPROVED THE IMPOSITION OF A MONETARY PENALTY ON BANK OF AMERICA, NATIONAL ASSOCIATION (BANA) FOR NON-COMPLIANCE WITH THE MANDATORY CREDIT ALLOCATION FOR AGRARIAN REFORM CREDIT/OTHER AGRICULTURAL CREDIT (AGRI- AGRA) FOR THE QUARTERS ENDED 3-31-2021 THROUGH 12-31-2021. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Other 11. Resolution Date (MM/DD/YYYY): 08/16/2022 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 223,827.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP12,588,039.11 (APPROXIMATELY USD223,827) ON BANA. THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP12,588,039.11 (APPROXIMATELY USD223,827) ON BANA. THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER.
regulatory · block 35BANK OF AMERICA CORPORATIONPDF pages 600–602
- Advisory affiliate name — filed text
- BANK OF AMERICA CORPORATION
- Regulator name — filed text
- BUNDESANSTALT FUR FINANZDIENSTLEISTUNGSAUFSICHT (BAFIN)
- Monetary/Fine Amount — filed text
- $ 5,071,950.00
- How was matter resolved — filed text
- Other
Action status / disposition — filed text
BAFIN IMPOSED A PENALTY IN THE AMOUNT OF EUR5,100,000 (APPROXIMATELY USD5,071,950) ON BAC AND COSTS OF THE PROCEEDING IN THE AMOUNT OF EUR7,500 (APPROXIMATELY USD 7,479). THE PAYMENTS WERE MADE IN ACCORDANCE WITH THE TERMS OF THE ORDER.
Other filed details
Description of allegations — filed text
THE BUNDESANSTALT FUR FINANZDIENSTLEISTUNGSAUFSICHT (BAFIN) APPROVED THE IMPOSITION OF AN ADMINISTRATIVE FINE ON BANK OF AMERICA CORPORATION FOR FAILURE TO TAKE THE SUPERVISORY AND ORGANISATIONAL MEASURES THAT WOULD HAVE BEEN REQUIRED IN ORDER TO ENSURE THE CORRECT AND COMPLETE SUBMISSION OF VOTING RIGHTS NOTIFICATIONS WITHIN THE PRESCRIBED PERIOD, IN BREACH OF SECTION 130(1) OF THE GERMAN ACT ON BREACHES OF ADMINISTRATIVE REGULATIONS IN CONJUNCTION WITH SECTIONS 33 (1) SENTENCE 1, SECTION 38(1) SENTENCE 1 AND 39 (1) OF THE GERMAN SECURITIES TRADING ACT.
Sanction detail — filed text
BAFIN IMPOSED A PENALTY IN THE AMOUNT OF EUR5,100,000 (APPROXIMATELY USD5,071,950) ON BAC AND COSTS OF THE PROCEEDING IN THE AMOUNT OF EUR7,500 (APPROXIMATELY USD 7,479). THE PAYMENTS WERE MADE IN ACCORDANCE WITH THE TERMS OF THE ORDER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: This advisory affiliate is a Firm an Individual Registered: Yes No Name: BANK OF AMERICA CORPORATION (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) BUNDESANSTALT FUR FINANZDIENSTLEISTUNGSAUFSICHT (BAFIN) 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 08/22/2022 Exact Explanation If not exact, provide explanation: RECEIVED ON 08/08/2022, DEEMED FINAL AND BINDING ON 08/22/2022. 4. Docket/Case Number: WA 15-WP 3121-2020/0001; WA 15-WP 3121-2020/0002; WA 15=WP 3121-2020/0003; WA 15-WP 3120-2020/0012 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE BUNDESANSTALT FUR FINANZDIENSTLEISTUNGSAUFSICHT (BAFIN) APPROVED THE IMPOSITION OF AN ADMINISTRATIVE FINE ON BANK OF AMERICA CORPORATION FOR FAILURE TO TAKE THE SUPERVISORY AND ORGANISATIONAL MEASURES THAT WOULD HAVE BEEN REQUIRED IN ORDER TO ENSURE THE CORRECT AND COMPLETE SUBMISSION OF VOTING RIGHTS NOTIFICATIONS WITHIN THE PRESCRIBED PERIOD, IN BREACH OF SECTION 130(1) OF THE GERMAN ACT ON BREACHES OF ADMINISTRATIVE REGULATIONS IN CONJUNCTION WITH SECTIONS 33 (1) SENTENCE 1, SECTION 38(1) SENTENCE 1 AND 39 (1) OF THE GERMAN SECURITIES TRADING ACT. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Other 11. Resolution Date (MM/DD/YYYY): 08/22/2022 Exact Explanation If not exact, provide explanation: RECEIVED ON 08/08/2022, DEEMED FINAL AND BINDING ON 08/22/2022. 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 5,071,950.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: COSTS OF THE PROCEEDING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: BAFIN IMPOSED A PENALTY IN THE AMOUNT OF EUR5,100,000 (APPROXIMATELY USD5,071,950) ON BAC AND COSTS OF THE PROCEEDING IN THE AMOUNT OF EUR7,500 (APPROXIMATELY USD 7,479). THE PAYMENTS WERE MADE IN ACCORDANCE WITH THE TERMS OF THE ORDER. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). BAFIN IMPOSED A PENALTY IN THE AMOUNT OF EUR5,100,000 (APPROXIMATELY USD5,071,950) ON BAC AND COSTS OF THE PROCEEDING IN THE AMOUNT OF EUR7,500 (APPROXIMATELY USD 7,479). THE PAYMENTS WERE MADE IN ACCORDANCE WITH THE TERMS OF THE ORDER.
regulatory · block 36PDF pages 602–604
- Regulator name — filed text
- COMMODITY FUTURES TRADING COMMISSION
- Monetary/Fine Amount — filed text
- $ 100,000,000.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
THE RESPONDENTS ADMITTED TO THE FACTS IN THE SETTLEMENT ORDER, EXCEPT AS TO SECTIONS II.A.2 AND II.C.2 OF THE ORDER, WHICH FACTS THEY NEITHER ADMITTED NOR DENIED, ACKNOWLEDGED THEIR CONDUCT VIOLATED THE ACT AND REGULATIONS AND AGREED TO THE FOLLOWING SANCTIONS: (A) BANA TO CEASE AND DESIST FROM VIOLATING SECTIONS 4S(F)(1)(C), 4S(G)(1) AND (3), AND 4S(H)(1)(B) OF THE ACT, AND REGULATIONS 1.31, 23.201, 23.202(A)(1) AND (B)(1) AND 23.602(A) AND BOFAS AND MLPFS TO CEASE AND DESIST FROM VIOLATING SECTION 4G OF THE ACT AND REGULATIONS 1.31, 1.35 AND 166.3, (B) TO PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $100,000,000, AND (C) TO COMPLY WITH CERTAIN CONDITIONS AND UNDERTAKINGS.
Other filed details
Description of allegations — filed text
THE COMMODITIES FUTURES TRADING COMMISSION ("CFTC") ENTERED INTO A SETTLEMENT ORDER ("ORDER") WITH BOFAS SECURITIES, INC. ("BOFAS"), MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MLPFS"), AND BANK OF AMERICA, N.A. ("BANA", AND COLLECTIVELY WITH BOFAS AND MLPFS, THE "RESPONDENTS") SETTLING AN ADMINISTRATIVE ACTION CONCERNING (A) BANA'S FAILURE TO MAINTAIN REQUIRED RECORDS IN VIOLATION OF SECTIONS 4S(F)(1)(C) AND 4S(G)(1) AND (3) OF THE COMMODITY EXCHANGE ACT ("ACT") AND CFTC REGULATIONS ("REGULATIONS") 23.201(A) AND 23.202(A)(1) AND (B)(1); (B) BOFAS AND MLPFS' FAILURE TO KEEP REQUIRED RECORDS IN VIOLATION OF SECTION 4G OF THE ACT AND REGULATION 1.35; (C) RESPONDENTS' FAILURE TO KEEP RECORDS IN THE REQUIRED MANNER IN VIOLATION OF REGULATION 1.31; (D) BANA'S FAILURE TO SUPERVISE DILIGENTLY IN VIOLATION OF SECTIONS 4S(H)(1)(B) OF THE ACT AND REGULATION 23.602(A); AND (E) BOFAS AND MLPFS' FAILURE TO DILIGENTLY SUPERVISE IN VIOLATION OF REGULATION 166.3.
Sanction detail — filed text
THE RESPONDENTS ADMITTED TO THE FACTS IN THE SETTLEMENT ORDER, EXCEPT AS TO SECTIONS II.A.2 AND II.C.2 OF THE ORDER, WHICH FACTS THEY NEITHER ADMITTED NOR DENIED, ACKNOWLEDGED THEIR CONDUCT VIOLATED THE ACT AND REGULATIONS AND AGREED TO THE FOLLOWING SANCTIONS: (A) BANA TO CEASE AND DESIST FROM VIOLATING SECTIONS 4S(F)(1)(C), 4S(G)(1) AND (3), AND 4S(H)(1)(B) OF THE ACT, AND REGULATIONS 1.31, 23.201, 23.202(A)(1) AND (B)(1) AND 23.602(A) AND BOFAS AND MLPFS TO CEASE AND DESIST FROM VIOLATING SECTION 4G OF THE ACT AND REGULATIONS 1.31, 1.35 AND 166.3, (B) TO PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $100,000,000, AND (C) TO COMPLY WITH CERTAIN CONDITIONS AND UNDERTAKINGS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BANK OF AMERICA, NATIONAL
ASSOCIATION
(For individuals, Last, First,
Middle)
CRD
Number:
283942
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BOFA SECURITIES, INC.
(For individuals, Last, First,
Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
COMMODITY FUTURES TRADING COMMISSION
2.
Principal Sanction:
Cease and Desist
Other Sanctions:
3.
Date Initiated (MM/DD/YYYY):
09/27/2022
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
22-38
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE COMMODITIES FUTURES TRADING COMMISSION ("CFTC") ENTERED INTO A SETTLEMENT ORDER ("ORDER") WITH BOFAS SECURITIES, INC.
("BOFAS"), MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MLPFS"), AND BANK OF AMERICA, N.A. ("BANA", AND COLLECTIVELY WITH
BOFAS AND MLPFS, THE "RESPONDENTS") SETTLING AN ADMINISTRATIVE ACTION CONCERNING (A) BANA'S FAILURE TO MAINTAIN REQUIRED RECORDS
IN VIOLATION OF SECTIONS 4S(F)(1)(C) AND 4S(G)(1) AND (3) OF THE COMMODITY EXCHANGE ACT ("ACT") AND CFTC REGULATIONS ("REGULATIONS")
23.201(A) AND 23.202(A)(1) AND (B)(1); (B) BOFAS AND MLPFS' FAILURE TO KEEP REQUIRED RECORDS IN VIOLATION OF SECTION 4G OF THE ACT AND
REGULATION 1.35; (C) RESPONDENTS' FAILURE TO KEEP RECORDS IN THE REQUIRED MANNER IN VIOLATION OF REGULATION 1.31; (D) BANA'S FAILURE
TO SUPERVISE DILIGENTLY IN VIOLATION OF SECTIONS 4S(H)(1)(B) OF THE ACT AND REGULATION 23.602(A); AND (E) BOFAS AND MLPFS' FAILURE TO
DILIGENTLY SUPERVISE IN VIOLATION OF REGULATION 166.3.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Order
11. Resolution Date (MM/DD/YYYY):
09/27/2022
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 100,000,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
UNDERTAKINGS
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
THE RESPONDENTS ADMITTED TO THE FACTS IN THE SETTLEMENT ORDER, EXCEPT AS TO SECTIONS II.A.2 AND II.C.2 OF THE ORDER, WHICH
FACTS THEY NEITHER ADMITTED NOR DENIED, ACKNOWLEDGED THEIR CONDUCT VIOLATED THE ACT AND REGULATIONS AND AGREED TO THE
FOLLOWING SANCTIONS: (A) BANA TO CEASE AND DESIST FROM VIOLATING SECTIONS 4S(F)(1)(C), 4S(G)(1) AND (3), AND 4S(H)(1)(B) OF THE
ACT, AND REGULATIONS 1.31, 23.201, 23.202(A)(1) AND (B)(1) AND 23.602(A) AND BOFAS AND MLPFS TO CEASE AND DESIST FROM VIOLATING
SECTION 4G OF THE ACT AND REGULATIONS 1.31, 1.35 AND 166.3, (B) TO PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $100,000,000,
AND (C) TO COMPLY WITH CERTAIN CONDITIONS AND UNDERTAKINGS.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
THE RESPONDENTS ADMITTED TO THE FACTS IN THE SETTLEMENT ORDER, EXCEPT AS TO SECTIONS II.A.2 AND II.C.2 OF THE ORDER, WHICH FACTS
THEY NEITHER ADMITTED NOR DENIED, ACKNOWLEDGED THEIR CONDUCT VIOLATED THE ACT AND REGULATIONS AND AGREED TO THE FOLLOWING
SANCTIONS: (A) BANA TO CEASE AND DESIST FROM VIOLATING SECTIONS 4S(F)(1)(C), 4S(G)(1) AND (3), AND 4S(H)(1)(B) OF THE ACT, AND
REGULATIONS 1.31, 23.201, 23.202(A)(1) AND (B)(1) AND 23.602(A) AND BOFAS AND MLPFS TO CEASE AND DESIST FROM VIOLATING SECTION 4G OF
THE ACT AND REGULATIONS 1.31, 1.35 AND 166.3, (B) TO PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $100,000,000, AND (C) TO COMPLY
WITH CERTAIN CONDITIONS AND UNDERTAKINGS.regulatory · block 37BOFA SECURITIES, INC.PDF pages 604–606
- Advisory affiliate name — filed text
- BOFA SECURITIES, INC.
- Regulator name — filed text
- SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 125,000,000.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
BAML ADMITTED TO THE FACTS IN THE SETTLEMENT ORDER, ACKNOWLEDGED THEIR CONDUCT VIOLATED THE FEDERAL SECURITIES LAWS AND AGREED TO: (A) CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS OR ANY FUTURE VIOLATIONS OF SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-4 THEREUNDER, (B) BE CENSURED, (C) PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $125,000,000, AND (D) COMPLY WITH CERTAIN UNDERTAKINGS RELATED TO RETENTION OF ELECTRONIC COMMUNICATIONS.
Other filed details
Description of allegations — filed text
THE SECURITIES AND EXCHANGE COMMISSION ALLEGED, IN CONNECTION WITH THE BROKER-DEALER OFF-CHANNEL COMMUNICATIONS INITIATIVE, THAT BOFA SECURITIES, INC. AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (COLLECTIVELY, BAML) FAILED TO (1) MAINTAIN AND PRESERVE OFF-CHANNEL COMMUNICATIONS RELATED TO THE BUSINESS OF THE BROKER-DEALERS OPERATED BY BAML, IN WILLFUL VIOLATION OF SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND RULE 17A-4(B)(4) THEREUNDER; AND (2) REASONABLY SUPERVISE THEIR EMPLOYEES WITH A VIEW TO PREVENTING OR DETECTING CERTAIN OF THEIR EMPLOYEES' AIDING AND ABETTING VIOLATIONS OF SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-4(B)(4) THEREUNDER, WITHIN THE MEANING OF SECTION 15(B)(4)(E) OF THE EXCHANGE ACT.
Sanction detail — filed text
BAML ADMITTED TO THE FACTS IN THE SETTLEMENT ORDER, ACKNOWLEDGED THEIR CONDUCT VIOLATED THE FEDERAL SECURITIES LAWS AND AGREED TO: (A) CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS OR ANY FUTURE VIOLATIONS OF SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-4 THEREUNDER, (B) BE CENSURED, (C) PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $125,000,000, AND (D) COMPLY WITH CERTAIN UNDERTAKINGS RELATED TO RETENTION OF ELECTRONIC COMMUNICATIONS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
283942
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BOFA SECURITIES, INC.
(For individuals, Last, First,
Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
SECURITIES AND EXCHANGE COMMISSION
2.
Principal Sanction:
Cease and Desist
Other Sanctions:
3.
Date Initiated (MM/DD/YYYY):
09/27/2022
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
FILE NO. 3-21166
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE SECURITIES AND EXCHANGE COMMISSION ALLEGED, IN CONNECTION WITH THE BROKER-DEALER OFF-CHANNEL COMMUNICATIONS INITIATIVE,
THAT BOFA SECURITIES, INC. AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (COLLECTIVELY, BAML) FAILED TO (1) MAINTAIN AND
PRESERVE OFF-CHANNEL COMMUNICATIONS RELATED TO THE BUSINESS OF THE BROKER-DEALERS OPERATED BY BAML, IN WILLFUL VIOLATION OF
SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND RULE 17A-4(B)(4) THEREUNDER; AND (2) REASONABLY SUPERVISE
THEIR EMPLOYEES WITH A VIEW TO PREVENTING OR DETECTING CERTAIN OF THEIR EMPLOYEES' AIDING AND ABETTING VIOLATIONS OF SECTION
17(A) OF THE EXCHANGE ACT AND RULE 17A-4(B)(4) THEREUNDER, WITHIN THE MEANING OF SECTION 15(B)(4)(E) OF THE EXCHANGE ACT.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Order
11. Resolution Date (MM/DD/YYYY):
09/27/2022
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 125,000,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
UNDERTAKINGS
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
BAML ADMITTED TO THE FACTS IN THE SETTLEMENT ORDER, ACKNOWLEDGED THEIR CONDUCT VIOLATED THE FEDERAL SECURITIES LAWS AND
AGREED TO: (A) CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS OR ANY FUTURE VIOLATIONS OF SECTION 17(A) OF THE
EXCHANGE ACT AND RULE 17A-4 THEREUNDER, (B) BE CENSURED, (C) PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $125,000,000, AND
(D) COMPLY WITH CERTAIN UNDERTAKINGS RELATED TO RETENTION OF ELECTRONIC COMMUNICATIONS.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
BAML ADMITTED TO THE FACTS IN THE SETTLEMENT ORDER, ACKNOWLEDGED THEIR CONDUCT VIOLATED THE FEDERAL SECURITIES LAWS AND AGREED
TO: (A) CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS OR ANY FUTURE VIOLATIONS OF SECTION 17(A) OF THE EXCHANGE ACT
AND RULE 17A-4 THEREUNDER, (B) BE CENSURED, (C) PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $125,000,000, AND (D) COMPLY WITH
CERTAIN UNDERTAKINGS RELATED TO RETENTION OF ELECTRONIC COMMUNICATIONS.regulatory · block 38BANK OF AMERICA CORPORATIONPDF pages 606–608
- Advisory affiliate name — filed text
- BANK OF AMERICA CORPORATION
- Regulator name — filed text
- COMMISSIONE NAZIONALE PER LE SOCIETA E LA BORSA (CONSOB)
- Monetary/Fine Amount — filed text
- $ 14,582.00
- How was matter resolved — filed text
- Other
Action status / disposition — filed text
CONSOB IMPOSED A PENALTY IN THE AMOUNT OF EUR15,000 (APPROXIMATELY USD14,582) ON BAC. THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE DECISION.
Other filed details
Description of allegations — filed text
COMMISSIONE NAZIONALE PER LE SOCIETA E LA BORSA (CONSOB) ISSUED A DECISION IMPOSING AN ADMINISTRATIVE FINE ON BANK OF AMERICA CORPORATION (BAC) FOR IN CONNECTION WITH THE LATE COMMUNICATION TO THE PUBLIC OF INSIDE INFORMATION CONCERNING THE DECISION TO EXERCISE THE CALL OF A BOND ISSUED BY BAC BECAUSE THE PRESS RELEASE WAS ISSUED TOO CLOSE IN TIME TO THE DATE OF THE EARLY REDEMPTION IN VIOLATION OF ARTICLE 17, PARAGRAPH 1 OF THE COUNCIL OF 16 APRIL 2014 ON MARKET ABUSE.
