TRIAD ADVISORS LLC

BrokerCheck Report

TRIAD ADVISORS LLC

Section Title

Report Summary

Firm History

CRD# 25803

1

14

Firm Profile 2 - 13

Page(s)

Firm Operations 15 - 28

Disclosure Events 29

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TRIAD ADVISORS LLC

CRD# 25803

SEC# 8-42007

Main Office Location

5155 PEACHTREE PARKWAYSUITE 3220NORCROSS, GA 30092Regulated by FINRA Atlanta Office

Mailing Address

5155 PEACHTREE PARKWAYSUITE 3220NORCROSS, GA 30092

This firm is a brokerage firm and an investmentadviser firm. For more information aboutinvestment adviser firms, visit the SEC'sInvestment Adviser Public Disclosure website at:

Business Telephone Number

770-840-0363

https://www.adviserinfo.sec.gov

Report Summary for this Firm

This report summary provides an overview of the brokerage firm. Additional information for this firm can be foundin the detailed report.

Disclosure Events

Brokerage firms are required to disclose certaincriminal matters, regulatory actions, civil judicialproceedings and financial matters in which the firm orone of its control affiliates has been involved.

Are there events disclosed about this firm? Yes

The following types of disclosures have beenreported:

Type Count

Regulatory Event 8

Arbitration 5

Firm Profile

This firm is classified as a limited liability company.

This firm was formed in Florida on 12/31/2017.

Its fiscal year ends in December.

Firm History

Information relating to the brokerage firm's historysuch as other business names and successions(e.g., mergers, acquisitions) can be found in thedetailed report.

Firm Operations

Is this brokerage firm currently suspended with anyregulator? No

This firm conducts 15 types of businesses.

This firm is affiliated with financial or investmentinstitutions.

This firm has referral or financial arrangements withother brokers or dealers.

This firm is registered with:

• the SEC• 1 Self-Regulatory Organization• 53 U.S. states and territories

www.finra.org/brokercheck User Guidance

1©2022 FINRA. All rights reserved. Report about TRIAD ADVISORS LLC

https://adviserinfo.sec.gov/firm/summary/25803


http://www.finra.org/brokercheck

http://www.finra.org/brokercheck_reports


This firm is classified as a limited liability company.

This firm was formed in Florida on 12/31/2017.

CRD#

This section provides the brokerage firm's full legal name, "Doing Business As" name, business and mailingaddresses, telephone number, and any alternate name by which the firm conducts business and where such name isused.

Firm Profile

Firm Names and Locations

Its fiscal year ends in December.

TRIAD ADVISORS LLC

SEC#

25803

8-42007

Main Office Location

Mailing Address

Business Telephone Number

Doing business as TRIAD ADVISORS LLC

770-840-0363

Regulated by FINRA Atlanta Office








This section provides information relating to all direct owners and executive officers of the brokerage firm.

Direct Owners and Executive Officers

Firm Profile

Position

Percentage of Ownership

Is this a public reportingcompany?

Position Start Date

Does this owner direct themanagement or policies ofthe firm?

ADVISOR GROUP HOLDINGS, INC.

MEMBER

75% or more

No

Domestic Entity

05/2020

Yes

Is this a domestic or foreignentity or an individual?

Legal Name & CRD# (if any):

Position



Position Start Date


CORNICK, GREGORY ALLEN

DIRECTOR

Less than 5%

No

Individual

12/2020

Yes

3132991



Position


Position Start Date

GERB, JASON

VP, CHIEF COMPLIANCE OFFICER

Less than 5%

Individual

09/2021

3021815








Direct Owners and Executive Officers (continued)

Firm Profile




Less than 5%

No

Yes

Position



Position Start Date


PRICE, JAMES DALE

CHAIRMAN

Less than 5%

No

Individual

05/2020

Yes

1243224



Position



Position Start Date


ROSENTHAL, JEFFREY LIN

CEO/PRESIDENT AND DIRECTOR

Less than 5%

No

Individual

01/2016

Yes

2474795



SCHLUETER, MATTHEW ADAM

2627931







Direct Owners and Executive Officers (continued)

Firm Profile

Position



Position Start Date


EXECUTIVE VICE PRESIDENT, DIRECTOR

Less than 5%

No

Individual

05/2020

Yes

2627931


Position



Position Start Date


SCHMIDT, DAVID MARTIN

TREASURER, FINANCIAL AND OPERATIONS PRINCIPAL

Less than 5%

No

Individual

03/2021

Yes

5675524








This section provides information relating to any indirect owners of the brokerage firm.

Indirect Owners

Firm Profile

AG ARTEMIS HOLDINGS, L.P.

SHAREHOLDER

AG INTERMEDIATE CORP.

75% or more

No

Domestic Entity

08/2019

Yes



Company through whichindirect ownership isestablished

Relationship to Direct Owner

Relationship Established




AG INTERMEDIATE CORP

SHAREHOLDER

LADENBURG THLAMANN FINANCIAL SERVICES INC.

