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Statutory Disqualification Index
SEC and FINRA
CASES OF NOTE
SD02002
NOTE: Stipulations of Fact and Consent to Penalty (SFC); Offers of Settlement (OS); and Letters of Acceptance Waiver, and Consent (AWC) are entered into by Respondents without admitting or denying the allegations, but consent is given to the described sanctions & to the entry of findings. Additionally, for AWCs, if FINRA has reason to believe a violation has occurred and the member or associated person does not dispute the violation, FINRA may prepare and request that the member or associated person execute a letter accepting a finding of violation, consenting to the imposition of sanctions, and agreeing to waive such member's or associated person's right to a hearing before a hearing panel, and any right of appeal to the National Adjudicatory Council, the SEC, and the courts, or to otherwise challenge the validity of the letter, if the letter is accepted. The letter shall describe the act or practice engaged in or omitted, the rule, regulation, or statutory provision violated, and the sanction or sanctions to be imposed.

In the Matter of the Association of X with The Sponsoring Firm as a General Securities Representative

MC-400: August 2001 

Redacted Decision
SD Decision No. 02002

DENIED by Hearing Panel of the NASDR Statutory Disqualification Committee/ NAC

Filed Under: Felony, DUI, Recency, Treatment/Rehabilitation, Taping Rule, Remote State, Denial
SD Event

In 2001 X pled guilty to felony of operating a motor vehicle under the influence of alcoholand was sentenced to perform 60 days of community service, serve 120 days in the County work release facility, serve four months on "tether," serve 20 months' probation (until 2002), and participate in an alcoholism treatment program.  Had two prior DUI convictions in 1999 and 1992.

Sentence Expiration

2002

Prior Industry Activity

RR from 1991.

Background

Also licensed insurance representative. No regulatory history during 10 years in industry.  Three customer complaints.1995 Chapter 13 bankruptcy filing resulting in 1999 discharge.

Sponsoring Firm

NASD member since 1998. General securities business. 12 OSJs and 14 branches. Employs 13 unregistered persons, 25 registered principals, and 108 RRs.  One LOC in 2001.  2002 Firm subject to Rule 3010(b)(2) Taping Rule.

Proposed Activity

General securities rep to work from his home in State 1.  Firm located in State 2.  Proposed Supervisor based in State 2.

Proposed Supervisor

President and CEO.  GSR 1991. GSP 1992. With firm since its inception in 1998. No regulatory history. Two customer complaints pertaining to prior firm.  $25,000 settlement.

Member Regulation Recommendation

Permitted

Considerations

Ten year struggle with alcoholism compelled conclusion that failure to seek treatment until third conviction demonstrated poor judgment.  Conviction less than 1 year ago. Pendency of probationary period. X would be operating in a state other than that where main office and proposed supervisor are located --- some hundreds of miles distance.  Proposed weekly videoconferences not sufficiently heightened supervision. Firm has grown rapidly and is subject to Taping Rule and may not be able to handle SD supervision at this time.

Citations

Frank Kufrovich, Exchange Act Rel. No. 4537 (Feb. 13, 2002) [nature and recency of a felony].

 
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