Sanction detail — filed text
CONSOB IMPOSED A PENALTY IN THE AMOUNT OF EUR15,000 (APPROXIMATELY USD14,582) ON BAC. THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE DECISION.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: This advisory affiliate is a Firm an Individual Registered: Yes No Name: BANK OF AMERICA CORPORATION (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the y p circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) COMMISSIONE NAZIONALE PER LE SOCIETA E LA BORSA (CONSOB) 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 10/05/2022 Exact Explanation If not exact, provide explanation: DATE OF SERVICE 4. Docket/Case Number: DECISION NO. 22460 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Debt - Corporate Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): COMMISSIONE NAZIONALE PER LE SOCIETA E LA BORSA (CONSOB) ISSUED A DECISION IMPOSING AN ADMINISTRATIVE FINE ON BANK OF AMERICA CORPORATION (BAC) FOR IN CONNECTION WITH THE LATE COMMUNICATION TO THE PUBLIC OF INSIDE INFORMATION CONCERNING THE DECISION TO EXERCISE THE CALL OF A BOND ISSUED BY BAC BECAUSE THE PRESS RELEASE WAS ISSUED TOO CLOSE IN TIME TO THE DATE OF THE EARLY REDEMPTION IN VIOLATION OF ARTICLE 17, PARAGRAPH 1 OF THE COUNCIL OF 16 APRIL 2014 ON MARKET ABUSE. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Other 11. Resolution Date (MM/DD/YYYY): 10/05/2022 Exact Explanation If not exact, provide explanation: DATE OF SERVICE 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 14,582.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: CONSOB IMPOSED A PENALTY IN THE AMOUNT OF EUR15,000 (APPROXIMATELY USD14,582) ON BAC. THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE DECISION. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). CONSOB IMPOSED A PENALTY IN THE AMOUNT OF EUR15,000 (APPROXIMATELY USD14,582) ON BAC. THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE DECISION.
regulatory · block 39BANK OF AMERICA, NATIONAL ASSOCIATIONPDF pages 608–610
- Advisory affiliate name — filed text
- BANK OF AMERICA, NATIONAL ASSOCIATION
- Regulator name — filed text
- BANGKO SENTRAL NG PILIPINAS
- Monetary/Fine Amount — filed text
- $ 121,723.00
- How was matter resolved — filed text
- Other
Action status / disposition — filed text
THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP6,701,462.54 (APPROXIMATELY USD121,723) ON BANA. THE PAYMENT WILL BE MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER.
Other filed details
Description of allegations — filed text
THE BANGKO SENTRAL NG PILIPINAS (BSP) APPROVED THE IMPOSITION OF A MONETARY PENALTY ON BANK OF AMERICA, NATIONAL ASSOCIATION (BANA) FOR NON-COMPLIANCE WITH THE MANDATORY CREDIT ALLOCATION FOR AGRARIAN REFORM CREDIT/OTHER AGRICULTURAL CREDIT (AGRI- AGRA) FOR THE QUARTERS ENDED 3-31-2022 THROUGH 6-30-2022.
Sanction detail — filed text
THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP6,701,462.54 (APPROXIMATELY USD121,723) ON BANA. THE PAYMENT WILL BE MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: This advisory affiliate is a Firm an Individual Registered: Yes No Name: BANK OF AMERICA, NATIONAL ASSOCIATION (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) BANGKO SENTRAL NG PILIPINAS 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 03/16/2023 Exact Explanation If not exact, provide explanation: DATE OF RECEIPT 4. Docket/Case Number: REF. NO DSA-2023-01-0230F_DSA-L-BA; DTS NO. DSA-2023-01-0230 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: BANK LOANS 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE BANGKO SENTRAL NG PILIPINAS (BSP) APPROVED THE IMPOSITION OF A MONETARY PENALTY ON BANK OF AMERICA, NATIONAL ASSOCIATION (BANA) FOR NON-COMPLIANCE WITH THE MANDATORY CREDIT ALLOCATION FOR AGRARIAN REFORM CREDIT/OTHER AGRICULTURAL CREDIT (AGRI- AGRA) FOR THE QUARTERS ENDED 3-31-2022 THROUGH 6-30-2022. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Other 11. Resolution Date (MM/DD/YYYY): 03/16/2023 Exact Explanation If not exact, provide explanation: DATE OF RECEIPT 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 121,723.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP6,701,462.54 (APPROXIMATELY USD121,723) ON BANA. THE PAYMENT WILL BE MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP6,701,462.54 (APPROXIMATELY USD121,723) ON BANA. THE PAYMENT WILL BE MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER.
regulatory · block 40PDF pages 610–611
- Regulator name — filed text
- SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 4,800,000.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AGREED TO: (A) CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS OR ANY FUTURE VIOLATIONS OF SECTIONS 206(2) AND (4) OF THE ADVISERS ACT AND ADVISERS ACT RULE 206(4)-7 THEREUNDER, (B) BE CENSURED, (C) PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $4,800,000, AND (D) PAY DISGORGEMENT IN THE AMOUNT OF $4,134,610 AND PREJUDGMENT INTEREST IN THE AMOUNT OF $760,104. THE CIVIL MONETARY PENALTY, DISGORGEMENT, AND PREJUDGMENT INTEREST WERE PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
Other filed details
Description of allegations — filed text
THE SECURITIES AND EXCHANGE COMMISSION ("SEC") ALLEGED, THAT FROM MAY 12, 2016 TO JUNE 29, 2020 (1) CERTAIN CLIENT AGREEMENTS AND ADV BROCHURES FOR CERTAIN MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MLPF&S") ADVISORY PROGRAMS CONTAINED MATERIAL MISSTATEMENTS BECAUSE WHILE DISCLOSING THAT MLPF&S CHARGED A MARKUP OR MARKDOWN ON FOREIGN CURRENCY EXCHANGES, THE DISCLOSURES DID NOT ALSO STATE THAT AN ADDITIONAL FEE REFERRED TO AS A PRODUCTION CREDIT WAS ALSO CHARGED, IN WILLFUL VIOLATION OF SECTIONS 206(2) AND (4) OF THE INVESTMENT ADVISERS ACT OF 1940 ("ADVISERS ACT") AND ADVISERS ACT RULE 206(4)-7 THEREUNDER AND (2) MLPF&S FAILED TO ADOPT AND IMPLEMENT WRITTEN POLICIES AND PROCEDURES REASONABLY DESIGNED TO PREVENT VIOLATIONS OF THE ADVISERS ACT IN CONNECTION WITH DISCLOSURES RELATING TO CURRENCY TRANSFERS REQUIRING FOREIGN CURRENCY EXCHANGES THAT IT PROCESSED FOR ITS WRAP FEE CLIENTS.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AGREED TO: (A) CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS OR ANY FUTURE VIOLATIONS OF SECTIONS 206(2) AND (4) OF THE ADVISERS ACT AND ADVISERS ACT RULE 206(4)-7 THEREUNDER, (B) BE CENSURED, (C) PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $4,800,000, AND (D) PAY DISGORGEMENT IN THE AMOUNT OF $4,134,610 AND PREJUDGMENT INTEREST IN THE AMOUNT OF $760,104. THE CIVIL MONETARY PENALTY, DISGORGEMENT, AND PREJUDGMENT INTEREST WERE PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
SECURITIES AND EXCHANGE COMMISSION
2.
Principal Sanction:
Cease and Desist
Other Sanctions:
3.
Date Initiated (MM/DD/YYYY):
04/03/2023
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
FILE NO. 3-21356
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE SECURITIES AND EXCHANGE COMMISSION ("SEC") ALLEGED, THAT FROM MAY 12, 2016 TO JUNE 29, 2020 (1) CERTAIN CLIENT AGREEMENTS AND
ADV BROCHURES FOR CERTAIN MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED ("MLPF&S") ADVISORY PROGRAMS CONTAINED MATERIAL
MISSTATEMENTS BECAUSE WHILE DISCLOSING THAT MLPF&S CHARGED A MARKUP OR MARKDOWN ON FOREIGN CURRENCY EXCHANGES, THE
DISCLOSURES DID NOT ALSO STATE THAT AN ADDITIONAL FEE REFERRED TO AS A PRODUCTION CREDIT WAS ALSO CHARGED, IN WILLFUL VIOLATION
OF SECTIONS 206(2) AND (4) OF THE INVESTMENT ADVISERS ACT OF 1940 ("ADVISERS ACT") AND ADVISERS ACT RULE 206(4)-7 THEREUNDER AND (2)
MLPF&S FAILED TO ADOPT AND IMPLEMENT WRITTEN POLICIES AND PROCEDURES REASONABLY DESIGNED TO PREVENT VIOLATIONS OF THE ADVISERS
ACT IN CONNECTION WITH DISCLOSURES RELATING TO CURRENCY TRANSFERS REQUIRING FOREIGN CURRENCY EXCHANGES THAT IT PROCESSED FOR
ITS WRAP FEE CLIENTS.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Order
11. Resolution Date (MM/DD/YYYY):
04/03/2023
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 4,800,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AGREED TO: (A) CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS
OR ANY FUTURE VIOLATIONS OF SECTIONS 206(2) AND (4) OF THE ADVISERS ACT AND ADVISERS ACT RULE 206(4)-7 THEREUNDER, (B) BE
CENSURED, (C) PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $4,800,000, AND (D) PAY DISGORGEMENT IN THE AMOUNT OF $4,134,610
AND PREJUDGMENT INTEREST IN THE AMOUNT OF $760,104. THE CIVIL MONETARY PENALTY, DISGORGEMENT, AND PREJUDGMENT INTEREST
WERE PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AGREED TO: (A) CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS OR
ANY FUTURE VIOLATIONS OF SECTIONS 206(2) AND (4) OF THE ADVISERS ACT AND ADVISERS ACT RULE 206(4)-7 THEREUNDER, (B) BE CENSURED, (C)
PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $4,800,000, AND (D) PAY DISGORGEMENT IN THE AMOUNT OF $4,134,610 AND PREJUDGMENT
INTEREST IN THE AMOUNT OF $760,104. THE CIVIL MONETARY PENALTY, DISGORGEMENT, AND PREJUDGMENT INTEREST WERE PAID IN ACCORDANCE
WITH THE TERMS OF THE ORDER.regulatory · block 41BANK OF AMERICA, NATIONAL ASSOCIATIONPDF pages 611–613
- Advisory affiliate name — filed text
- BANK OF AMERICA, NATIONAL ASSOCIATION
- Regulator name — filed text
- BLOOMBERG SEF LLC
- Monetary/Fine Amount — filed text
- $ 1,750.00
- How was matter resolved — filed text
- Other
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE RULE VIOLATION UPON WHICH THE NOTICE OF FINE IS BASED, THE FIRM WAS ORDERED TO PAY A $1,750 FINE. THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE NOTICE OF FINE.
Other filed details
Description of allegations — filed text
BLOOMBERG SEF LLC ("BLOOMBERG SEF") ALLEGED THAT BANK OF AMERICA, NATIONAL ASSOCIATION ("THE FIRM") FAILED TO NOTIFY BLOOMBERG SEF OF AN ERROR TRADE AND FAILED TO USE BLOOMBERG SEF'S OFFSET AND CORRECT FUNCTIONALITY, IN VIOLATION OF RULE 516.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE RULE VIOLATION UPON WHICH THE NOTICE OF FINE IS BASED, THE FIRM WAS ORDERED TO PAY A $1,750 FINE. THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE NOTICE OF FINE.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BANK OF AMERICA, NATIONAL
ASSOCIATION
(For individuals, Last, First,
Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
BLOOMBERG SEF LLC
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
3.
Date Initiated (MM/DD/YYYY):
04/12/2023
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
N/A
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
BLOOMBERG SEF LLC ("BLOOMBERG SEF") ALLEGED THAT BANK OF AMERICA, NATIONAL ASSOCIATION ("THE FIRM") FAILED TO NOTIFY BLOOMBERG
SEF OF AN ERROR TRADE AND FAILED TO USE BLOOMBERG SEF'S OFFSET AND CORRECT FUNCTIONALITY, IN VIOLATION OF RULE 516.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Other
11. Resolution Date (MM/DD/YYYY):
04/12/2023
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 1,750.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE RULE VIOLATION UPON WHICH THE NOTICE OF FINE IS BASED, THE FIRM WAS ORDERED TO PAY A $1,750
FINE. THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE NOTICE OF FINE.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE RULE VIOLATION UPON WHICH THE NOTICE OF FINE IS BASED, THE FIRM WAS ORDERED TO PAY A $1,750 FINE.
THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE NOTICE OF FINE.regulatory · block 42BANK OF AMERICA, NATIONAL ASSOCIATIONPDF pages 613–615
- Advisory affiliate name — filed text
- BANK OF AMERICA, NATIONAL ASSOCIATION
- Regulator name — filed text
- BLOOMBERG SEF LLC
- Monetary/Fine Amount — filed text
- $ 1,250.00
- How was matter resolved — filed text
- Other
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE RULE VIOLATION UPON WHICH THE NOTICE OF FINE IS BASED, THE FIRM WAS ORDERED TO PAY A $1,250 FINE. THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE NOTICE OF FINE.
Other filed details
Description of allegations — filed text
BLOOMBERG SEF LLC ("BLOOMBERG SEF") ALLEGED THAT BANK OF AMERICA, NATIONAL ASSOCIATION ("THE FIRM") FAILED TO NOTIFY BLOOMBERG SEF OF AN ERROR TRADE AND FAILED TO USE BLOOMBERG SEF'S OFFSET AND CORRECT FUNCTIONALITY, IN VIOLATION OF RULE 516.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE RULE VIOLATION UPON WHICH THE NOTICE OF FINE IS BASED, THE FIRM WAS ORDERED TO PAY A $1,250 FINE. THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE NOTICE OF FINE.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BANK OF AMERICA, NATIONAL
ASSOCIATION
(For individuals, Last, First,
Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
BLOOMBERG SEF LLC
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
3.
Date Initiated (MM/DD/YYYY):
04/12/2023
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
N/A
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
BLOOMBERG SEF LLC ("BLOOMBERG SEF") ALLEGED THAT BANK OF AMERICA, NATIONAL ASSOCIATION ("THE FIRM") FAILED TO NOTIFY BLOOMBERG
SEF OF AN ERROR TRADE AND FAILED TO USE BLOOMBERG SEF'S OFFSET AND CORRECT FUNCTIONALITY, IN VIOLATION OF RULE 516.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Other
11. Resolution Date (MM/DD/YYYY):
04/12/2023
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 1,250.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE RULE VIOLATION UPON WHICH THE NOTICE OF FINE IS BASED, THE FIRM WAS ORDERED TO PAY A $1,250
FINE. THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE NOTICE OF FINE.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE RULE VIOLATION UPON WHICH THE NOTICE OF FINE IS BASED, THE FIRM WAS ORDERED TO PAY A $1,250 FINE.
THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE NOTICE OF FINE.regulatory · block 43BANK OF AMERICA, NATIONAL ASSOCIATIONPDF pages 615–617
- Advisory affiliate name — filed text
- BANK OF AMERICA, NATIONAL ASSOCIATION
- Regulator name — filed text
- BLOOMBERG SEF LLC
- Monetary/Fine Amount — filed text
- $ 2,000.00
- How was matter resolved — filed text
- Other
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE RULE VIOLATION UPON WHICH THE NOTICE OF FINE IS BASED, THE FIRM WAS ORDERED TO PAY A $2,000 FINE. THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE NOTICE OF FINE.
Other filed details
Description of allegations — filed text
BLOOMBERG SEF LLC ("BLOOMBERG SEF") ALLEGED THAT BANK OF AMERICA, NATIONAL ASSOCIATION ("THE FIRM") FAILED TO NOTIFY BLOOMBERG SEF OF AN ERROR TRADE AND FAILED TO USE BLOOMBERG SEF'S OFFSET AND CORRECT FUNCTIONALITY, IN VIOLATION OF RULE 516.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE RULE VIOLATION UPON WHICH THE NOTICE OF FINE IS BASED, THE FIRM WAS ORDERED TO PAY A $2,000 FINE. THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE NOTICE OF FINE.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BANK OF AMERICA, NATIONAL
ASSOCIATION
(For individuals, Last, First,
Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
BLOOMBERG SEF LLC
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
3.
Date Initiated (MM/DD/YYYY):
04/12/2023
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
N/A
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
BLOOMBERG SEF LLC ("BLOOMBERG SEF") ALLEGED THAT BANK OF AMERICA, NATIONAL ASSOCIATION ("THE FIRM") FAILED TO NOTIFY BLOOMBERG
SEF OF AN ERROR TRADE AND FAILED TO USE BLOOMBERG SEF'S OFFSET AND CORRECT FUNCTIONALITY, IN VIOLATION OF RULE 516.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Other
11. Resolution Date (MM/DD/YYYY):
04/12/2023
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 2,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE RULE VIOLATION UPON WHICH THE NOTICE OF FINE IS BASED, THE FIRM WAS ORDERED TO PAY A $2,000
FINE. THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE NOTICE OF FINE.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE RULE VIOLATION UPON WHICH THE NOTICE OF FINE IS BASED, THE FIRM WAS ORDERED TO PAY A $2,000 FINE.
