Xís disqualification occurred 8 years ago without recurrence and he was released from probation more than 4 years ago. X sought rehabilitation through AA (had not consumed alcohol since 1994). Conviction not securities or financial related, and no showing of dishonesty. No intervening misconduct.
The failure to disclose the felony on Form U-4 deemed understandable in light of full disclosure to former supervisor by RR and reasonable reliance upon erroneous advice. Off site supervision plan adequate.
1. The Proposed Supervisor will travel from State 1 to meet with X every other week in X's office in State 1. These visits will be unannounced. On the alternate weeks, X will travel to the Proposed Supervisor's office in State 1 where the Proposed Supervisor will conduct his review.
2. The Proposed Supervisor will review all business transactions on a weekly basis.
3. The Proposed Supervisor will initial X's case files and review his sales material on a weekly basis.
4. All new accounts for the various products that X can sell pursuant to his Series 6 registration will be sent (via U.S. mail) to the Proposed Supervisor's attention for approval.
5. X will not act as a supervisor.
6. X will not maintain discretionary accounts.
7. All complaintspertaining to X, whether written or verbal, will be immediately reviewed by the Proposed Supervisor and forwarded to the Compliance Director. Documents pertaining to these complaints should be kept segregated for ease of review.
8. X will be subject to an annual compliance inspection.
9. The Proposed Supervisor will review X's outgoing and incoming written correspondence at the time they are either sent or received. All outgoing correspondence will be reviewed and approved by the Proposed Supervisor.
10. For the duration of X's statutory disqualification, Sponsoring Firm 1 and the Sponsoring Firm 2 must obtain prior approval from Member Regulation if they wish to change X's responsible supervisor from the Proposed Supervisor to another person.
11. Both firms will amend their supervisory procedures to specify who is responsible for supervising X, and the supervisory procedures will include the special supervisory program set forth above.