THE PAYMENT WAS MADE IN ACCORDANCE WITH THE TERMS OF THE NOTICE OF FINE.regulatory · block 44PDF pages 617–619
- Regulator name — filed text
- FINANCIAL INDUSTRY REGULATORY AUTHORITY
- Monetary/Fine Amount — filed text
- $ 700,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $700,000. THE FINE WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
Other filed details
Description of allegations — filed text
THE FINANCIAL INDUSTRY REGULATORY AUTHORITY ALLEGED THAT BETWEEN JANUARY 2018 AND JANUARY 2020 REPRESENTATIVES OF MERRILL LYNCH, PIERCE, FENNER & SMITH (THE FIRM) WHO WERE ENROLLED IN THE FIRM'S FINANCIAL ADVISOR DEVELOPMENT PROGRAM AS TRAINEES PLACED THOUSANDS OF TELEMARKETING CALLS TO TELEPHONE NUMBERS THAT APPEARED ON THE NATIONAL DO-NOT-CALL REGISTRY AS WELL AS THE FIRM'S DO-NOT-CALL LIST, IN VIOLATION OF FINRA RULE 3230 AND 2010; AND THE FIRM FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM REASONABLY DESIGNED TO ENSURE THAT TRAINEES DID NOT PLACE UNSOLICITED TELEMARKETING CALLS TO INDIVIDUALS ON THE NATIONAL DO- NOT-CALL REGISTRY AND THE FIRM'S DO-NOT-CALL LIST, IN VIOLATION OF FINRA RULES 3110 AND 2010.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $700,000. THE FINE WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINANCIAL INDUSTRY REGULATORY AUTHORITY 2. Principal Sanction: Censure Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 05/01/2023 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2019062900001 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE FINANCIAL INDUSTRY REGULATORY AUTHORITY ALLEGED THAT BETWEEN JANUARY 2018 AND JANUARY 2020 REPRESENTATIVES OF MERRILL LYNCH, PIERCE, FENNER & SMITH (THE FIRM) WHO WERE ENROLLED IN THE FIRM'S FINANCIAL ADVISOR DEVELOPMENT PROGRAM AS TRAINEES PLACED THOUSANDS OF TELEMARKETING CALLS TO TELEPHONE NUMBERS THAT APPEARED ON THE NATIONAL DO-NOT-CALL REGISTRY AS WELL AS THE FIRM'S DO-NOT-CALL LIST, IN VIOLATION OF FINRA RULE 3230 AND 2010; AND THE FIRM FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM REASONABLY DESIGNED TO ENSURE THAT TRAINEES DID NOT PLACE UNSOLICITED TELEMARKETING CALLS TO INDIVIDUALS ON THE NATIONAL DO- NOT-CALL REGISTRY AND THE FIRM'S DO-NOT-CALL LIST, IN VIOLATION OF FINRA RULES 3110 AND 2010. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 05/01/2023 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 700,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $700,000. THE FINE WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $700,000. THE FINE WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
regulatory · block 45PDF pages 619–621
- Regulator name — filed text
- STATE OF NEW HAMPSHIRE DEPARTMENT OF STATE BUREAU OF SECURITIES REGULATION
- Monetary/Fine Amount — filed text
- $ 650,000.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO: (A) CEASE AND DESIST FROM FURTHER VIOLATIONS OF N.H. RSA 421-B:4- 406(K) THROUGH FAILURE TO REASONABLY SUPERVISE ITS REGISTERED AGENTS PERTAINING TO TELEMARKETING PRACTICES, (B) PAY A FINE IN THE AMOUNT OF $650,000, AND (C) PAY THE NHBSR'S COSTS OF INVESTIGATION IN THE AMOUNT OF $50,000. THE FINE AND COSTS OF INVESTIGATION WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
Other filed details
Description of allegations — filed text
THE STATE OF NEW HAMPSHIRE DEPARTMENT OF STATE BUREAU OF SECURITIES REGULATION (NHBSR) ALLEGED THAT CERTAIN REPRESENTATIVES OF MERRILL LYNCH, PIERCE, FENNER & SMITH (THE FIRM) WHO WERE ENROLLED IN THE FIRM'S FINANCIAL ADVISOR DEVELOPMENT PROGRAM AS TRAINEES DID NOT PROPERLY EMPLOY FIRM-PROVIDED TECHNOLOGY TO PRE-SCREEN POTENTIAL UNSOLICITED TELEMARKETING CALLS AND/OR DID NOT COMPLY WITH SCREENING RESULTS THAT IDENTIFIED PROHIBITED NUMBERS ON THE NATIONAL DO NOT CALL REGISTRY OR THE FIRM'S INTERNAL DO NOT CALL LIST THEREBY RESULTING VIOLATIONS OF CERTAIN FINRA RULES, IN VIOLATION OF NEW HAMPSHIRE REVISED STATUTES ANNOTATED (N.H. RSA) 421-B:4-406(K).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO: (A) CEASE AND DESIST FROM FURTHER VIOLATIONS OF N.H. RSA 421- B:4-406(K) THROUGH FAILURE TO REASONABLY SUPERVISE ITS REGISTERED AGENTS PERTAINING TO TELEMARKETING PRACTICES, (B) PAY A FINE IN THE AMOUNT OF $650,000, AND (C) PAY THE NHBSR'S COSTS OF INVESTIGATION IN THE AMOUNT OF $50,000. THE FINE AND COSTS OF INVESTIGATION WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) STATE OF NEW HAMPSHIRE DEPARTMENT OF STATE BUREAU OF SECURITIES REGULATION 2. Principal Sanction: Cease and Desist Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 05/02/2023 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: I-2022000023 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE STATE OF NEW HAMPSHIRE DEPARTMENT OF STATE BUREAU OF SECURITIES REGULATION (NHBSR) ALLEGED THAT CERTAIN REPRESENTATIVES OF MERRILL LYNCH, PIERCE, FENNER & SMITH (THE FIRM) WHO WERE ENROLLED IN THE FIRM'S FINANCIAL ADVISOR DEVELOPMENT PROGRAM AS TRAINEES DID NOT PROPERLY EMPLOY FIRM-PROVIDED TECHNOLOGY TO PRE-SCREEN POTENTIAL UNSOLICITED TELEMARKETING CALLS AND/OR DID NOT COMPLY WITH SCREENING RESULTS THAT IDENTIFIED PROHIBITED NUMBERS ON THE NATIONAL DO NOT CALL REGISTRY OR THE FIRM'S INTERNAL DO NOT CALL LIST THEREBY RESULTING VIOLATIONS OF CERTAIN FINRA RULES, IN VIOLATION OF NEW HAMPSHIRE REVISED STATUTES ANNOTATED (N.H. RSA) 421-B:4-406(K). 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Order 11. Resolution Date (MM/DD/YYYY): 05/02/2023 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 650,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: COSTS OF INVESTIGATION Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO: (A) CEASE AND DESIST FROM FURTHER VIOLATIONS OF N.H. RSA 421- B:4-406(K) THROUGH FAILURE TO REASONABLY SUPERVISE ITS REGISTERED AGENTS PERTAINING TO TELEMARKETING PRACTICES, (B) PAY A FINE IN THE AMOUNT OF $650,000, AND (C) PAY THE NHBSR'S COSTS OF INVESTIGATION IN THE AMOUNT OF $50,000. THE FINE AND COSTS OF INVESTIGATION WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO: (A) CEASE AND DESIST FROM FURTHER VIOLATIONS OF N.H. RSA 421-B:4- 406(K) THROUGH FAILURE TO REASONABLY SUPERVISE ITS REGISTERED AGENTS PERTAINING TO TELEMARKETING PRACTICES, (B) PAY A FINE IN THE AMOUNT OF $650,000, AND (C) PAY THE NHBSR'S COSTS OF INVESTIGATION IN THE AMOUNT OF $50,000. THE FINE AND COSTS OF INVESTIGATION WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
regulatory · block 46PDF pages 621–622
- Regulator name — filed text
- FINANCIAL INDUSTRY REGULATORY AUTHORITY
- Monetary/Fine Amount — filed text
- $ 6,000,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $6,000,000. THE FINE WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
Other filed details
Description of allegations — filed text
THE FINANCIAL INDUSTRY REGULATORY AUTHORITY ALLEGED THAT BETWEEN JANUARY 2009 AND NOVEMBER 2019, MERRILL LYNCH, PIERCE, FENNER & SMITH (MLPF&S) FAILED TO FILE CERTAIN SUSPICIOUS ACTIVITY REPORTS (SARS) DUE TO THE APPLICATION OF AN INCORRECT MONETARY THRESHOLD FOR REPORTING AND FAILED TO ESTABLISH AND IMPLEMENT POLICIES AND PROCEDURES REASONABLY DESIGNED TO DETECT AND CAUSE THE REPORTING OF SUSPICIOUS ACTIVITY AS REQUIRED BY 31 CFR § 1023.320(A)(2), IN VIOLATION OF NASD RULE 3011(A) AND FINRA RULES 3310(A) AND 2010.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $6,000,000. THE FINE WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINANCIAL INDUSTRY REGULATORY AUTHORITY 2. Principal Sanction: Censure Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 07/11/2023 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2020066667001 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE FINANCIAL INDUSTRY REGULATORY AUTHORITY ALLEGED THAT BETWEEN JANUARY 2009 AND NOVEMBER 2019, MERRILL LYNCH, PIERCE, FENNER & SMITH (MLPF&S) FAILED TO FILE CERTAIN SUSPICIOUS ACTIVITY REPORTS (SARS) DUE TO THE APPLICATION OF AN INCORRECT MONETARY THRESHOLD FOR REPORTING AND FAILED TO ESTABLISH AND IMPLEMENT POLICIES AND PROCEDURES REASONABLY DESIGNED TO DETECT AND CAUSE THE REPORTING OF SUSPICIOUS ACTIVITY AS REQUIRED BY 31 CFR § 1023.320(A)(2), IN VIOLATION OF NASD RULE 3011(A) AND FINRA RULES 3310(A) AND 2010. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 07/11/2023 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 6,000,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $6,000,000. THE FINE WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $6,000,000. THE FINE WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
regulatory · block 47BANK OF AMERICA, NATIONAL ASSOCIATIONPDF pages 622–624
- Advisory affiliate name — filed text
- BANK OF AMERICA, NATIONAL ASSOCIATION
- Regulator name — filed text
- CONSUMER FINANCIAL PROTECTION BUREAU
- Monetary/Fine Amount — filed text
- $ 30,000,000.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, THE FIRM CONSENTED TO (1) THE ENTRY OF THE ORDER, (2) NOT VIOLATE SECTIONS 1031 AND 1036 OF THE CFPA, 12 USC §§ 5531 AND 5536, (3) IDENTIFY AFFECTED CONSUMERS NOT PREVIOUSLY REMEDIATED TO PAY OR PROVIDE REDRESS, (4) CERTAIN UNDERTAKINGS, AND (5) PAYMENT OF A CIVIL MONETARY PENALTY IN THE AMOUNT OF $30,000,000. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
Other filed details
Description of allegations — filed text
THE CONSUMER FINANCIAL PROTECTION BUREAU ("CFPB") ALLEGED THAT BANK OF AMERICA, NATIONAL ASSOCIATION (THE FIRM) (1) WITH RESPECT TO PROMOTIONAL BONUS OFFERS ON REWARDS CREDIT CARDS, CREATED THE DECEPTIVE NET IMPRESSION THAT BONUSES LINKED TO REWARDS CREDIT CARDS WERE AVAILABLE TO ALL CONSUMERS WHEN THOSE BONUSES WERE ONLY AVAILABLE TO CONSUMERS WHO APPLIED ONLINE, AND DENIED BONUSES TO CERTAIN TARGETED CONSUMERS WHO APPLIED IN-PERSON AND OVER THE PHONE; AND (2) WITH RESPECT TO OFFERING CONSUMER CREDIT CARD ACCOUNTS, IN SOME INSTANCES, APPLIED FOR AND OPENED CREDIT CARDS FOR CONSUMERS WITHOUT THEIR CONSENT AND OBTAINED CONSUMER REPORTS FOR THOSE CONSUMERS WITHOUT A PERMISSIBLE PURPOSE. THE CFPB ALLEGES THAT THESE ACTS VIOLATED THE TRUTH IN LENDING ACT, 15 U.S.C. § 1601 ET SEQ., AND ITS IMPLEMENTING REGULATION, REGULATION Z, 12 C.F.R. PART 1026; THE FAIR CREDIT REPORTING ACT (CFPA), 15 U.S.C. § 1681B(F); AND THE CONSUMER FINANCIAL PROTECTION ACT OF 2010, 12 U.S.C. §§ 5531 AND 5536.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, THE FIRM CONSENTED TO (1) THE ENTRY OF THE ORDER, (2) NOT VIOLATE SECTIONS 1031 AND 1036 OF THE CFPA, 12 USC §§ 5531 AND 5536, (3) IDENTIFY AFFECTED CONSUMERS NOT PREVIOUSLY REMEDIATED TO PAY OR PROVIDE REDRESS, (4) CERTAIN UNDERTAKINGS, AND (5) PAYMENT OF A CIVIL MONETARY PENALTY IN THE AMOUNT OF $30,000,000. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BANK OF AMERICA, NATIONAL
ASSOCIATION
(For individuals, Last, First,
Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
CONSUMER FINANCIAL PROTECTION BUREAU
2.
Principal Sanction:
Cease and Desist
Other Sanctions:
3.
Date Initiated (MM/DD/YYYY):
07/11/2023
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
FILE NO. 2023-CFPB-0007
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE CONSUMER FINANCIAL PROTECTION BUREAU ("CFPB") ALLEGED THAT BANK OF AMERICA, NATIONAL ASSOCIATION (THE FIRM) (1) WITH RESPECT
TO PROMOTIONAL BONUS OFFERS ON REWARDS CREDIT CARDS, CREATED THE DECEPTIVE NET IMPRESSION THAT BONUSES LINKED TO REWARDS
CREDIT CARDS WERE AVAILABLE TO ALL CONSUMERS WHEN THOSE BONUSES WERE ONLY AVAILABLE TO CONSUMERS WHO APPLIED ONLINE, AND
DENIED BONUSES TO CERTAIN TARGETED CONSUMERS WHO APPLIED IN-PERSON AND OVER THE PHONE; AND (2) WITH RESPECT TO OFFERING
CONSUMER CREDIT CARD ACCOUNTS, IN SOME INSTANCES, APPLIED FOR AND OPENED CREDIT CARDS FOR CONSUMERS WITHOUT THEIR CONSENT
AND OBTAINED CONSUMER REPORTS FOR THOSE CONSUMERS WITHOUT A PERMISSIBLE PURPOSE. THE CFPB ALLEGES THAT THESE ACTS VIOLATED
THE TRUTH IN LENDING ACT, 15 U.S.C. § 1601 ET SEQ., AND ITS IMPLEMENTING REGULATION, REGULATION Z, 12 C.F.R. PART 1026; THE FAIR CREDIT
REPORTING ACT (CFPA), 15 U.S.C. § 1681B(F); AND THE CONSUMER FINANCIAL PROTECTION ACT OF 2010, 12 U.S.C. §§ 5531 AND 5536.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Consent
11. Resolution Date (MM/DD/YYYY):
07/11/2023
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 30,000,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
UNDERTAKINGS
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, THE FIRM CONSENTED TO (1) THE ENTRY OF THE ORDER,
(2) NOT VIOLATE SECTIONS 1031 AND 1036 OF THE CFPA, 12 USC §§ 5531 AND 5536, (3) IDENTIFY AFFECTED CONSUMERS NOT PREVIOUSLY
REMEDIATED TO PAY OR PROVIDE REDRESS, (4) CERTAIN UNDERTAKINGS, AND (5) PAYMENT OF A CIVIL MONETARY PENALTY IN THE AMOUNT OF
$30,000,000. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, THE FIRM CONSENTED TO (1) THE ENTRY OF THE ORDER, (2)
NOT VIOLATE SECTIONS 1031 AND 1036 OF THE CFPA, 12 USC §§ 5531 AND 5536, (3) IDENTIFY AFFECTED CONSUMERS NOT PREVIOUSLY REMEDIATED
TO PAY OR PROVIDE REDRESS, (4) CERTAIN UNDERTAKINGS, AND (5) PAYMENT OF A CIVIL MONETARY PENALTY IN THE AMOUNT OF $30,000,000. THE
CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.regulatory · block 48BANK OF AMERICA, NATIONAL ASSOCIATIONPDF pages 624–626
- Advisory affiliate name — filed text
- BANK OF AMERICA, NATIONAL ASSOCIATION
- Regulator name — filed text
- CONSUMER FINANCIAL PROTECTION BUREAU
- Monetary/Fine Amount — filed text
- $ 60,000,000.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, THE FIRM CONSENTED TO (1) THE ENTRY OF THE ORDER, (2) NOT VIOLATE SECTIONS 1031 AND 1036 OF THE CFPA, 12 U.S.C. §§ 5531 AND 5536 AND NOT ASSESS REPRESENTMENT NSF FEES, (3) COMPLY WITH CERTAIN UNDERTAKINGS, (4) PAY REDRESS TO AFFECTED CUSTOMERS, AND (5) PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $60 MILLION. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
Other filed details
Description of allegations — filed text
THE CONSUMER FINANCIAL PROTECTION BUREAU (CFPB) ALLEGED THAT BANK OF AMERICA, NATIONAL ASSOCIATION (THE FIRM) COMMITTED UNFAIR ACTS AND PRACTICES WHEN IT CHARGED CONSUMERS REPEAT NON-SUFFICIENT FUNDS (NSF) FEES ON TRANSACTIONS RESUBMITTED TO THE FIRM FOR PAYMENT AFTER THEY WERE INITIALLY DECLINED (RE-PRESENTMENT FEES) IN VIOLATION OF SECTIONS 1031 AND 1036 OF THE CONSUMER FINANCIAL PROTECTION ACT OF 2010 (CFPA), 12 U.S.C. §§ 5531(A) AND (C)(1), 5536(A)(1)(B).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, THE FIRM CONSENTED TO (1) THE ENTRY OF THE ORDER, (2) NOT VIOLATE SECTIONS 1031 AND 1036 OF THE CFPA, 12 U.S.C. §§ 5531 AND 5536 AND NOT ASSESS REPRESENTMENT NSF FEES, (3) COMPLY WITH CERTAIN UNDERTAKINGS, (4) PAY REDRESS TO AFFECTED CUSTOMERS, AND (5) PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $60 MILLION. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: This advisory affiliate is a Firm an Individual Registered: Yes No Name: BANK OF AMERICA, NATIONAL ASSOCIATION (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) CONSUMER FINANCIAL PROTECTION BUREAU 2. Principal Sanction: Cease and Desist Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 07/11/2023 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: FILE NO. 2023-CFPB-0006 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE CONSUMER FINANCIAL PROTECTION BUREAU (CFPB) ALLEGED THAT BANK OF AMERICA, NATIONAL ASSOCIATION (THE FIRM) COMMITTED UNFAIR ACTS AND PRACTICES WHEN IT CHARGED CONSUMERS REPEAT NON-SUFFICIENT FUNDS (NSF) FEES ON TRANSACTIONS RESUBMITTED TO THE FIRM FOR PAYMENT AFTER THEY WERE INITIALLY DECLINED (RE-PRESENTMENT FEES) IN VIOLATION OF SECTIONS 1031 AND 1036 OF THE CONSUMER FINANCIAL PROTECTION ACT OF 2010 (CFPA), 12 U.S.C. §§ 5531(A) AND (C)(1), 5536(A)(1)(B). 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Consent 11. Resolution Date (MM/DD/YYYY): 07/11/2023 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 60,000,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKINGS Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, THE FIRM CONSENTED TO (1) THE ENTRY OF THE ORDER, (2) NOT VIOLATE SECTIONS 1031 AND 1036 OF THE CFPA, 12 U.S.C. §§ 5531 AND 5536 AND NOT ASSESS REPRESENTMENT NSF FEES, (3) COMPLY WITH CERTAIN UNDERTAKINGS, (4) PAY REDRESS TO AFFECTED CUSTOMERS, AND (5) PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $60 MILLION. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, THE FIRM CONSENTED TO (1) THE ENTRY OF THE ORDER, (2) NOT VIOLATE SECTIONS 1031 AND 1036 OF THE CFPA, 12 U.S.C. §§ 5531 AND 5536 AND NOT ASSESS REPRESENTMENT NSF FEES, (3) COMPLY WITH CERTAIN UNDERTAKINGS, (4) PAY REDRESS TO AFFECTED CUSTOMERS, AND (5) PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $60 MILLION. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
regulatory · block 49BANK OF AMERICA, NATIONAL ASSOCIATIONPDF pages 626–628
- Advisory affiliate name — filed text
- BANK OF AMERICA, NATIONAL ASSOCIATION
- Regulator name — filed text
- OFFICE OF THE COMPTROLLER OF THE CURRENCY
- Monetary/Fine Amount — filed text
- $ 60,000,000.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS CONTAINED IN THE ORDER, THE FIRM CONSENTED TO PAY A CIVIL PENALTY IN THE AMOUNT OF $60 MILLION. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
Other filed details
Description of allegations — filed text
THE OFFICE OF THE COMPTROLLER OF THE CURRENCY ("OCC") ALLEGED THAT BANK OF AMERICA, NATIONAL ASSOCIATION (THE FIRM) ASSESSED MULTIPLE OVERDRAFT AND INSUFFICIENT FUNDS FEES AGAINST CUSTOMERS FOR A SINGLE TRANSACTION IN VIOLATION OF SECTION 5 OF THE FEDERAL TRADE COMMISSION ACT ("FTC ACT"), 15 U.S.C. § 45(A)(1).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS CONTAINED IN THE ORDER, THE FIRM CONSENTED TO PAY A CIVIL PENALTY IN THE AMOUNT OF $60 MILLION. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BANK OF AMERICA, NATIONAL
ASSOCIATION
(For individuals, Last, First,
Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
OFFICE OF THE COMPTROLLER OF THE CURRENCY
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
3.
Date Initiated (MM/DD/YYYY):
07/11/2023
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
AA-ENF-2023-19
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE OFFICE OF THE COMPTROLLER OF THE CURRENCY ("OCC") ALLEGED THAT BANK OF AMERICA, NATIONAL ASSOCIATION (THE FIRM) ASSESSED
MULTIPLE OVERDRAFT AND INSUFFICIENT FUNDS FEES AGAINST CUSTOMERS FOR A SINGLE TRANSACTION IN VIOLATION OF SECTION 5 OF THE
FEDERAL TRADE COMMISSION ACT ("FTC ACT"), 15 U.S.C. § 45(A)(1).
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Consent
11. Resolution Date (MM/DD/YYYY):
07/11/2023
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 60,000,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE FINDINGS CONTAINED IN THE ORDER, THE FIRM CONSENTED TO PAY A CIVIL PENALTY IN THE AMOUNT OF
$60 MILLION. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE FINDINGS CONTAINED IN THE ORDER, THE FIRM CONSENTED TO PAY A CIVIL PENALTY IN THE AMOUNT OF $60
MILLION. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.regulatory · block 50BAC NORTH AMERICA HOLDING CO.PDF pages 628–630
- Advisory affiliate name — filed text
- BAC NORTH AMERICA HOLDING CO.
- Regulator name — filed text
- SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 6,000,000.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AND BACNAH AGREED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS OR ANY FUTURE VIOLATIONS OF SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-8 THEREUNDER, MLPF&S WAS CENSURED, AND MLPF&S AGREED TO PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $6,000,000. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
Other filed details
Description of allegations — filed text
THE SECURITIES AND EXCHANGE COMMISSION (SEC) ALLEGED THAT FROM JANUARY 2009 TO NOVEMBER 2019, (1) MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPF&S) FAILED TO FILE CERTAIN REQUIRED SUSPICIOUS ACTIVITY REPORTS (SARS), IN WILLFUL VIOLATION OF SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (EXCHANGE ACT) AND RULE 17A-8 THEREUNDER, IN CONNECTION WITH THE APPLICATION OF AN INCORRECT MONETARY THRESHOLD FOR CERTAIN TYPES OF SAR FILINGS; AND (2) BAC NORTH AMERICA HOLDING CO. (BACNAH) CAUSED MLPF&S'S VIOLATIONS.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AND BACNAH AGREED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS OR ANY FUTURE VIOLATIONS OF SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-8 THEREUNDER, MLPF&S WAS CENSURED, AND MLPF&S AGREED TO PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $6,000,000. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: This advisory affiliate is a Firm an Individual Registered: Yes No Name: BAC NORTH AMERICA HOLDING CO. (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) SECURITIES AND EXCHANGE COMMISSION 2. Principal Sanction: Cease and Desist Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 07/11/2023 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: FILE NO. 3-21524 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE SECURITIES AND EXCHANGE COMMISSION (SEC) ALLEGED THAT FROM JANUARY 2009 TO NOVEMBER 2019, (1) MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPF&S) FAILED TO FILE CERTAIN REQUIRED SUSPICIOUS ACTIVITY REPORTS (SARS), IN WILLFUL VIOLATION OF SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (EXCHANGE ACT) AND RULE 17A-8 THEREUNDER, IN CONNECTION WITH THE APPLICATION OF AN INCORRECT MONETARY THRESHOLD FOR CERTAIN TYPES OF SAR FILINGS; AND (2) BAC NORTH AMERICA HOLDING CO. (BACNAH) CAUSED MLPF&S'S VIOLATIONS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Order 11. Resolution Date (MM/DD/YYYY): 07/11/2023 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 6,000,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AND BACNAH AGREED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS OR ANY FUTURE VIOLATIONS OF SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-8 THEREUNDER, MLPF&S WAS CENSURED, AND MLPF&S AGREED TO PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $6,000,000. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AND BACNAH AGREED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS OR ANY FUTURE VIOLATIONS OF SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-8 THEREUNDER, MLPF&S WAS CENSURED, AND MLPF&S AGREED TO PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $6,000,000. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
regulatory · block 51PDF pages 630–632
- Regulator name — filed text
- COMMODITY FUTURES TRADING COMMISSION
- Monetary/Fine Amount — filed text
- $ 8,000,000.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
BOFA ADMITTED TO THE FACTS IN THE SETTLEMENT ORDER, ACKNOWLEDGED THEIR CONDUCT VIOLATED THE ACT AND REGULATIONS AND AGREED TO THE FOLLOWING SANCTIONS: (A) TO CEASE AND DESIST FROM VIOLATING SECTIONS 2(A)(13)(F) AND (G) AND 4S(H)(1)(B) OF THE ACT, AND REGULATIONS 23.602(A), 43.3, 45.3, 45.4, AND 45.14, (B) TO PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $8,000,000, AND (C) TO COMPLY WITH CERTAIN CONDITIONS AND UNDERTAKINGS.
Other filed details
Description of allegations — filed text
THE COMMODITY FUTURES TRADING COMMISSION ("CFTC") ENTERED INTO A SETTLEMENT ORDER ("ORDER") WITH BANK OF AMERICA, N.A. ("BANA") AND MERRILL LYNCH INTERNATIONAL ("MLI", AND COLLECTIVELY WITH BANA, ("BOFA")). SETTLING AN ADMINISTRATIVE ACTION CONCERNING BOFA'S (A) FAILURE TO ACCURATELY REPORT SWAP DATA IN VIOLATION OF SECTION 2(A)(13)(F) AND (G) OF THE COMMODITY EXCHANGE ACT ("ACT") AND CFTC REGULATIONS ("REGULATIONS") 43.3, 45.3, 45.4, AND 45.14 AND (B) FAILURE TO DILIGENTLY SUPERVISE THE BANA AND MLI SWAP DEALER BUSINESSES IN VIOLATION OF SECTION 4S(H)(1)(B) OF THE ACT AND REGULATION 23.602(A).
Sanction detail — filed text
BOFA ADMITTED TO THE FACTS IN THE SETTLEMENT ORDER, ACKNOWLEDGED THEIR CONDUCT VIOLATED THE ACT AND REGULATIONS AND AGREED TO THE FOLLOWING SANCTIONS: (A) TO CEASE AND DESIST FROM VIOLATING SECTIONS 2(A)(13)(F) AND (G) AND 4S(H)(1)(B) OF THE ACT, AND REGULATIONS 23.602(A), 43.3, 45.3, 45.4, AND 45.14, (B) TO PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $8,000,000, AND (C) TO COMPLY WITH CERTAIN CONDITIONS AND UNDERTAKINGS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BANK OF AMERICA, NATIONAL
ASSOCIATION
(For individuals, Last, First,
Middle)
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
MERRILL LYNCH
INTERNATIONAL
(For individuals, Last, First,
Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
COMMODITY FUTURES TRADING COMMISSION
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CEASE AND DESIST, UNDERTAKING
3.
Date Initiated (MM/DD/YYYY):
09/29/2023
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
CFTC DOCKET NO. 23-58
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types:
SWAP TRANSACTION REPORTING
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE COMMODITY FUTURES TRADING COMMISSION ("CFTC") ENTERED INTO A SETTLEMENT ORDER ("ORDER") WITH BANK OF AMERICA, N.A. ("BANA")
AND MERRILL LYNCH INTERNATIONAL ("MLI", AND COLLECTIVELY WITH BANA, ("BOFA")). SETTLING AN ADMINISTRATIVE ACTION CONCERNING BOFA'S
(A) FAILURE TO ACCURATELY REPORT SWAP DATA IN VIOLATION OF SECTION 2(A)(13)(F) AND (G) OF THE COMMODITY EXCHANGE ACT ("ACT") AND
CFTC REGULATIONS ("REGULATIONS") 43.3, 45.3, 45.4, AND 45.14 AND (B) FAILURE TO DILIGENTLY SUPERVISE THE BANA AND MLI SWAP DEALER
BUSINESSES IN VIOLATION OF SECTION 4S(H)(1)(B) OF THE ACT AND REGULATION 23.602(A).
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Order
11. Resolution Date (MM/DD/YYYY):
09/29/2023
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 8,000,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
UNDERTAKINGS
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
BOFA ADMITTED TO THE FACTS IN THE SETTLEMENT ORDER, ACKNOWLEDGED THEIR CONDUCT VIOLATED THE ACT AND REGULATIONS AND
AGREED TO THE FOLLOWING SANCTIONS: (A) TO CEASE AND DESIST FROM VIOLATING SECTIONS 2(A)(13)(F) AND (G) AND 4S(H)(1)(B) OF THE
ACT, AND REGULATIONS 23.602(A), 43.3, 45.3, 45.4, AND 45.14, (B) TO PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $8,000,000, AND (C)
TO COMPLY WITH CERTAIN CONDITIONS AND UNDERTAKINGS.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
BOFA ADMITTED TO THE FACTS IN THE SETTLEMENT ORDER, ACKNOWLEDGED THEIR CONDUCT VIOLATED THE ACT AND REGULATIONS AND AGREED TO
THE FOLLOWING SANCTIONS: (A) TO CEASE AND DESIST FROM VIOLATING SECTIONS 2(A)(13)(F) AND (G) AND 4S(H)(1)(B) OF THE ACT, AND
REGULATIONS 23.602(A), 43.3, 45.3, 45.4, AND 45.14, (B) TO PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $8,000,000, AND (C) TO COMPLY
WITH CERTAIN CONDITIONS AND UNDERTAKINGS.regulatory · block 52BANK OF AMERICA, NATIONAL ASSOCIATIONPDF pages 632–634
- Advisory affiliate name — filed text
- BANK OF AMERICA, NATIONAL ASSOCIATION
- Regulator name — filed text
- RESERVE BANK OF INDIA
- Monetary/Fine Amount — filed text
- $ 120.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
RBI IMPOSED A FINE IN THE AMOUNT OF INR10,000 (APPROXIMATELY USD120) ON BANA. THE FINE WAS PAID AS DIRECTED.
Other filed details
Description of allegations — filed text
THE RESERVE BANK OF INDIA (RBI) ISSUED A SPEAKING ORDER AND IMPOSED A MONETARY PENALTY AGAINST BANK OF AMERICA, NATIONAL ASSOCIATION (BANA) FOR ALLEGEDLY CONTRAVENING INSTRUCTIONS ISSUED TO AD BANKS VIDE A.P. (DIR SERIES) CIRCULAR NO. 23 DATED APRIL 12, 2018 BY FAILING TO UPLOAD CERTAIN INFORMATION RELATED TO TRANSACTIONS UNDERTAKEN UNDER THE LIBERALISED REMITTANCE SCHEME.
Sanction detail — filed text
RBI IMPOSED A FINE IN THE AMOUNT OF INR10,000 (APPROXIMATELY USD120) ON BANA. THE FINE WAS PAID AS DIRECTED.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: This advisory affiliate is a Firm an Individual Registered: Yes No Name: BANK OF AMERICA, NATIONAL ASSOCIATION (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) RESERVE BANK OF INDIA 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 11/13/2023 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: CO.FED.EPD.NO. 21.53.003/2023-2024 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE RESERVE BANK OF INDIA (RBI) ISSUED A SPEAKING ORDER AND IMPOSED A MONETARY PENALTY AGAINST BANK OF AMERICA, NATIONAL ASSOCIATION (BANA) FOR ALLEGEDLY CONTRAVENING INSTRUCTIONS ISSUED TO AD BANKS VIDE A.P. (DIR SERIES) CIRCULAR NO. 23 DATED APRIL 12, 2018 BY FAILING TO UPLOAD CERTAIN INFORMATION RELATED TO TRANSACTIONS UNDERTAKEN UNDER THE LIBERALISED REMITTANCE SCHEME. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Order 11. Resolution Date (MM/DD/YYYY): 11/30/2023 Exact Explanation If not exact, provide explanation: DATE OF THE NOTICE OF IMPOSITION OF PENALTY WAS PUBLISHED. 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 120.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: RBI IMPOSED A FINE IN THE AMOUNT OF INR10,000 (APPROXIMATELY USD120) ON BANA. THE FINE WAS PAID AS DIRECTED. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). RBI IMPOSED A FINE IN THE AMOUNT OF INR10,000 (APPROXIMATELY USD120) ON BANA. THE FINE WAS PAID AS DIRECTED.
regulatory · block 53BANK OF AMERICA, NATIONAL ASSOCIATIONPDF pages 634–636
- Advisory affiliate name — filed text
- BANK OF AMERICA, NATIONAL ASSOCIATION
- Regulator name — filed text
- CONSUMER FINANCIAL PROTECTION BUREAU
- Monetary/Fine Amount — filed text
- $ 12,000,000.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, THE FIRM CONSENTED TO (1) THE ENTRY OF THE CONSENT ORDER, (2) NOT VIOLATE THE HMDA, 12 U.S.C. §§ 28012810, AND REGULATION C, 12 C.F.R. PT. 1003, (3) CERTAIN UNDERTAKINGS, AND (4) PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $12,000,000. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
Other filed details
Description of allegations — filed text
THE CONSUMER FINANCIAL PROTECTION BUREAU ("CFPB") ALLEGED THAT BANK OF AMERICA, NATIONAL ASSOCIATION (THE FIRM) FAILED TO ACCURATELY COLLECT, RECORD, AND REPORT INFORMATION ON MORTGAGE LOAN APPLICANTS' RACE, ETHNICITY, AND SEX, IN VIOLATION OF SECTION 2803 OF THE HOME MORTGAGE DISCLOSURE ACT ("HDMA"), REGULATION C, 12 C.F.R. §§ 1003.4, 1003.5, AND SECTION 1036(A)(1)(A) OF THE CONSUMER FINANCIAL PROTECTION ACT OF 2010 ("CFPA"), 12 U.S.C. § 5536(A)(1)(A).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, THE FIRM CONSENTED TO (1) THE ENTRY OF THE CONSENT ORDER, (2) NOT VIOLATE THE HMDA, 12 U.S.C. §§ 28012810, AND REGULATION C, 12 C.F.R. PT. 1003, (3) CERTAIN UNDERTAKINGS, AND (4) PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $12,000,000. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BANK OF AMERICA, NATIONAL
ASSOCIATION
(For individuals, Last, First,
Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
CONSUMER FINANCIAL PROTECTION BUREAU
2.
Principal Sanction:
Cease and Desist
Other Sanctions:
3.
Date Initiated (MM/DD/YYYY):
11/28/2023
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
FILE NO. 2023-CFPB-0016
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE CONSUMER FINANCIAL PROTECTION BUREAU ("CFPB") ALLEGED THAT BANK OF AMERICA, NATIONAL ASSOCIATION (THE FIRM) FAILED TO
ACCURATELY COLLECT, RECORD, AND REPORT INFORMATION ON MORTGAGE LOAN APPLICANTS' RACE, ETHNICITY, AND SEX, IN VIOLATION OF SECTION
2803 OF THE HOME MORTGAGE DISCLOSURE ACT ("HDMA"), REGULATION C, 12 C.F.R. §§ 1003.4, 1003.5, AND SECTION 1036(A)(1)(A) OF THE
CONSUMER FINANCIAL PROTECTION ACT OF 2010 ("CFPA"), 12 U.S.C. § 5536(A)(1)(A).
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Consent
11. Resolution Date (MM/DD/YYYY):
11/28/2023
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 12,000,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
UNDERTAKINGS
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, THE FIRM CONSENTED TO (1) THE ENTRY OF THE CONSENT
ORDER, (2) NOT VIOLATE THE HMDA, 12 U.S.C. §§ 28012810, AND REGULATION C, 12 C.F.R. PT. 1003, (3) CERTAIN UNDERTAKINGS, AND (4) PAY
A CIVIL MONETARY PENALTY IN THE AMOUNT OF $12,000,000. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF
THE ORDER.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT OR CONCLUSIONS OF LAW, THE FIRM CONSENTED TO (1) THE ENTRY OF THE CONSENT
ORDER, (2) NOT VIOLATE THE HMDA, 12 U.S.C. §§ 28012810, AND REGULATION C, 12 C.F.R. PT. 1003, (3) CERTAIN UNDERTAKINGS, AND (4) PAY A
CIVIL MONETARY PENALTY IN THE AMOUNT OF $12,000,000. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE
ORDER.regulatory · block 54BANK OF AMERICA, NATIONAL ASSOCIATIONPDF pages 636–638
- Advisory affiliate name — filed text
- BANK OF AMERICA, NATIONAL ASSOCIATION
- Regulator name — filed text
- BANGKO SENTRAL NG PILIPINAS
- Monetary/Fine Amount — filed text
- $ 877.00
- How was matter resolved — filed text
- Other
Action status / disposition — filed text
THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP49,200.00 (APPROXIMATELY USD877) ON BANA. THE PAYMENT WILL BE MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER.
Other filed details
Description of allegations — filed text
THE BANGKO SENTRAL NG PILIPINAS (BSP) APPROVED THE IMPOSITION OF A MONETARY PENALTY ON BANK OF AMERICA, NATIONAL ASSOCIATION (BANA) FOR CERTAIN REPORTING VIOLATIONS BETWEEN MARCH 31, 2022 AND SEPTEMBER 30, 2022.
Sanction detail — filed text
THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP49,200.00 (APPROXIMATELY USD877) ON BANA. THE PAYMENT WILL BE MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: This advisory affiliate is a Firm an Individual Registered: Yes No Name: BANK OF AMERICA, NATIONAL ASSOCIATION (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) BANGKO SENTRAL NG PILIPINAS 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 02/05/2024 Exact Explanation If not exact, provide explanation: DATE OF RECEIPT 4. Docket/Case Number: REF. NO DSA-2023-05-0192G-DSA-L-BA 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE BANGKO SENTRAL NG PILIPINAS (BSP) APPROVED THE IMPOSITION OF A MONETARY PENALTY ON BANK OF AMERICA, NATIONAL ASSOCIATION (BANA) FOR CERTAIN REPORTING VIOLATIONS BETWEEN MARCH 31, 2022 AND SEPTEMBER 30, 2022. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Other 11. Resolution Date (MM/DD/YYYY): 02/05/2024 Exact Explanation If not exact, provide explanation: DATE OF RECEIPT 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 877.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP49,200.00 (APPROXIMATELY USD877) ON BANA. THE PAYMENT WILL BE MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP49,200.00 (APPROXIMATELY USD877) ON BANA. THE PAYMENT WILL BE MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER.
regulatory · block 55BANK OF AMERICA, NATIONAL ASSOCIATIONPDF pages 638–640
- Advisory affiliate name — filed text
- BANK OF AMERICA, NATIONAL ASSOCIATION
- Regulator name — filed text
- BANGKO SENTRAL NG PILIPINAS
- Monetary/Fine Amount — filed text
- $ 59,030.00
- How was matter resolved — filed text
- Other
Action status / disposition — filed text
THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP3,309,740.78 (APPROXIMATELY USD59,030) ON BANA. THE PAYMENT WILL BE MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER.
Other filed details
Description of allegations — filed text
THE BANGKO SENTRAL NG PILIPINAS (BSP) APPROVED THE IMPOSITION OF A MONETARY PENALTY ON BANK OF AMERICA, NATIONAL ASSOCIATION (BANA) FOR NON-COMPLIANCE WITH THE MANDATORY CREDIT ALLOCATION FOR AGRICULTURE, FISHERIES AND RURAL DEVELOPMENT (AFRD) FOR THE QUARTERS ENDED 9-30-2022 THROUGH 12-31-2022.
Sanction detail — filed text
THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP3,309,740.78 (APPROXIMATELY USD59,030) ON BANA. THE PAYMENT WILL BE MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: This advisory affiliate is a Firm an Individual Registered: Yes No Name: BANK OF AMERICA, NATIONAL ASSOCIATION (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) BANGKO SENTRAL NG PILIPINAS 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 01/22/2024 Exact Explanation If not exact, provide explanation: DATE OF RECEIPT 4. Docket/Case Number: REF. NO DSA-2024-01-0136AA-DSA-L-BA 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: BANK LOANS 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE BANGKO SENTRAL NG PILIPINAS (BSP) APPROVED THE IMPOSITION OF A MONETARY PENALTY ON BANK OF AMERICA, NATIONAL ASSOCIATION (BANA) FOR NON-COMPLIANCE WITH THE MANDATORY CREDIT ALLOCATION FOR AGRICULTURE, FISHERIES AND RURAL DEVELOPMENT (AFRD) FOR THE QUARTERS ENDED 9-30-2022 THROUGH 12-31-2022. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Other 11. Resolution Date (MM/DD/YYYY): 01/22/2024 Exact Explanation If not exact, provide explanation: DATE OF RECEIPT 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 59,030.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP3,309,740.78 (APPROXIMATELY USD59,030) ON BANA. THE PAYMENT WILL BE MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP3,309,740.78 (APPROXIMATELY USD59,030) ON BANA. THE PAYMENT WILL BE MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER.
regulatory · block 56PDF pages 640–641
- Regulator name — filed text
- FINANCIAL INDUSTRY REGULATORY AUTHORITY
- Monetary/Fine Amount — filed text
- $ 825,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AGREED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $825,000, AND CERTAIN UNDERTAKINGS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
Other filed details
Description of allegations — filed text
THE FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA) ALLEGED THAT MERRILL LYNCH, PIERCE, FENNER & SMITH (MLPF&S) FAILED TO REASONABLY SUPERVISE THE EXECUTION TIMELINESS OF CUSTOMER ORDERS AND THE ACCURACY OF MEMORANDA FOR RETAIL BROKERAGE EQUITY ORDERS MLPF&S RECEIVED ELECTRONICALLY, IN VIOLATION OF FINRA RULES 3110(A) AND (B) AND 2010.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AGREED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $825,000, AND CERTAIN UNDERTAKINGS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINANCIAL INDUSTRY REGULATORY AUTHORITY 2. Principal Sanction: Censure Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 05/09/2024 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2017054488401 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: UNSPECIFIED CUSTOMER ORDERS 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA) ALLEGED THAT MERRILL LYNCH, PIERCE, FENNER & SMITH (MLPF&S) FAILED TO REASONABLY SUPERVISE THE EXECUTION TIMELINESS OF CUSTOMER ORDERS AND THE ACCURACY OF MEMORANDA FOR RETAIL BROKERAGE EQUITY ORDERS MLPF&S RECEIVED ELECTRONICALLY, IN VIOLATION OF FINRA RULES 3110(A) AND (B) AND 2010. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 05/09/2024 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 825,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKINGS Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AGREED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $825,000, AND CERTAIN UNDERTAKINGS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AGREED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $825,000, AND CERTAIN UNDERTAKINGS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
regulatory · block 57PDF pages 641–643
- Regulator name — filed text
- FINANCIAL INDUSTRY REGULATORY AUTHORITY
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO PAY RESTITUTION TO AFFECTED CUSTOMERS TOTALING $1,486,380, PLUS INTEREST. THE FIRM WILL MAKE THESE PAYMENTS IN ACCORDANCE WITH TERMS OF THE AWC. FINRA ALSO RECOGNIZED THE FIRM'S EXTRAORDINARY COOPERATION IN CONNECTION WITH THE MATTER.
Other filed details
Description of allegations — filed text
THE FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA) FOUND THAT MERRILL LYNCH, PIERCE, FENNER & SMITH (THE FIRM), IN CONNECTION WITH BROKERAGE TRANSACTIONS INVOLVING CERTAIN PRODUCTS ELIGIBLE FOR ADVISORY FEE WAIVERS, FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM AND WRITTEN PROCEDURES REASONABLY DESIGNED TO ENSURE THAT ITS REGISTERED REPRESENTATIVES HAD A REASONABLE BASIS TO BELIEVE THEIR RECOMMENDATIONS WERE SUITABLE OR IN EACH CUSTOMER'S BEST INTEREST BETWEEN JANUARY 2018 AND JUNE 2022, IN VIOLATION OF FINRA RULES 3110 AND 2010; AND FAILED TO COMPLY WITH THE COMPLIANCE OBLIGATION OF REGULATION BEST INTEREST BETWEEN JUNE 30, 2020 AND JUNE 30, 2022, IN VIOLATION OF RULE 15L-1(A)(1) UNDER THE SECURITIES EXCHANGE ACT OF 1934.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO PAY RESTITUTION TO AFFECTED CUSTOMERS TOTALING $1,486,380, PLUS INTEREST. THE FIRM WILL MAKE THESE PAYMENTS IN ACCORDANCE WITH TERMS OF THE AWC. FINRA ALSO RECOGNIZED THE FIRM'S EXTRAORDINARY COOPERATION IN CONNECTION WITH THE MATTER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINANCIAL INDUSTRY REGULATORY AUTHORITY 2. Principal Sanction: Restitution Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 07/01/2024 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2020067795501 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA) FOUND THAT MERRILL LYNCH, PIERCE, FENNER & SMITH (THE FIRM), IN CONNECTION WITH BROKERAGE TRANSACTIONS INVOLVING CERTAIN PRODUCTS ELIGIBLE FOR ADVISORY FEE WAIVERS, FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM AND WRITTEN PROCEDURES REASONABLY DESIGNED TO ENSURE THAT ITS REGISTERED REPRESENTATIVES HAD A REASONABLE BASIS TO BELIEVE THEIR RECOMMENDATIONS WERE SUITABLE OR IN EACH CUSTOMER'S BEST INTEREST BETWEEN JANUARY 2018 AND JUNE 2022, IN VIOLATION OF FINRA RULES 3110 AND 2010; AND FAILED TO COMPLY WITH THE COMPLIANCE OBLIGATION OF REGULATION BEST INTEREST BETWEEN JUNE 30, 2020 AND JUNE 30, 2022, IN VIOLATION OF RULE 15L-1(A)(1) UNDER THE SECURITIES EXCHANGE ACT OF 1934. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 07/01/2024 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO PAY RESTITUTION TO AFFECTED CUSTOMERS TOTALING $1,486,380, PLUS INTEREST. THE FIRM WILL MAKE THESE PAYMENTS IN ACCORDANCE WITH TERMS OF THE AWC. FINRA ALSO RECOGNIZED THE FIRM'S EXTRAORDINARY COOPERATION IN CONNECTION WITH THE MATTER. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO PAY RESTITUTION TO AFFECTED CUSTOMERS TOTALING $1,486,380, PLUS INTEREST. THE FIRM WILL MAKE THESE PAYMENTS IN ACCORDANCE WITH TERMS OF THE AWC. FINRA ALSO RECOGNIZED THE FIRM'S EXTRAORDINARY COOPERATION IN CONNECTION WITH THE MATTER.
regulatory · block 58BOFA SECURITIES, INC.PDF pages 643–645
- Advisory affiliate name — filed text
- BOFA SECURITIES, INC.
- Regulator name — filed text
- CBOE BYX EXCHANGE, INC.
- Monetary/Fine Amount — filed text
- $ 333,000.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THAT VIOLATIONS OF EXCHANGE RULES WERE COMMITTED, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $333,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE LETTER OF CONSENT. THE LETTER OF CONSENT WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, THE NASDAQ STOCK MARKET LLC, NYSE ARCA, INC., CBOE EDGA EXCHANGE, INC., CBOE BZX EXCHANGE, INC., CBOE EDGX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC.
Other filed details
Description of allegations — filed text
CBOE BYX EXCHANGE, INC. (BYX) ALLEGED THAT BOFA SECURITIES, INC. (BOFAS), FROM SEPTEMBER 2018 TO PRESENT, AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS), FROM DECEMBER 2015 TO PRESENT, FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDING WRITTEN SUPERVISORY PROCEDURES, REASONABLY DESIGNED TO DETECT AND PREVENT POTENTIALLY MANIPULATIVE TRADING, IN VIOLATION OF BYX RULE 5.1.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THAT VIOLATIONS OF EXCHANGE RULES WERE COMMITTED, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $333,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE LETTER OF CONSENT. THE LETTER OF CONSENT WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, THE NASDAQ STOCK MARKET LLC, NYSE ARCA, INC., CBOE EDGA EXCHANGE, INC., CBOE BZX EXCHANGE, INC., CBOE EDGX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 283942 This advisory affiliate is a Firm an Individual Registered: Yes No Name: BOFA SECURITIES, INC. (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) CBOE BYX EXCHANGE, INC. 2. Principal Sanction: Censure Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 09/03/2024 Exact Explanation If not exact, provide explanation: DATE PUBLISHED 4. Docket/Case Number: NO. 20170550870-04 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): CBOE BYX EXCHANGE, INC. (BYX) ALLEGED THAT BOFA SECURITIES, INC. (BOFAS), FROM SEPTEMBER 2018 TO PRESENT, AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS), FROM DECEMBER 2015 TO PRESENT, FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDING WRITTEN SUPERVISORY PROCEDURES, REASONABLY DESIGNED TO DETECT AND PREVENT POTENTIALLY MANIPULATIVE TRADING, IN VIOLATION OF BYX RULE 5.1. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Consent 11. Resolution Date (MM/DD/YYYY): 09/03/2024 Exact Explanation If not exact, provide explanation: DATE PUBLISHED 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 333,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THAT VIOLATIONS OF EXCHANGE RULES WERE COMMITTED, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $333,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE LETTER OF CONSENT. THE LETTER OF CONSENT WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, THE NASDAQ STOCK MARKET LLC, NYSE ARCA, INC., CBOE EDGA EXCHANGE, INC., CBOE BZX EXCHANGE, INC., CBOE EDGX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THAT VIOLATIONS OF EXCHANGE RULES WERE COMMITTED, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $333,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE LETTER OF CONSENT. THE LETTER OF CONSENT WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, THE NASDAQ STOCK MARKET LLC, NYSE ARCA, INC., CBOE EDGA EXCHANGE, INC., CBOE BZX EXCHANGE, INC., CBOE EDGX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC.
regulatory · block 59BOFA SECURITIES, INC.PDF pages 645–647
- Advisory affiliate name — filed text
- BOFA SECURITIES, INC.
- Regulator name — filed text
- NYSE ARCA, INC.
- Monetary/Fine Amount — filed text
- $ 333,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $333,000, AND CERTAIN UNDERTAKINGS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. THE AWC WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, THE NASDAQ STOCK MARKET LLC, CBOE EDGA EXCHANGE, INC., CBOE EDGX EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC.
Other filed details
Description of allegations — filed text
NYSE ARCA, INC. (ARCA) ALLEGED THAT BOFA SECURITIES, INC. (BOFAS), FROM JULY 2019 TO PRESENT, AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS), FROM DECEMBER 2015 TO JULY 2019, FAILED TO ESTABLISH, MAINTAIN, AND ENFORCE A SUPERVISORY SYSTEM AND WRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TO DETECT AND PREVENT POTENTIALLY MANIPULATIVE TRADING BY CUSTOMERS OF BOFAS AND MLPFS, IN VIOLATION OF NYSE ARCA RULES 11.18(B) AND (C) (SUPERVISION).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $333,000, AND CERTAIN UNDERTAKINGS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. THE AWC WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, THE NASDAQ STOCK MARKET LLC, CBOE EDGA EXCHANGE, INC., CBOE EDGX EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 283942 This advisory affiliate is a Firm an Individual Registered: Yes No Name: BOFA SECURITIES, INC. (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) NYSE ARCA, INC. 2. Principal Sanction: Censure Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 08/28/2024 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: NO. 2017055087008 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): NYSE ARCA, INC. (ARCA) ALLEGED THAT BOFA SECURITIES, INC. (BOFAS), FROM JULY 2019 TO PRESENT, AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS), FROM DECEMBER 2015 TO JULY 2019, FAILED TO ESTABLISH, MAINTAIN, AND ENFORCE A SUPERVISORY SYSTEM AND WRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TO DETECT AND PREVENT POTENTIALLY MANIPULATIVE TRADING BY CUSTOMERS OF BOFAS AND MLPFS, IN VIOLATION OF NYSE ARCA RULES 11.18(B) AND (C) (SUPERVISION). 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 08/28/2024 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 333,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $333,000, AND CERTAIN UNDERTAKINGS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. THE AWC WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, THE NASDAQ STOCK MARKET LLC, CBOE EDGA EXCHANGE, INC., CBOE EDGX EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $333,000, AND CERTAIN UNDERTAKINGS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. THE AWC WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, THE NASDAQ STOCK MARKET LLC, CBOE EDGA EXCHANGE, INC., CBOE EDGX EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC.
regulatory · block 60BOFA SECURITIES, INC.PDF pages 647–649
- Advisory affiliate name — filed text
- BOFA SECURITIES, INC.
- Regulator name — filed text
- THE NASDAQ STOCK MARKET LLC
- Monetary/Fine Amount — filed text
- $ 333,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $333,000, AND CERTAIN UNDERTAKINGS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. THE AWC WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, NYSE ARCA, INC., CBOE EDGA EXCHANGE, INC., CBOE EDGX EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC.
Other filed details
Description of allegations — filed text
THE NASDAQ STOCK MARKET LLC (NASDAQ) ALLEGED THAT BOFA SECURITIES, INC. (BOFAS), FROM 2019 TO PRESENT, AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS), FROM DECEMBER 2015 THROUGH PRESENT, FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM AND WRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TO DETECT AND PREVENT POTENTIALLY MANIPULATIVE TRADING BY CUSTOMERS OF BOFAS AND MLPFS, IN VIOLATION OF NASDAQ RULES GENERAL 9, SECTION 20(A) AND ITS PREDECESSOR, NASDAQ RULE 3010, AND NASDAQ RULE GENERAL 9, SECTION 1(A) AND ITS PREDECESSOR, NASDAQ RULE 2010A..
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $333,000, AND CERTAIN UNDERTAKINGS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. THE AWC WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, NYSE ARCA, INC., CBOE EDGA EXCHANGE, INC., CBOE EDGX EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 283942 This advisory affiliate is a Firm an Individual Registered: Yes No Name: BOFA SECURITIES, INC. (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) THE NASDAQ STOCK MARKET LLC 2. Principal Sanction: Censure Other Sanctions: UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 08/28/2024 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: NO. 2017055087002 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE NASDAQ STOCK MARKET LLC (NASDAQ) ALLEGED THAT BOFA SECURITIES, INC. (BOFAS), FROM 2019 TO PRESENT, AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS), FROM DECEMBER 2015 THROUGH PRESENT, FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM AND WRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TO DETECT AND PREVENT POTENTIALLY MANIPULATIVE TRADING BY CUSTOMERS OF BOFAS AND MLPFS, IN VIOLATION OF NASDAQ RULES GENERAL 9, SECTION 20(A) AND ITS PREDECESSOR, NASDAQ RULE 3010, AND NASDAQ RULE GENERAL 9, SECTION 1(A) AND ITS PREDECESSOR, NASDAQ RULE 2010A.. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 08/28/2024 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 333,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $333,000, AND CERTAIN UNDERTAKINGS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. THE AWC WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, NYSE ARCA, INC., CBOE EDGA EXCHANGE, INC., CBOE EDGX EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $333,000, AND CERTAIN UNDERTAKINGS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. THE AWC WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, NYSE ARCA, INC., CBOE EDGA EXCHANGE, INC., CBOE EDGX EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC.
regulatory · block 61BOFA SECURITIES, INC.PDF pages 649–651
- Advisory affiliate name — filed text
- BOFA SECURITIES, INC.
- Regulator name — filed text
- INVESTORS EXCHANGE LLC
- Monetary/Fine Amount — filed text
- $ 333,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $333,000, AND CERTAIN UNDERTAKINGS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. THE AWC WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH NYSE ARCA, INC., CBOE EDGA EXCHANGE, INC., CBOE EDGX EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND THE NASDAQ STOCK MARKET LLC, AND THE FINANCIAL INDUSTRY REGULATORY AUTHORITY.
Other filed details
Description of allegations — filed text
THE INVESTORS EXCHANGE LLC (IEX) ALLEGED THAT BOFA SECURITIES, INC. (BOFAS), FROM 2019 TO PRESENT, AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS), FROM AUGUST 2016 THROUGH PRESENT, FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM AND WRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TO DETECT AND PREVENT POTENTIALLY MANIPULATIVE TRADING BY CUSTOMERS OF BOFAS AND MLPFS, IN VIOLATION OF IEX RULES 5.110 AND 3.110.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $333,000, AND CERTAIN UNDERTAKINGS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. THE AWC WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH NYSE ARCA, INC., CBOE EDGA EXCHANGE, INC., CBOE EDGX EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND THE NASDAQ STOCK MARKET LLC, AND THE FINANCIAL INDUSTRY REGULATORY AUTHORITY.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 283942 This advisory affiliate is a Firm an Individual Registered: Yes No Name: BOFA SECURITIES, INC. (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) INVESTORS EXCHANGE LLC 2. Principal Sanction: Censure Other Sanctions: UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 08/28/2024 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: NO. 2017055087001 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE INVESTORS EXCHANGE LLC (IEX) ALLEGED THAT BOFA SECURITIES, INC. (BOFAS), FROM 2019 TO PRESENT, AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS), FROM AUGUST 2016 THROUGH PRESENT, FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM AND WRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TO DETECT AND PREVENT POTENTIALLY MANIPULATIVE TRADING BY CUSTOMERS OF BOFAS AND MLPFS, IN VIOLATION OF IEX RULES 5.110 AND 3.110. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 08/28/2024 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 333,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $333,000, AND CERTAIN UNDERTAKINGS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. THE AWC WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH NYSE ARCA, INC., CBOE EDGA EXCHANGE, INC., CBOE EDGX EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND THE NASDAQ STOCK MARKET LLC, AND THE FINANCIAL INDUSTRY REGULATORY AUTHORITY. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $333,000, AND CERTAIN UNDERTAKINGS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. THE AWC WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH NYSE ARCA, INC., CBOE EDGA EXCHANGE, INC., CBOE EDGX EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND THE NASDAQ STOCK MARKET LLC, AND THE FINANCIAL INDUSTRY REGULATORY AUTHORITY.
regulatory · block 62BOFA SECURITIES, INC.PDF pages 651–653
- Advisory affiliate name — filed text
- BOFA SECURITIES, INC.
- Regulator name — filed text
- FINANCIAL INDUSTRY REGULATORY AUTHORITY
- Monetary/Fine Amount — filed text
- $ 669,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $669,000, AND CERTAIN UNDERTAKINGS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. THE AWC WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE NASDAQ STOCK EXCHANGE LLC, NYSE ARCA, INC., CBOE EDGA EXCHANGE, INC., CBOE EDGX EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC.
Other filed details
Description of allegations — filed text
THE FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA) ALLEGED THAT BOFA SECURITIES, INC. (BOFAS), FROM 2019 TO PRESENT, AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS), FROM DECEMBER 2015 THROUGH PRESENT, FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM AND WRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TO DETECT AND PREVENT POTENTIALLY MANIPULATIVE TRADING BY CUSTOMERS OF BOFAS AND MLPFS, IN VIOLATION OF FINRA RULES 3110(A), 3110(B), AND 2010.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $669,000, AND CERTAIN UNDERTAKINGS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. THE AWC WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE NASDAQ STOCK EXCHANGE LLC, NYSE ARCA, INC., CBOE EDGA EXCHANGE, INC., CBOE EDGX EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 283942 This advisory affiliate is a Firm an Individual Registered: Yes No Name: BOFA SECURITIES, INC. (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINANCIAL INDUSTRY REGULATORY AUTHORITY 2. Principal Sanction: Censure Other Sanctions: UNDERTAKING 3. Date Initiated (MM/DD/YYYY): 08/28/2024 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: NO. 2017055087003 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA) ALLEGED THAT BOFA SECURITIES, INC. (BOFAS), FROM 2019 TO PRESENT, AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS), FROM DECEMBER 2015 THROUGH PRESENT, FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM AND WRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TO DETECT AND PREVENT POTENTIALLY MANIPULATIVE TRADING BY CUSTOMERS OF BOFAS AND MLPFS, IN VIOLATION OF FINRA RULES 3110(A), 3110(B), AND 2010. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 08/28/2024 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 669,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKING Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $669,000, AND CERTAIN UNDERTAKINGS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. THE AWC WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE NASDAQ STOCK EXCHANGE LLC, NYSE ARCA, INC., CBOE EDGA EXCHANGE, INC., CBOE EDGX EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $669,000, AND CERTAIN UNDERTAKINGS. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. THE AWC WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE NASDAQ STOCK EXCHANGE LLC, NYSE ARCA, INC., CBOE EDGA EXCHANGE, INC., CBOE EDGX EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC.
regulatory · block 63BOFA SECURITIES, INC.PDF pages 653–655
- Advisory affiliate name — filed text
- BOFA SECURITIES, INC.
- Regulator name — filed text
- CBOE EDGA EXCHANGE, INC.
- Monetary/Fine Amount — filed text
- $ 333,000.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THAT VIOLATIONS OF EXCHANGE RULES WERE COMMITTED, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $333,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE LETTER OF CONSENT. THE LETTER OF CONSENT WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, THE NASDAQ STOCK MARKET LLC, NYSE ARCA, INC., CBOE EDGX EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC.
Other filed details
Description of allegations — filed text
CBOE EDGA EXCHANGE, INC. (EDGA) ALLEGED THAT BOFA SECURITIES, INC. (BOFAS), FROM SEPTEMBER 2018 TO PRESENT, AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS), FROM DECEMBER 2015 TO JUNE 2019, FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDING WRITTEN SUPERVISORY PROCEDURES, REASONABLY DESIGNED TO DETECT AND PREVENT POTENTIALLY MANIPULATIVE TRADING, IN VIOLATION OF EDGA RULE 5.1.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THAT VIOLATIONS OF EXCHANGE RULES WERE COMMITTED, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $333,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE LETTER OF CONSENT. THE LETTER OF CONSENT WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, THE NASDAQ STOCK MARKET LLC, NYSE ARCA, INC., CBOE EDGX EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 283942 This advisory affiliate is a Firm an Individual Registered: Yes No Name: BOFA SECURITIES, INC. (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) CBOE EDGA EXCHANGE, INC. 2. Principal Sanction: Censure Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 09/03/2024 Exact Explanation If not exact, provide explanation: DATE PUBLISHED 4. Docket/Case Number: NO. 20170550870-06 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): CBOE EDGA EXCHANGE, INC. (EDGA) ALLEGED THAT BOFA SECURITIES, INC. (BOFAS), FROM SEPTEMBER 2018 TO PRESENT, AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS), FROM DECEMBER 2015 TO JUNE 2019, FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDING WRITTEN SUPERVISORY PROCEDURES, REASONABLY DESIGNED TO DETECT AND PREVENT POTENTIALLY MANIPULATIVE TRADING, IN VIOLATION OF EDGA RULE 5.1. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Consent 11. Resolution Date (MM/DD/YYYY): 09/03/2024 Exact Explanation If not exact, provide explanation: DATE PUBLISHED 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 333,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THAT VIOLATIONS OF EXCHANGE RULES WERE COMMITTED, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $333,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE LETTER OF CONSENT. THE LETTER OF CONSENT WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, THE NASDAQ STOCK MARKET LLC, NYSE ARCA, INC., CBOE EDGX EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THAT VIOLATIONS OF EXCHANGE RULES WERE COMMITTED, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $333,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE LETTER OF CONSENT. THE LETTER OF CONSENT WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, THE NASDAQ STOCK MARKET LLC, NYSE ARCA, INC., CBOE EDGX EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC.
regulatory · block 64BOFA SECURITIES, INC.PDF pages 655–657
- Advisory affiliate name — filed text
- BOFA SECURITIES, INC.
- Regulator name — filed text
- CBOE EDGX EXCHANGE, INC.
- Monetary/Fine Amount — filed text
- $ 333,000.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THAT VIOLATIONS OF EXCHANGE RULES WERE COMMITTED, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $333,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE LETTER OF CONSENT. THE LETTER OF CONSENT WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, THE NASDAQ STOCK MARKET LLC, NYSE ARCA, INC., CBOE EDGA EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC.
Other filed details
Description of allegations — filed text
CBOE EDGX EXCHANGE, INC. (EDGX) ALLEGED THAT BOFA SECURITIES, INC. (BOFAS), FROM SEPTEMBER 2018 TO PRESENT, AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS), FROM DECEMBER 2015 TO JUNE 2019, FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDING WRITTEN SUPERVISORY PROCEDURES, REASONABLY DESIGNED TO DETECT AND PREVENT POTENTIALLY MANIPULATIVE TRADING, IN VIOLATION OF EDGX RULE 5.1.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THAT VIOLATIONS OF EXCHANGE RULES WERE COMMITTED, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $333,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE LETTER OF CONSENT. THE LETTER OF CONSENT WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, THE NASDAQ STOCK MARKET LLC, NYSE ARCA, INC., CBOE EDGA EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 283942 This advisory affiliate is a Firm an Individual Registered: Yes No Name: BOFA SECURITIES, INC. (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) CBOE EDGX EXCHANGE, INC. 2. Principal Sanction: Censure Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 09/03/2024 Exact Explanation If not exact, provide explanation: DATE PUBLISHED 4. Docket/Case Number: NO. 20170550870-07 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): CBOE EDGX EXCHANGE, INC. (EDGX) ALLEGED THAT BOFA SECURITIES, INC. (BOFAS), FROM SEPTEMBER 2018 TO PRESENT, AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS), FROM DECEMBER 2015 TO JUNE 2019, FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDING WRITTEN SUPERVISORY PROCEDURES, REASONABLY DESIGNED TO DETECT AND PREVENT POTENTIALLY MANIPULATIVE TRADING, IN VIOLATION OF EDGX RULE 5.1. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Consent 11. Resolution Date (MM/DD/YYYY): 09/03/2024 Exact Explanation If not exact, provide explanation: DATE PUBLISHED 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 333,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THAT VIOLATIONS OF EXCHANGE RULES WERE COMMITTED, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $333,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE LETTER OF CONSENT. THE LETTER OF CONSENT WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, THE NASDAQ STOCK MARKET LLC, NYSE ARCA, INC., CBOE EDGA EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THAT VIOLATIONS OF EXCHANGE RULES WERE COMMITTED, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $333,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE LETTER OF CONSENT. THE LETTER OF CONSENT WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, THE NASDAQ STOCK MARKET LLC, NYSE ARCA, INC., CBOE EDGA EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE BZX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC.
regulatory · block 65BOFA SECURITIES, INC.PDF pages 657–659
- Advisory affiliate name — filed text
- BOFA SECURITIES, INC.
- Regulator name — filed text
- CBOE BZX EXCHANGE, INC.
- Monetary/Fine Amount — filed text
- $ 333,000.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THAT VIOLATIONS OF EXCHANGE RULES WERE COMMITTED, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $333,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE LETTER OF CONSENT. THE LETTER OF CONSENT WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, THE NASDAQ STOCK MARKET LLC, NYSE ARCA, INC., CBOE EDGA EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE EDGX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC.
Other filed details
Description of allegations — filed text
CBOE BZX EXCHANGE, INC. (BZX) ALLEGED THAT BOFA SECURITIES, INC. (BOFAS), FROM SEPTEMBER 2018 TO PRESENT, AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS), FROM DECEMBER 2015 TO PRESENT, FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDING WRITTEN SUPERVISORY PROCEDURES, REASONABLY DESIGNED TO DETECT AND PREVENT POTENTIALLY MANIPULATIVE TRADING, IN VIOLATION OF BZX RULE 5.1.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 283942 This advisory affiliate is a Firm an Individual Registered: Yes No Name: BOFA SECURITIES, INC. (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) CBOE BZX EXCHANGE, INC. 2. Principal Sanction: Censure Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 09/03/2024 Exact Explanation If not exact, provide explanation: DATE PUBLISHED 4. Docket/Case Number: NO. 2017055087005 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): CBOE BZX EXCHANGE, INC. (BZX) ALLEGED THAT BOFA SECURITIES, INC. (BOFAS), FROM SEPTEMBER 2018 TO PRESENT, AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPFS), FROM DECEMBER 2015 TO PRESENT, FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDING WRITTEN SUPERVISORY PROCEDURES, REASONABLY DESIGNED TO DETECT AND PREVENT POTENTIALLY MANIPULATIVE TRADING, IN VIOLATION OF BZX RULE 5.1. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Consent 11. Resolution Date (MM/DD/YYYY): 09/03/2024 Exact Explanation If not exact, provide explanation: DATE PUBLISHED 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 333,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of g g y p p p g y y p y p penalty was waived: WITHOUT ADMITTING OR DENYING THAT VIOLATIONS OF EXCHANGE RULES WERE COMMITTED, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $333,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE LETTER OF CONSENT. THE LETTER OF CONSENT WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, THE NASDAQ STOCK MARKET LLC, NYSE ARCA, INC., CBOE EDGA EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE EDGX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THAT VIOLATIONS OF EXCHANGE RULES WERE COMMITTED, BOFAS AND MLPFS CONSENTED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $333,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE LETTER OF CONSENT. THE LETTER OF CONSENT WAS PART OF A TOTAL SETTLEMENT BOFAS AND MLPFS REACHED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, THE NASDAQ STOCK MARKET LLC, NYSE ARCA, INC., CBOE EDGA EXCHANGE, INC., CBOE BYX EXCHANGE, INC., CBOE EDGX EXCHANGE, INC., AND INVESTORS EXCHANGE LLC.
regulatory · block 66PDF pages 659–661
- Regulator name — filed text
- U.S. SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 1,000,000.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AGREED TO THE IMPOSITION OF A CENSURE, CEASE AND DESIST ORDER, AN ORDER TO PAY DISGORGEMENT AND PREJUDGMENT INTEREST TOTALING $2,800,000, AND A CIVIL MONETARY PENALTY IN THE AMOUNT OF $1,000,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
Other filed details
Description of allegations — filed text
THE SECURITIES AND EXCHANGE COMMISSION (SEC) ALLEGED THAT MERRILL LYNCH, PIERCE, FENNER & SMITH (MLPF&S), FROM MARCH 2016 TO APRIL 2018, FAILED TO ADEQUATELY NOTIFY CERTAIN CLIENTS WITH WHICH IT HAD A FIDUCIARY RELATIONSHIP OF THE CLIENTS' OVER-EXPOSURE TO THE HARVEST VOLATILITY MANAGEMENT LLC'S COLLATERAL YIELD ENHANCEMENT STRATEGY, AN OPTIONS OVERLAY STRATEGY FOR WHICH HARVEST WAS THE THIRD PARTY PRIVATE INVESTMENT MANAGER AND MLPFS THE CUSTODIAN. THE ORDER FOUND THAT IN DOING SO, MLPFS WILLFULLY BREACHED ITS FIDUCIARY DUTY UNDER SECTIONS 206(2) AND 206(4) OF THE ADVISERS ACT AND RULE 206(4)-7 THEREUNDER TO SUCH FIDUCIARY CLIENTS.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AGREED TO THE IMPOSITION OF A CENSURE, CEASE AND DESIST ORDER, AN ORDER TO PAY DISGORGEMENT AND PREJUDGMENT INTEREST TOTALING $2,800,000, AND A CIVIL MONETARY PENALTY IN THE AMOUNT OF $1,000,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) U.S. SECURITIES AND EXCHANGE COMMISSION 2. Principal Sanction: Censure Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 09/25/2024 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: FILE NO. 3-22173 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Options Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE SECURITIES AND EXCHANGE COMMISSION (SEC) ALLEGED THAT MERRILL LYNCH, PIERCE, FENNER & SMITH (MLPF&S), FROM MARCH 2016 TO APRIL 2018, FAILED TO ADEQUATELY NOTIFY CERTAIN CLIENTS WITH WHICH IT HAD A FIDUCIARY RELATIONSHIP OF THE CLIENTS' OVER-EXPOSURE TO THE HARVEST VOLATILITY MANAGEMENT LLC'S COLLATERAL YIELD ENHANCEMENT STRATEGY, AN OPTIONS OVERLAY STRATEGY FOR WHICH HARVEST WAS THE THIRD PARTY PRIVATE INVESTMENT MANAGER AND MLPFS THE CUSTODIAN. THE ORDER FOUND THAT IN DOING SO, MLPFS WILLFULLY BREACHED ITS FIDUCIARY DUTY UNDER SECTIONS 206(2) AND 206(4) OF THE ADVISERS ACT AND RULE 206(4)-7 THEREUNDER TO SUCH FIDUCIARY CLIENTS. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Order 11. Resolution Date (MM/DD/YYYY): 09/25/2024 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 1,000,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: PREJUDGMENT INTEREST Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AGREED TO THE IMPOSITION OF A CENSURE, CEASE AND DESIST ORDER, AN ORDER TO PAY DISGORGEMENT AND PREJUDGMENT INTEREST TOTALING $2,800,000, AND A CIVIL MONETARY PENALTY IN THE AMOUNT OF $1,000,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AGREED TO THE IMPOSITION OF A CENSURE, CEASE AND DESIST ORDER, AN ORDER TO PAY DISGORGEMENT AND PREJUDGMENT INTEREST TOTALING $2,800,000, AND A CIVIL MONETARY PENALTY IN THE AMOUNT OF $1,000,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
regulatory · block 67PDF pages 661–662
- Regulator name — filed text
- FINANCIAL INDUSTRY REGULATORY AUTHORITY
- Monetary/Fine Amount — filed text
- $ 215,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPFS AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $215,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
Other filed details
Description of allegations — filed text
THE FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA) ALLEGED THAT BETWEEN JULY 2022 AND DECEMBER 2022, MERRILL LYNCH, PIERCE, FENNER & SMITH (MLPFS) AND BOFA SECURITIES, INC. (BOFAS) FAILED TO TIMELY FILE AMENDMENTS FOR THEIR REGISTERED REPRESENTATIVES' UNIFORM APPLICATIONS FOR SECURITIES INDUSTRY REGISTRATION (FORMS U4) TO UPDATE THE REPRESENTATIVES' OUTSIDE BUSINESS ACTIVITIES AND TO REFLECT CHANGES IN THE REPRESENTATIVES' BUSINESS ADDRESSES, IN VIOLATION OF ARTICLE V, SECTION 2(C) OF FINRA'S BY-LAWS AND FINRA RULES 1122 AND 2010, AND FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM REASONABLY DESIGNED TO ENSURE THE TIMELY FILING OF FORM U4 AMENDMENTS, IN VIOLATION OF FINRA RULES 3110 AND 2010.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPFS AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $215,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINANCIAL INDUSTRY REGULATORY AUTHORITY 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CENSURE 3. Date Initiated (MM/DD/YYYY): 09/23/2024 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2023078116101 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA) ALLEGED THAT BETWEEN JULY 2022 AND DECEMBER 2022, MERRILL LYNCH, PIERCE, FENNER & SMITH (MLPFS) AND BOFA SECURITIES, INC. (BOFAS) FAILED TO TIMELY FILE AMENDMENTS FOR THEIR REGISTERED REPRESENTATIVES' UNIFORM APPLICATIONS FOR SECURITIES INDUSTRY REGISTRATION (FORMS U4) TO UPDATE THE REPRESENTATIVES' OUTSIDE BUSINESS ACTIVITIES AND TO REFLECT CHANGES IN THE REPRESENTATIVES' BUSINESS ADDRESSES, IN VIOLATION OF ARTICLE V, SECTION 2(C) OF FINRA'S BY-LAWS AND FINRA RULES 1122 AND 2010, AND FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM REASONABLY DESIGNED TO ENSURE THE TIMELY FILING OF FORM U4 AMENDMENTS, IN VIOLATION OF FINRA RULES 3110 AND 2010. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 09/23/2024 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 215,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPFS AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $215,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPFS AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $215,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
regulatory · block 68MERRILL LYNCH COMMODITIES, INC.PDF pages 662–664
- Advisory affiliate name — filed text
- MERRILL LYNCH COMMODITIES, INC.
- Regulator name — filed text
- COMMODITY FUTURES TRADING COMMISSION
- Monetary/Fine Amount — filed text
- $ 1,500,000.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
MCLI ADMITTED TO CERTAIN FACTS IN THE SETTLEMENT ORDER, ACKNOWLEDGED ITS CONDUCT VIOLATED CERTAIN PROVISIONS OF THE CEA AND CFTC REGULATIONS AND AGREED TO THE FOLLOWING SANCTIONS: (A) TO CEASE AND DESIST FROM VIOLATING SECTIONS 4A(B)(2) AND (E) AND 4S(H) (1)(B) AND (C) OF THE CEA AND CFTC REGULATIONS 23.601(A), 23.602(A), AND 150.2, (B) TO PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $1,500,000, AND (C) TO COMPLY WITH CERTAIN CONDITIONS AND UNDERTAKINGS.
Other filed details
Description of allegations — filed text
THE COMMODITY FUTURES TRADING COMMISSION ("CFTC") ENTERED INTO A SETTLEMENT ORDER ("ORDER") WITH MERRILL LYNCH COMMODITIES, INC. ("MLCI") TO SETTLE AN ADMINISTRATIVE ACTION THAT FOUND MLCI (A) HELD POSITIONS IN CERTAIN FIXED PRICE FUTURES CONTRACTS THAT VIOLATED FEDERAL SPOT-MONTH POSITION LIMITS AND DID NOT OTHERWISE MEET THE REQUIREMENTS FOR AN EXEMPTION FROM THE FEDERAL POSITION LIMITS PURSUANT TO CFTC REGULATIONS, IN VIOLATION OF SECTION 4A(B)(2) OF THE COMMODITY EXCHANGE ACT ("CEA") AND CFTC REGULATION 150.2; (B) EXCEEDED THE ICE FUTURES U.S.-SET SPOT-MONTH POSITION LIMIT IN CERTAIN FIXED PRICE FUTURES CONTRACTS AND DID NOT COMPLY WITH THE TERMS OF AN EXEMPTION THAT HAD BEEN GRANTED BY ICE FUTURES U.S., IN VIOLATION OF SECTION 4A(E) OF THE CEA; AND (C) DID NOT ESTABLISH AND ENFORCE WRITTEN POLICIES AND PROCEDURES REASONABLY DESIGNED TO MONITOR FOR AND PREVENT VIOLATIONS OF APPLICABLE FEDERAL, DESIGNATED CONTRACT MARKET, OR SWAP EXECUTION FACILITY POSITION LIMITS AND TO MONITOR FOR AND PREVENT IMPROPER RELIANCE UPON ANY EXEMPTION OR EXCLUSIONS FROM SUCH POSITION LIMITS, AND THEREBY DID NOT DILIGENTLY SUPERVISE ITS EMPLOYEES, IN VIOLATION OF SECTION 4S(H)(1)(B) AND (C) OF THE CEA AND CFTC REGULATIONS 23.601(A) AND 23.602(A).
Sanction detail — filed text
MCLI ADMITTED TO CERTAIN FACTS IN THE SETTLEMENT ORDER, ACKNOWLEDGED ITS CONDUCT VIOLATED CERTAIN PROVISIONS OF THE CEA AND CFTC REGULATIONS AND AGREED TO THE FOLLOWING SANCTIONS: (A) TO CEASE AND DESIST FROM VIOLATING SECTIONS 4A(B)(2) AND (E) AND 4S(H)(1)(B) AND (C) OF THE CEA AND CFTC REGULATIONS 23.601(A), 23.602(A), AND 150.2, (B) TO PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $1,500,000, AND (C) TO COMPLY WITH CERTAIN CONDITIONS AND UNDERTAKINGS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
MERRILL LYNCH
COMMODITIES, INC.
(For individuals, Last, First,
Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
COMMODITY FUTURES TRADING COMMISSION
2.
Principal Sanction:
Cease and Desist
Other Sanctions:
3.
Date Initiated (MM/DD/YYYY):
09/25/2024
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
CFTC DOCKET NO. 24-31
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Futures - Commodity
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE COMMODITY FUTURES TRADING COMMISSION ("CFTC") ENTERED INTO A SETTLEMENT ORDER ("ORDER") WITH MERRILL LYNCH COMMODITIES, INC.
("MLCI") TO SETTLE AN ADMINISTRATIVE ACTION THAT FOUND MLCI (A) HELD POSITIONS IN CERTAIN FIXED PRICE FUTURES CONTRACTS THAT
VIOLATED FEDERAL SPOT-MONTH POSITION LIMITS AND DID NOT OTHERWISE MEET THE REQUIREMENTS FOR AN EXEMPTION FROM THE FEDERAL
POSITION LIMITS PURSUANT TO CFTC REGULATIONS, IN VIOLATION OF SECTION 4A(B)(2) OF THE COMMODITY EXCHANGE ACT ("CEA") AND CFTC
REGULATION 150.2; (B) EXCEEDED THE ICE FUTURES U.S.-SET SPOT-MONTH POSITION LIMIT IN CERTAIN FIXED PRICE FUTURES CONTRACTS AND DID
NOT COMPLY WITH THE TERMS OF AN EXEMPTION THAT HAD BEEN GRANTED BY ICE FUTURES U.S., IN VIOLATION OF SECTION 4A(E) OF THE CEA; AND
(C) DID NOT ESTABLISH AND ENFORCE WRITTEN POLICIES AND PROCEDURES REASONABLY DESIGNED TO MONITOR FOR AND PREVENT VIOLATIONS OF
APPLICABLE FEDERAL, DESIGNATED CONTRACT MARKET, OR SWAP EXECUTION FACILITY POSITION LIMITS AND TO MONITOR FOR AND PREVENT
IMPROPER RELIANCE UPON ANY EXEMPTION OR EXCLUSIONS FROM SUCH POSITION LIMITS, AND THEREBY DID NOT DILIGENTLY SUPERVISE ITS
EMPLOYEES, IN VIOLATION OF SECTION 4S(H)(1)(B) AND (C) OF THE CEA AND CFTC REGULATIONS 23.601(A) AND 23.602(A).
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Order
11. Resolution Date (MM/DD/YYYY):
09/25/2024
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 1,500,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
UNDERTAKINGS
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
MCLI ADMITTED TO CERTAIN FACTS IN THE SETTLEMENT ORDER, ACKNOWLEDGED ITS CONDUCT VIOLATED CERTAIN PROVISIONS OF THE CEA
AND CFTC REGULATIONS AND AGREED TO THE FOLLOWING SANCTIONS: (A) TO CEASE AND DESIST FROM VIOLATING SECTIONS 4A(B)(2) AND (E)
AND 4S(H)(1)(B) AND (C) OF THE CEA AND CFTC REGULATIONS 23.601(A), 23.602(A), AND 150.2, (B) TO PAY A CIVIL MONETARY PENALTY IN THE
AMOUNT OF $1,500,000, AND (C) TO COMPLY WITH CERTAIN CONDITIONS AND UNDERTAKINGS.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
MCLI ADMITTED TO CERTAIN FACTS IN THE SETTLEMENT ORDER, ACKNOWLEDGED ITS CONDUCT VIOLATED CERTAIN PROVISIONS OF THE CEA AND
CFTC REGULATIONS AND AGREED TO THE FOLLOWING SANCTIONS: (A) TO CEASE AND DESIST FROM VIOLATING SECTIONS 4A(B)(2) AND (E) AND 4S(H)
(1)(B) AND (C) OF THE CEA AND CFTC REGULATIONS 23.601(A), 23.602(A), AND 150.2, (B) TO PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF
$1,500,000, AND (C) TO COMPLY WITH CERTAIN CONDITIONS AND UNDERTAKINGS.regulatory · block 69PDF pages 664–666
- Regulator name — filed text
- FINANCIAL INDUSTRY REGULATORY AUTHORITY
- Monetary/Fine Amount — filed text
- $ 2,000,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $2,000,000 ($50,000 OF WHICH PERTAINS TO THE VIOLATIONS OF MSRB RULES G-14 AND G-27). THE FINE WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
Other filed details
Description of allegations — filed text
THE FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA) FOUND THAT MERRILL LYNCH, PIERCE, FENNER & SMITH (THE FIRM) FAILED TO ACCURATELY REPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE (TRACE) CERTAIN CUSTOMER TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES FROM MARCH 2010 TO SEPTEMBER 2020, IN VIOLATION OF FINRA RULES 6730(A), (C), AND (D) AND 2010, OVER-REPORTED CERTAIN MUNICIPAL SECURITIES TRANSACTIONS FOR RETAIL CUSTOMERS TO THE REAL-TIME TRANSACTION REPORTING SYSTEM (RTRS) FROM SEPTEMBER 2017 TO FEBRUARY 2019, IN VIOLATION OF MUNICIPAL SECURITIES RULEMAKING BOARD (MSRB) RULE G-14(B), AND FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH FINRA RULE 6730 AND RTRS REPORTING, IN VIOLATION OF NASD RULE 3010, FINRA RULES 3110(A) AND (B) AND 2010, AND MSRB RULE G-27.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $2,000,000 ($50,000 OF WHICH PERTAINS TO THE VIOLATIONS OF MSRB RULES G-14 AND G-27). THE FINE WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINANCIAL INDUSTRY REGULATORY AUTHORITY 2. Principal Sanction: Censure Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 09/30/2024 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2019062983001 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: VARIOUS SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA) FOUND THAT MERRILL LYNCH, PIERCE, FENNER & SMITH (THE FIRM) FAILED TO ACCURATELY REPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE (TRACE) CERTAIN CUSTOMER TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES FROM MARCH 2010 TO SEPTEMBER 2020, IN VIOLATION OF FINRA RULES 6730(A), (C), AND (D) AND 2010, OVER-REPORTED CERTAIN MUNICIPAL SECURITIES TRANSACTIONS FOR RETAIL CUSTOMERS TO THE REAL-TIME TRANSACTION REPORTING SYSTEM (RTRS) FROM SEPTEMBER 2017 TO FEBRUARY 2019, IN VIOLATION OF MUNICIPAL SECURITIES RULEMAKING BOARD (MSRB) RULE G-14(B), AND FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH FINRA RULE 6730 AND RTRS REPORTING, IN VIOLATION OF NASD RULE 3010, FINRA RULES 3110(A) AND (B) AND 2010, AND MSRB RULE G-27. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 09/30/2024 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 2,000,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $2,000,000 ($50,000 OF WHICH PERTAINS TO THE VIOLATIONS OF MSRB RULES G-14 AND G-27). THE FINE WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $2,000,000 ($50,000 OF WHICH PERTAINS TO THE VIOLATIONS OF MSRB RULES G-14 AND G-27). THE FINE WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
regulatory · block 70PDF pages 666–668
- Regulator name — filed text
- U.S. SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 25,000,000.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
MLPF&S, WITHOUT ADMITTING OR DENYING THE FINDINGS, CONSENTED TO THE IMPOSITION OF A CEASE-AND-DESIST ORDER, CENSURE, AND PAYMENT OF A CIVIL MONETARY PENALTY IN THE AMOUNT OF $25,000,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
Other filed details
Description of allegations — filed text
THE SECURITIES AND EXCHANGE COMMISSION (SEC) ALLEGED THAT MERRILL LYNCH, PIERCE, FENNER & SMITH (MLPF&S), WILLFULLY VIOLATED SECTION 206(4) OF THE INVESTMENT ADVISERS ACT OF 1940 (ADVISERS ACT) AND RULE 206(4)-7 THEREUNDER. THE ORDER FOUND THAT, FROM JANUARY 2022 THROUGH APRIL 2024, MLPF&S FAILED TO ADOPT AND IMPLEMENT REASONABLY DESIGNED WRITTEN POLICIES AND PROCEDURES (I) TO CONSIDER THE BEST INTERESTS OF CLIENTS WHEN EVALUATING AND SELECTING WHICH CASH SWEEP PROGRAM OPTIONS TO MAKE AVAILABLE, SPECIFICALLY ITS USE OF THE MERRILL LYNCH BANK DEPOSIT PROGRAM AND (II) CONCERNING THE DUTIES OF ITS FINANCIAL ADVISORS IN MANAGING CLIENT CASH IN ADVISORY ACCOUNTS. THE ORDER RECOGNIZED THAT MLPF&S TOOK CERTAIN STEPS DESIGNED TO CONSIDER THE BEST INTERESTS OF ITS CLIENTS IN OPERATING ITS CASH SWEEP PROGRAM AND IN MANAGING CLIENT CASH IN ADVISORY ACCOUNTS DURING THE RELEVANT PERIOD.
Sanction detail — filed text
MLPF&S, WITHOUT ADMITTING OR DENYING THE FINDINGS, CONSENTED TO THE IMPOSITION OF A CEASE-AND-DESIST ORDER, CENSURE, AND PAYMENT OF A CIVIL MONETARY PENALTY IN THE AMOUNT OF $25,000,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) U.S. SECURITIES AND EXCHANGE COMMISSION 2. Principal Sanction: Cease and Desist Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 01/17/2025 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: FILE NO. 3-22433 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: BANK PRODUCT 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE SECURITIES AND EXCHANGE COMMISSION (SEC) ALLEGED THAT MERRILL LYNCH, PIERCE, FENNER & SMITH (MLPF&S), WILLFULLY VIOLATED SECTION 206(4) OF THE INVESTMENT ADVISERS ACT OF 1940 (ADVISERS ACT) AND RULE 206(4)-7 THEREUNDER. THE ORDER FOUND THAT, FROM JANUARY 2022 THROUGH APRIL 2024, MLPF&S FAILED TO ADOPT AND IMPLEMENT REASONABLY DESIGNED WRITTEN POLICIES AND PROCEDURES (I) TO CONSIDER THE BEST INTERESTS OF CLIENTS WHEN EVALUATING AND SELECTING WHICH CASH SWEEP PROGRAM OPTIONS TO MAKE AVAILABLE, SPECIFICALLY ITS USE OF THE MERRILL LYNCH BANK DEPOSIT PROGRAM AND (II) CONCERNING THE DUTIES OF ITS FINANCIAL ADVISORS IN MANAGING CLIENT CASH IN ADVISORY ACCOUNTS. THE ORDER RECOGNIZED THAT MLPF&S TOOK CERTAIN STEPS DESIGNED TO CONSIDER THE BEST INTERESTS OF ITS CLIENTS IN OPERATING ITS CASH SWEEP PROGRAM AND IN MANAGING CLIENT CASH IN ADVISORY ACCOUNTS DURING THE RELEVANT PERIOD. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Order 11. Resolution Date (MM/DD/YYYY): 01/17/2025 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 25,000,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: MLPF&S, WITHOUT ADMITTING OR DENYING THE FINDINGS, CONSENTED TO THE IMPOSITION OF A CEASE-AND-DESIST ORDER, CENSURE, AND PAYMENT OF A CIVIL MONETARY PENALTY IN THE AMOUNT OF $25,000,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). MLPF&S, WITHOUT ADMITTING OR DENYING THE FINDINGS, CONSENTED TO THE IMPOSITION OF A CEASE-AND-DESIST ORDER, CENSURE, AND PAYMENT OF A CIVIL MONETARY PENALTY IN THE AMOUNT OF $25,000,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
regulatory · block 71PDF pages 668–670
- Regulator name — filed text
- FINANCIAL INDUSTRY REGULATORY AUTHORITY
- Monetary/Fine Amount — filed text
- $ 275,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AGREED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $275,000, AND CERTAIN UNDERTAKINGS. THE FINE WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
Other filed details
Description of allegations — filed text
THE FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA) ALLEGED THAT MERRILL LYNCH, PIERCE, FENNER & SMITH (MLPF&S) (1) ACCEPTED MARKET ORDERS FOR THE PURCHASE OF SHARES OF EQUITY NEW ISSUES IN THE SECONDARY MARKET PRIOR TO THE COMMENCEMENT OF TRADING OF SUCH SHARES IN THE SECONDARY MARKET IN VIOLATION OF FINRA RULES 5131(D)(4) AND 2010; AND (2) FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDING WRITTEN PROCEDURES, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH FINRA RULE 5131(D)(4).
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AGREED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $275,000, AND CERTAIN UNDERTAKINGS. THE FINE WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINANCIAL INDUSTRY REGULATORY AUTHORITY 2. Principal Sanction: Censure Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 02/20/2025 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: 2021070593301 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: VARIOUS SECURITIES 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA) ALLEGED THAT MERRILL LYNCH, PIERCE, FENNER & SMITH (MLPF&S) (1) ACCEPTED MARKET ORDERS FOR THE PURCHASE OF SHARES OF EQUITY NEW ISSUES IN THE SECONDARY MARKET PRIOR TO THE COMMENCEMENT OF TRADING OF SUCH SHARES IN THE SECONDARY MARKET IN VIOLATION OF FINRA RULES 5131(D)(4) AND 2010; AND (2) FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDING WRITTEN PROCEDURES, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH FINRA RULE 5131(D)(4). 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 02/20/2025 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 275,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: UNDERTAKINGS Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AGREED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $275,000, AND CERTAIN UNDERTAKINGS. THE FINE WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE AWC. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING OR DENYING THE FINDINGS, MLPF&S AGREED TO THE IMPOSITION OF A CENSURE, A FINE IN THE AMOUNT OF $275,000, AND CERTAIN UNDERTAKINGS. THE FINE WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
regulatory · block 72BANK OF AMERICA, NATIONAL ASSOCIATIONPDF pages 670–672
- Advisory affiliate name — filed text
- BANK OF AMERICA, NATIONAL ASSOCIATION
- Regulator name — filed text
- BANGKO SENTRAL NG PILIPINAS
- Monetary/Fine Amount — filed text
- $ 15,386.00
- How was matter resolved — filed text
- Other
Action status / disposition — filed text
THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP852,673.62(APPROXIMATELY USD15,386) ON BANA. THE PENALTY AMOUNT WAS REDUCED TO ACCOUNT FOR BANA'S PENALTY AMOUNT BEING OVER-ASSESSED IN CONNECTION WITH A PRIOR LETTER. THE PAYMENT WILL BE MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER.
Other filed details
Description of allegations — filed text
THE BANGKO SENTRAL NG PILIPINAS (BSP) APPROVED THE IMPOSITION OF A MONETARY PENALTY ON BANK OF AMERICA, NATIONAL ASSOCIATION (BANA) FOR NON-COMPLIANCE WITH THE MANDATORY CREDIT ALLOCATION FOR AGRICULTURE, FISHERIES AND RURAL DEVELOPMENT (AFRD) FOR THE QUARTERS ENDED 3-31-2023 THROUGH 6-30-2023.
Sanction detail — filed text
THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP852,673.62(APPROXIMATELY USD15,386) ON BANA. THE PENALTY AMOUNT WAS REDUCED TO ACCOUNT FOR BANA'S PENALTY AMOUNT BEING OVER-ASSESSED IN CONNECTION WITH A PRIOR LETTER. THE PAYMENT WILL BE MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: This advisory affiliate is a Firm an Individual Registered: Yes No Name: BANK OF AMERICA, NATIONAL ASSOCIATION (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) BANGKO SENTRAL NG PILIPINAS 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: 3. Date Initiated (MM/DD/YYYY): 05/07/2025 Exact Explanation If not exact, provide explanation: DATE OF RECEIPT 4. Docket/Case Number: REF. NO DSA-2024-06-0183B-DSA-L-BA-FBL 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: Other Other Product Types: BANK LOANS 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE BANGKO SENTRAL NG PILIPINAS (BSP) APPROVED THE IMPOSITION OF A MONETARY PENALTY ON BANK OF AMERICA, NATIONAL ASSOCIATION (BANA) FOR NON-COMPLIANCE WITH THE MANDATORY CREDIT ALLOCATION FOR AGRICULTURE, FISHERIES AND RURAL DEVELOPMENT (AFRD) FOR THE QUARTERS ENDED 3-31-2023 THROUGH 6-30-2023. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Other 11. Resolution Date (MM/DD/YYYY): 05/07/2025 Exact Explanation If not exact, provide explanation: DATE OF RECEIPT 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 15,386.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP852,673.62(APPROXIMATELY USD15,386) ON BANA. THE PENALTY AMOUNT WAS REDUCED TO ACCOUNT FOR BANA'S PENALTY AMOUNT BEING OVER-ASSESSED IN CONNECTION WITH A PRIOR LETTER. THE PAYMENT WILL BE MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THE BSP IMPOSED A PENALTY IN THE AMOUNT OF PHP852,673.62(APPROXIMATELY USD15,386) ON BANA. THE PENALTY AMOUNT WAS REDUCED TO ACCOUNT FOR BANA'S PENALTY AMOUNT BEING OVER-ASSESSED IN CONNECTION WITH A PRIOR LETTER. THE PAYMENT WILL BE MADE IN ACCORDANCE WITH THE TERMS OF THE LETTER.
regulatory · block 73PDF pages 672–673
- Regulator name — filed text
- FINANCIAL INDUSTRY REGULATORY AUTHORITY
- Monetary/Fine Amount — filed text
- $ 225,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $225,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
Other filed details
Description of allegations — filed text
THE FINANCIAL INDUSTRY REGULATORY AUTHORITY ("FINRA") ALLEGED THAT, FROM JANUARY 2018 THROUGH DECEMBER 2023, MERRILL LYNCH, PIERCE, FENNER & SMITH ("MERRILL LYNCH") FAILED TO ACCURATELY REPORT SUMMARY AND STATISTICAL CUSTOMER COMPLAINT INFORMATION TO FINRA, IN VIOLATION OF FINRA RULES 4530(D) AND 2010, AND FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SUPERVISORY SYSTEM, INCLUDING WRITTEN SUPERVISORY PROCEDURES, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH FINRA RULE 4530(D), IN VIOLATION OF FINRA RULES 3110(A) AND (B) AND 2010.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $225,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
FINANCIAL INDUSTRY REGULATORY AUTHORITY
2.
Principal Sanction:
Censure
Other Sanctions:
ADMINISTRATIVE PENALTY/FINE
3.
Date Initiated (MM/DD/YYYY):
06/10/2026
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
2024081776401
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE FINANCIAL INDUSTRY REGULATORY AUTHORITY ("FINRA") ALLEGED THAT, FROM JANUARY 2018 THROUGH DECEMBER 2023, MERRILL LYNCH,
PIERCE, FENNER & SMITH ("MERRILL LYNCH") FAILED TO ACCURATELY REPORT SUMMARY AND STATISTICAL CUSTOMER COMPLAINT INFORMATION TO
FINRA, IN VIOLATION OF FINRA RULES 4530(D) AND 2010, AND FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SUPERVISORY SYSTEM, INCLUDING
WRITTEN SUPERVISORY PROCEDURES, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH FINRA RULE 4530(D), IN VIOLATION OF FINRA RULES
3110(A) AND (B) AND 2010.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
06/10/2026
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 225,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF
$225,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF
$225,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.regulatory · block 74PDF pages 674–675
- Regulator name — filed text
- FINANCIAL INDUSTRY REGULATORY AUTHORITY
- Monetary/Fine Amount — filed text
- $ 175,000.00
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $175,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
Other filed details
Description of allegations — filed text
THE FINANCIAL INDUSTRY REGULATORY AUTHORITY ("FINRA") ALLEGED THAT, FROM JANUARY 2021 THROUGH SEPTEMBER 2023, MERRILL LYNCH, PIERCE, FENNER & SMITH ("MERRILL LYNCH") FAILED TO PROVIDE MATERIAL DISCLOSURES REGARDING CERTAIN MUNICIPAL SECURITIES PURCHASED WITH MARKET DISCOUNTS IN SELF-DIRECTED CUSTOMER ACCOUNTS, IN VIOLATION OF MUNICIPAL SECURITIES RULEMAKING BOARD ("MSRB") RULE G- 47, AND FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDING WRITTEN PROCEDURES, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH MERRILL LYNCH'S OBLIGATION TO PROVIDE SELF-DIRECTED CUSTOMERS WITH ALL MATERIAL INFORMATION CONCERNING MUNICIPAL SECURITIES TRANSACTIONS SUBJECT TO A MARKET DISCOUNT AT OR PRIOR TO THE TIME OF TRADE, IN VIOLATION OF MSRB RULE G-27.
Sanction detail — filed text
WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF $175,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
FINANCIAL INDUSTRY REGULATORY AUTHORITY
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions:
CENSURE
3.
Date Initiated (MM/DD/YYYY):
06/18/2026
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
2022073414901
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Debt - Municipal
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE FINANCIAL INDUSTRY REGULATORY AUTHORITY ("FINRA") ALLEGED THAT, FROM JANUARY 2021 THROUGH SEPTEMBER 2023, MERRILL LYNCH,
PIERCE, FENNER & SMITH ("MERRILL LYNCH") FAILED TO PROVIDE MATERIAL DISCLOSURES REGARDING CERTAIN MUNICIPAL SECURITIES PURCHASED
WITH MARKET DISCOUNTS IN SELF-DIRECTED CUSTOMER ACCOUNTS, IN VIOLATION OF MUNICIPAL SECURITIES RULEMAKING BOARD ("MSRB") RULE G-
47, AND FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDING WRITTEN PROCEDURES, REASONABLY DESIGNED TO ACHIEVE
COMPLIANCE WITH MERRILL LYNCH'S OBLIGATION TO PROVIDE SELF-DIRECTED CUSTOMERS WITH ALL MATERIAL INFORMATION CONCERNING
MUNICIPAL SECURITIES TRANSACTIONS SUBJECT TO A MARKET DISCOUNT AT OR PRIOR TO THE TIME OF TRADE, IN VIOLATION OF MSRB RULE G-27.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
06/18/2026
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 175,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of
penalty was waived:
WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF
$175,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
WITHOUT ADMITTING OR DENYING THE FINDINGS, MERRILL LYNCH AGREED TO THE IMPOSITION OF A CENSURE AND A FINE IN THE AMOUNT OF
$175,000. THE FINE WAS PAID IN ACCORDANCE WITH THE TERMS OF THE AWC.regulatory · block 75PDF pages 675–678
- Regulator name — filed text
- SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 7,500,000.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
WITHOUT ADMITTING THE FINDINGS, MLPF&S AGREED TO THE IMPOSITION OF A CEASE-AND-DESIST ORDER, A CENSURE, AND PAYMENT OF A CIVIL MONETARY PENALTY IN THE AMOUNT OF $7,500,000. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER. DRP Pages
Other filed details
Description of allegations — filed text
THE SECURITIES AND EXCHANGE COMMISSION (SEC) ALLEGED THAT, FROM APRIL 8, 2020 THROUGH SEPTEMBER 10, 2024, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPF&S) FAILED TO FILE CERTAIN SUSPICIOUS ACTIVITY REPORTS (SARS) WITH THE U.S. TREASURY DEPARTMENT'S FINANCIAL CRIMES ENFORCEMENT NETWORK, IN WILLFUL VIOLATION OF SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (EXCHANGE ACT) AND RULE 17A-8 THEREUNDER.
Sanction detail — filed text
WITHOUT ADMITTING THE FINDINGS, MLPF&S AGREED TO THE IMPOSITION OF A CEASE-AND-DESIST ORDER, A CENSURE, AND PAYMENT OF A CIVIL MONETARY PENALTY IN THE AMOUNT OF $7,500,000. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) SECURITIES AND EXCHANGE COMMISSION 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: CEASE AND DESIST, CENSURE 3. Date Initiated (MM/DD/YYYY): 06/29/2026 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: FILE NO. 3-22652 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE SECURITIES AND EXCHANGE COMMISSION (SEC) ALLEGED THAT, FROM APRIL 8, 2020 THROUGH SEPTEMBER 10, 2024, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (MLPF&S) FAILED TO FILE CERTAIN SUSPICIOUS ACTIVITY REPORTS (SARS) WITH THE U.S. TREASURY DEPARTMENT'S FINANCIAL CRIMES ENFORCEMENT NETWORK, IN WILLFUL VIOLATION OF SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (EXCHANGE ACT) AND RULE 17A-8 THEREUNDER. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Order 11. Resolution Date (MM/DD/YYYY): 06/29/2026 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 7,500,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: N/A Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: WITHOUT ADMITTING THE FINDINGS, MLPF&S AGREED TO THE IMPOSITION OF A CEASE-AND-DESIST ORDER, A CENSURE, AND PAYMENT OF A CIVIL MONETARY PENALTY IN THE AMOUNT OF $7,500,000. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). WITHOUT ADMITTING THE FINDINGS, MLPF&S AGREED TO THE IMPOSITION OF A CEASE-AND-DESIST ORDER, A CENSURE, AND PAYMENT OF A CIVIL MONETARY PENALTY IN THE AMOUNT OF $7,500,000. THE CIVIL MONETARY PENALTY WAS PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER. DRP Pages
civil judicial · block 1PDF pages 678–679
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Item 11.H. of Part 1A or Item 2.F. of Part 1B of Form ADV. Civil Judicial Check Part 1A item(s) being responded to: 11.H(1)(a) 11.H(1)(b) 11.H(1)(c) 11.H(2) Check Part 1B item(s) being responded to: 2.F(1) 2.F(2) 2.F(3) 2.F(4) 2.F(5) Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Item 11.H. of Part 1A or Item 2.F. of Part 1B. Use only one DRP to report details related to the same event. Unrelated civil judicial actions must be reported on separate DRPs. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: 1206553 This advisory affiliate is a Firm an Individual Registered: Yes No Name: TODD, GEORGE, C (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.H. (1)(a), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Court Action initiated by: (Name of regulator, foreign financial regulatory authority, SRO, commodities exchange, agency, firm, private plaintiff, etc.) 2. Principal Relief Sought: Other Relief Sought: 3. Filing Date of Court Action (MM/DD/YYYY): 03/23/2020 Exact Explanation If not exact, provide explanation: 4. Principal Product Type: Other Product Types: 5. Formal Action was brought in (include name of Federal, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case Number): CH-20-0409 6. Advisory Affiliate Employing Firm when activity occurred which led to the civil judicial action (if applicable): 7. Describe the allegations related to this civil action (your response must fit within the space provided): 8. Current Status? Pending On Appeal Final 9. If on appeal, action appealed to (provide name of court) and Date Appeal Filed (MM/DD/YYYY): 10. If pending, date notice/process was served (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 14 only. 11. How was matter resolved: 12. Resolution Date (MM/DD/YYYY): Exact Explanation If not exact, provide explanation: 13. Resolution Detail: A. Were any of the following Sanctions Ordered or Relief Granted(check appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions: C. Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement, or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: 14. Provide a brief summary of circumstances related to the action(s), allegation(s), disposition(s) and/or finding(s) disclosed above (your response must fit within the space provided).
civil judicial · block 2PDF pages 679–682
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Item 11.H. of Part
1A or Item 2.F. of Part 1B of Form ADV.
Civil Judicial
Check Part 1A item(s) being responded to:
11.H(1)(a)
11.H(1)(b)
11.H(1)(c)
11.H(2)
Check Part 1B item(s) being responded to:
2.F(1)
2.F(2)
2.F(3)
2.F(4)
2.F(5)
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Item 11.H. of Part 1A or Item 2.F. of Part 1B. Use only one DRP to report details related to the
same event. Unrelated civil judicial actions must be reported on separate DRPs.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BANK OF AMERICA
CORPORATION
(For individuals, Last, First,
Middle)
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BANK OF AMERICA, N.A.
(For individuals, Last, First,
Middle)
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BAC HOME LOANS SERVICING,
LP F/K/A COUNTRYWIDE HOME
LOANS SERVICING, LP
(For individuals, Last, First,
Middle)
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
COUNTRYWIDE HOME LOANS,
INC.
(For individuals, Last, First,
Middle)
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
COUNTRYWIDE FINANCIAL
CORPORATION
(For individuals, Last, First,
Middle)
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
COUNTRYWIDE MORTGAGE
VENTURES, LLC
(For individuals, Last, First,
Middle)
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
COUNTRYWIDE BANK, FSB
(For individuals, Last, First,
Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.H.
(1)(a), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Court Action initiated by: (Name of regulator, foreign financial regulatory authority, SRO, commodities exchange, agency, firm, private plaintiff, etc.)
U.S. DEPARTMENT OF JUSTICE AND THE ATTORNEYS GENERAL OF 49 STATES AND THE DISTRICT OF COLUMBIA
2.
Principal Relief Sought:
Civil Penalty(ies)/Fine(s)
Other Relief Sought:
RESTITUTION; ADDITIONAL SERVICING & ORIGINATION STANDARDS
3.
Filing Date of Court Action (MM/DD/YYYY):
04/05/2012
Exact
Explanation
If not exact, provide explanation:
4.
Principal Product Type:
Other
Other Product Types:
RESIDENTIAL MORTGAGE LOAN SERVICING AND ORIGINATION
5.
Formal Action was brought in (include name of Federal, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case
Number):
U.S. DISTRICT COURT FOR THE DISTRICT OF COLUMBIA, DOCKET NUMBER 1:12-CV-00361-RMC
6.
Advisory Affiliate Employing Firm when activity occurred which led to the civil judicial action (if applicable):
7.
Describe the allegations related to this civil action (your response must fit within the space provided):
ON MARCH 12, 2012, THE DEPARTMENT OF JUSTICE AND THE ATTORNEYS GENERAL OF 49 STATES AND THE DISTRICT OF COLUMBIA FILED A COMPLAINT
("COMPLAINT") AND CONSENT JUDGMENT AGAINST BANK OF AMERICA CORPORATION, BANK OF AMERICA, N.A., BAC HOME LOANS SERVICING, LP F/K/A
COUNTRYWIDE HOME LOANS SERVICING, LP, COUNTRYWIDE HOME LOANS, INC., COUNTRYWIDE FINANCIAL CORPORATION, COUNTRYWIDE MORTGAGE
VENTURES, LLC, AND/OR COUNTRYWIDE BANK, FSB (TOGETHER, "BANK OF AMERICA") AND OTHER MAJOR MORTGAGE SERVICERS TO SETTLE A NUMBER
OF RELATED INVESTIGATIONS INTO RESIDENTIAL LOAN SERVICING AND ORIGINATION PRACTICES (THE "SETTLEMENT"). THE COMPLAINT ALLEGED THE
DEFENDANT'S MISCONDUCT RELATED TO ITS ORIGINATION AND SERVICING OF SINGLE FAMILY RESIDENTIAL MORTGAGES CAUSED THE DEFENDANTS TO
HAVE VIOLATED, AMONG OTHER LAWS, THE UNFAIR AND DECEPTIVE ACTS AND PRACTICES LAWS OF THE PLAINTIFF STATES, THE FALSE CLAIMS ACT,
THE FINANCIAL INSTITUTIONS REFORM, RECOVERY, AND ENFORCEMENT ACT OF 1989, THE SERVICEMEMBERS CIVIL RELIEF ACT, AND THE BANKRUPTCY
CODE AND FEDERAL RULES OF BANKRUPTCY PROCEDURE.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, action appealed to (provide name of court) and Date Appeal Filed (MM/DD/YYYY):
10. If pending, date notice/process was served (MM/DD/YYYY):
Exact
Explanation
If not exact, provide explanation:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 14 only.
11. How was matter resolved:
Settled
12. Resolution Date (MM/DD/YYYY):
04/05/2012
Exact
Explanation
If not exact, provide explanation:
13. Resolution Detail:
A. Were any of the following Sanctions Ordered or Relief Granted(check appropriate items)?
Monetary/Fine Amount: $ 0.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions:
THE TOTAL AMOUNT OF THE SETTLEMENT IS $10,956,615,075.00, AND CONSISTS OF THE THREE COMPONENTS AS FURTHER DESCRIBED IN 13.C.
UP TO $120 MILLION OF THIS AMOUNT MAY BE TREATED AS A CIVIL PENALTY AT THE DISCRETION OF THE STATES AND DISTRICT OF COLUMBIA.
THE AMOUNT IS BEING DISCLOSED IN THIS SECTION 13.B INSTEAD OF IN THE BOX ABOVE AS THE EXACT AMOUNT TO BE TREATED AS A CIVIL
PENALTY IS NOT KNOWN. OTHER SANCTIONS: ADDITIONAL SERVICING AND ORIGINATION STANDARDS.
C.
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement, or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion
of penalty was waived:
BANK OF AMERICA CORPORATION AND/OR ITS AFFILIATED ENTITIES SHALL PAY OR CAUSE TO BE PAID INTO AN INTEREST BEARING ESCROW
ACCOUNT TO BE ESTABLISHED FOR THIS PURPOSE THE SUM OF $2,382,415,075, WHICH SUM SHALL BE ADDED TO FUNDS BEING PAID BY OTHER
INSTITUTIONS RESOLVING CLAIMS IN THIS MATTER AND ACCORDING TO CERTAIN CRITERIA ESTABLISHED IN THE SETTLEMENT. UP TO $120
MILLION OF THIS AMOUNT MAY BE TREATED AS A CIVIL PENALTY. IN ADDITION, BANK OF AMERICA SHALL PROVIDE $7,626,200,000 OF RELIEF TO
CONSUMERS WHO MEET CERTAIN ELIGIBILITY CRITERIA RELATING TO SERVICING OF LOANS. THE ADDITIONAL SERVICING AND ORIGINATION
STANDARDS INCLUDE THE DEVELOPMENT OF NEW OR ENHANCED PROGRAMS TO PROVIDE BORROWER ASSISTANCE, THE DEVELOPMENT OF
PROPRIETARY PROGRAMS TO PROVIDE EXPANDED MORTGAGE MODIFICATION SOLUTIONS, INCLUDING THE BROADER USE OF PRINCIPAL
REDUCTIONS IF PERMITTED BY THE MORTGAGE INVESTOR, ENHANCED PROGRAMS FOR UNEMPLOYED, MILITARY SERVICE MEMBERS AND OTHER
CUSTOMERS WITH IDENTIFIED SPECIAL SITUATIONS, ENHANCED FACILITATION OF SHORT SALES, AND THE OFFER OF OTHER ASSISTANCE
PROGRAMS, SUCH AS DEED-IN-LIEU OF FORECLOSURE AND FUNDS FOR FAMILIES TRANSITIONING OUT OF HOME OWNERSHIP. ALSO, BANK OF
AMERICA SHALL PROVIDE $948,000,000 TO A NEW REFINANCING PROGRAM FOR CURRENT CONSUMERS WHO MEET OTHER ELIGIBILITY CRITERIA.
THE REFINANCING PROGRAM IS INTENDED TO EXPAND REFINANCING OPPORTUNITIES OR LOWER INTEREST RATES ON BANK OF AMERICA OWNED
MORTGAGES TO PROVIDE REDUCED PAYMENTS FOR MANY HOMEOWNERS WHO ARE CURRENT ON THEIR PAYMENTS BUT OWE MORE THAN THE
CURRENT VALUE OF THEIR HOMES. FOLLOWING FINALIZATION OF THE SETTLEMENT TERMS, BANK OF AMERICA WILL FINALIZE ITS PROGRAM
ENHANCEMENTS AND PROVIDE ADDITIONAL DETAILS OF ELIGIBILITY REQUIREMENTS.
14. Provide a brief summary of circumstances related to the action(s), allegation(s), disposition(s) and/or finding(s) disclosed above (your response must
fit within the space provided).
BANK OF AMERICA CONSENTED TO THE ENTRY OF THE CONSENT JUDGMENT WITHOUT ADMITTING THE ALLEGATIONS IN THE COMPLAINT OTHER THAN
THOSE FACTS DEEMED NECESSARY TO JURISDICTION. THE ALLEGATIONS ARE DESCRIBED IN ITEM 7 ABOVE AND THE SANCTIONS ARE DESCRIBED IN
ITEM 13 ABOVE. BANK OF AMERICA MADE ITS PAYMENT TO THE ESCROW AGENT ON APRIL 11, 2012. THE SETTLEMENT DOES NOT RESULT IN AN
INJUNCTION OR ANY FINDINGS OF VIOLATIONS OF LAW.civil judicial · block 3PDF pages 682–685
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Item 11.H. of Part
1A or Item 2.F. of Part 1B of Form ADV.
Civil Judicial
Check Part 1A item(s) being responded to:
11.H(1)(a)
11.H(1)(b)
11.H(1)(c)
11.H(2)
Check Part 1B item(s) being responded to:
2.F(1)
2.F(2)
2.F(3)
2.F(4)
2.F(5)
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page.
One event may result in more than one affirmative answer to Item 11.H. of Part 1A or Item 2.F. of Part 1B. Use only one DRP to report details related to the
same event. Unrelated civil judicial actions must be reported on separate DRPs.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BANK OF AMERICA, N.A.
(For individuals, Last, First,
Middle)
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BANC OF AMERICA MORTGAGE
SECURITIES, INC.
(For individuals, Last, First,
Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.H.
(1)(a), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Court Action initiated by: (Name of regulator, foreign financial regulatory authority, SRO, commodities exchange, agency, firm, private plaintiff, etc.)
SECURITIES AND EXCHANGE COMMISSION
2.
Principal Relief Sought:
Injunction
Other Relief Sought:
DISGORGEMENT WITH PREJUDGMENT INTEREST AND CIVIL MONETARY PENALTIES
3.
Filing Date of Court Action (MM/DD/YYYY):
08/06/2013
Exact
Explanation
If not exact, provide explanation:
4.
Principal Product Type:
Other
Other Product Types:
RESIDENTIAL MORTGAGE-BACKED SECURITIES
5.
Formal Action was brought in (include name of Federal, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case
Number):
UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA, CIVIL ACTION NO. 3:13-CV-447
6.
Advisory Affiliate Employing Firm when activity occurred which led to the civil judicial action (if applicable):
7.
Describe the allegations related to this civil action (your response must fit within the space provided):
SEC LITIGATION RELEASE 22772, AUGUST 7, 2013: ON AUGUST 6, 2013, THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") FILED A
CIVIL INJUNCTIVE ACTION AGAINST MERRILL LYNCH, PIERCE, FENNER & SMITH, INC. F/K/A BANC OF AMERICA SECURITIES LLC ("FIRM") AND OTHER
ENTITIES (COLLECTIVELY THE "ENTITIES"). THE COMMISSION ALLEGES THAT THE ENTITIES MADE MATERIAL MISREPRESENTATIONS AND OMISSIONS IN
CONNECTION WITH THE SALE OF RESIDENTIAL MORTGAGE-BACKED SECURITIES. SPECIFICALLY, THE COMPLAINT ALLEGES THAT THE ENTITIES FAILED
TO DISCLOSE THE DISPROPORTIONATE CONCENTRATION OF WHOLESALE LOANS (72% BY UNPAID PRINCIPAL BALANCE) UNDERLYING THE
RESIDENTIAL MORTGAGE-BACKED SECURITIES AS COMPARED TO PRIOR RESIDENTIAL MORTGAGE-BACKED SECURITIES OFFERINGS. THE COMPLAINT
ALSO ALLEGES THAT THE ENTITIES FAILED TO DISCLOSE KNOWN RISKS ASSOCIATED WITH THE HIGH CONCENTRATION OF WHOLESALE LOANS IN THE
RESIDENTIAL MORTGAGE-BACKED SECURITIES INCLUDING HIGHER LIKELIHOOD THAT THE LOANS WOULD BE SUBJECT TO MATERIAL UNDERWRITING
ERRORS, BECOME SEVERELY DELINQUENT, FAIL EARLY IN THE LIFE OF THE LOAN, OR PREPAY. THE COMPLAINT FURTHER ALLEGES THAT THE ENTITIES
VIOLATED REGULATION S-K AND SUBPART REGULATION AB OF THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT") BY FAILING TO DISCLOSE THE
MATERIAL CHARACTERISTICS OF THE POOL OF LOANS UNDERLYING THE RESIDENTIAL MORTGAGE-BACKED SECURITIES. THE COMPLAINT ALSO ALLEGES
THAT THE ENTITIES MADE MATERIAL MISREPRESENTATIONS AND OMISSIONS IN ITS PUBLIC FILINGS AND IN THE LOAN TAPES IT PROVIDED TO
INVESTORS AND RATING AGENCIES THAT THE LOANS IN THE RESIDENTIAL MORTGAGE-BACKED SECURITIES COMPLIED WITH UNDERWRITING
STANDARDS WHEN A MATERIAL AMOUNT DID NOT. FINALLY, THE COMPLAINT ALLEGES THAT THE FIRM VIOLATED SECTION 5(B)(1) OF THE SECURITIES
ACT BY FAILING TO FILE WITH THE COMMISSION CERTAIN LOAN TAPES THAT IT PROVIDED ONLY TO SELECT INVESTORS. THE COMMISSION'S
COMPLAINT, FILED IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA, CHARGES THE FIRM WITH VIOLATING
THE ANTIFRAUD PROVISIONS OF THE FEDERAL SECURITIES LAWS. THE COMPLAINT ALLEGES THAT THAT THE FIRM VIOLATED SECTIONS 17(A)(2) AND
17(A)(3) OF THE SECURITIES ACT. THE COMPLAINT ALSO ALLEGES THAT THE FIRM VIOLATED SECTION 5(B)(1) OF THE SECURITIES ACT. THE
COMPLAINT SEEKS AGAINST THE FIRM A PERMANENT INJUNCTION, DISGORGEMENT WITH PREJUDGMENT INTEREST AND CIVIL MONETARY PENALTIES
PURSUANT SECTION 20(D) OF THE SECURITIES ACT.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, action appealed to (provide name of court) and Date Appeal Filed (MM/DD/YYYY):
10. If pending, date notice/process was served (MM/DD/YYYY):
Exact
Explanation
If not exact, provide explanation:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 14 only.
11. How was matter resolved:
Judgment Rendered
12. Resolution Date (MM/DD/YYYY):
11/25/2014
Exact
Explanation
If not exact, provide explanation:
13. Resolution Detail:
A. Were any of the following Sanctions Ordered or Relief Granted(check appropriate items)?
Monetary/Fine Amount: $
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions:
DISGORGEMENT OF $109,220,000, PREJUDGMENT INTEREST OF $6,620,000, AND CIVIL PENALTY OF $109,220,000.
C.
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement, or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion
of penalty was waived:
ON NOVEMBER 25, 2014, THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA ("DISTRICT COURT") ENTERED
A FINAL JUDGMENT ("JUDGMENT") AGAINST THE FIRM , BANK OF AMERICA, N.A. ("BANA"), AND BANC OF AMERICA MORTGAGE SECURITIES, INC.
("BOAMS") (COLLECTIVELY, THE "RESPONDENTS") THAT ENJOINED RESPONDENTS FROM VIOLATING, DIRECTLY OR INDIRECTLY, SECTIONS 17(A)
(2) AND (3) OF THE SECURITIES ACT OF 1933 ("SECURITIES ACT"), AND THE FIRM AND BOAMS FROM VIOLATING, DIRECTLY OR INDIRECTLY,
SECTION 5(B)(1) OF THE SECURITIES ACT. BANA WAS NOT NAMED AS A DEFENDANT IN CONNECTION WITH THE SECTION 5(B)(1) CLAIM AND
THEREFORE DID NOT CONSENT TO ENTRY OF AN INJUNCTION UNDER THAT SECTION. ADDITIONALLY, AS STATED IN THE SEC'S PRESS RELEASE, "
[A]S PART OF THE [GLOBAL RMBS SETTLEMENT], BANK OF AMERICA AGREED TO RESOLVE THE U.S. [SECURITIES AND EXCHANGE COMMISSION'S
("SEC" OR "COMMISSION")] ORIGINAL CASE BY PAYING DISGORGEMENT OF $109.22 MILLION, PREJUDGMENT INTEREST OF $6.62 MILLION, AND A
PENALTY OF $109.22 MILLION."
14. Provide a brief summary of circumstances related to the action(s), allegation(s), disposition(s) and/or finding(s) disclosed above (your response must
fit within the space provided).
ON NOVEMBER 25, 2014, THE DISTRICT COURT ENTERED A FINAL JUDGMENT AGAINST THE RESPONDENTS THAT ENJOINED RESPONDENTS FROM
VIOLATING, DIRECTLY OR INDIRECTLY, SECTIONS 17(A)(2) AND (3) OF THE SECURITIES ACT OF 1933 ("SECURITIES ACT"), AND THE FIRM AND BOAMS
FROM VIOLATING, DIRECTLY OR INDIRECTLY, SECTION 5(B)(1) OF THE SECURITIES ACT. BANA WAS NOT NAMED AS A DEFENDANT IN CONNECTION
WITH THE SECTION 5(B)(1) CLAIM AND THEREFORE DID NOT CONSENT TO ENTRY OF AN INJUNCTION UNDER THAT SECTION. THE RESPONDENTS
CONSENTED TO THE ENTRY OF THE FINAL JUDGMENT WITHOUT ADMITTING OR DENYING THE ALLEGATIONS IN THE COMPLAINT. THE DISTRICT COURT
RETAINED JURISDICTION OVER THE ADMINISTRATION OF ANY DISTRIBUTION OF THE FUNDS.* Metrics are based on the latest available data, including Form ADV filings, brochures, and relationship summaries pulled from the SEC IAPD, and may be subject to change. Learn what is included in the Rialytix data. Please refer to the firm's official disclosures for the most accurate information using their CRD number. This is not investment advice.