75% or more

No

Domestic Entity

05/2020

Yes









AG PARENT CORP


Domestic Entity









Indirect Owners (continued)

Firm Profile

SHAREHOLDER


75% or more

No

08/2019

Yes







LADENBURG THALMANN FINANCIAL SERVICES, INC.

SHAREHOLDER

AG PARENT CORP.

75% or more

No

Domestic Entity

05/2020

Yes









RCP GENPAR HOLDCO LLC

LIMITED PARTNER

RCP GENPAR LP

75% or more

Domestic Entity

08/2014






Percentage of Ownership7©2022 FINRA. All rights reserved. Report about TRIAD ADVISORS LLC






Firm Profile

75% or more

No

Yes




RCP GENPAR LP

LIMITED PARTNER

RCP OPP FUND II GP, LP

75% or more

No

Domestic Entity

01/2018

Yes










MEMBER

RCP ARTEMIS CO-INVEST GP LLC

75% or more

No

Domestic Entity

05/2019

Yes















Firm Profile

NoIs this a public reportingcompany?


MEMBER

AG ARTEMIS HOLDINGS GP, LLC

75% or more

No

Domestic Entity

05/2019

Yes









THE BERLINSKI FAMILY 2006 TRUST

MEMBER

MRB ICBC LLC

75% or more

No

Domestic Entity

08/2014

Yes









RCP ARTEMIS CO-INVEST, L.P.


Foreign Entity










Firm Profile

LIMITED PARTNER


50% but less than 75%

No

08/2019

Yes







BERLINSKI, MILTON RALPH

MEMBER



No

Individual

08/2014

Yes

1710939









MRB ICBC LLC

MEMBER


Domestic Entity

08/2014





Relationship Established10©2022 FINRA. All rights reserved. Report about TRIAD ADVISORS LLC






Firm Profile


No

08/2014

Yes





AG ARTEMIS HOLDINGS GP, LLC

GENERAL PARTNER


Other General Partners

No

Domestic Entity

05/2019

Yes










GENERAL PARTNER

RCP GENPAR LP


Individual

08/2014

Yes

1710939














Firm Profile

No




INVESTMENT MANAGER

MRB ICBC LLC


No

Individual

08/2014

Yes

1710939










GENERAL PARTNER



No

Individual

01/2018

Yes

1710939















Firm Profile


TRUSTEE

THE BERLINSKI FAMILY 2006 TRUST


No

Individual

06/2006

Yes

1710939









RCP ARTEMIS CO-INVEST GP LLC

GENERAL PARTNER

RCP ARTEMIS CO-INVEST, L.P.


No

Domestic Entity

05/2019

Yes














Firm History

This section provides information relating to any successions (e.g., mergers, acquisitions) involving the firm.

12/31/2017Date of Succession:

This firm was previously:

Predecessor SEC#:

TRIAD ADVISORS, INC.

8-42007

25803Predecessor CRD#:

Description TRIAD ADVISORS, INC AMENDED ITS TAX STATUS FROM A CORPORATIONTO A LIMITED LIABILITY COMPANY EFFECTIVE 12/31/2017. ALL ASSETS ANDLIABILITIES WERE ASSUMED BY NEW LIMITED LIABILITY COMPANY. THEREWERE NO CHANGES IN OWNERSHIP AND/OR CONTROL.

12/31/2017Date of Succession:

This firm was previously:

Predecessor SEC#:

TRIAD ADVISORS, INC.

8-42007

25803Predecessor CRD#:

Description TRIAD ADVISORS, INC AMENDED ITS TAX STATUS FROM A CORPORATIONTO A LIMITED LIABILITY COMPANY EFFECTIVE 12/31/2017. ALL ASSETS ANDLIABILITIES WERE ASSUMED BY NEW LIMITED LIABILITY COMPANY






Firm Operations

RegistrationsThis section provides information about the regulators (Securities and Exchange Commission (SEC), self-regulatoryorganizations (SROs), and U.S. states and territories) with which the brokerage firm is currently registered andlicensed, the date the license became effective, and certain information about the firm's SEC registration.

This firm is currently registered with the SEC, 1 SRO and 53 U.S. states and territories.

SEC Registration Questions

This firm is registered with the SEC as:

A broker-dealer:

A broker-dealer and government securities broker or dealer:

A government securities broker or dealer only:

This firm has ceased activity as a government securities broker or dealer:

Yes

Yes

No

No

Federal Regulator Status Date Effective

SEC Approved 01/18/1990

Self-Regulatory Organization Status Date Effective

FINRA Approved 03/06/1990






Firm Operations

Registrations (continued)

U.S. States &Territories

Status Date Effective

Alabama Approved 08/25/1998

Alaska Approved 04/19/2001

Arizona Approved 07/30/1998

Arkansas Approved 06/05/1998

California Approved 03/20/1998

Colorado Approved 05/21/1998

Connecticut Approved 07/16/1998

Delaware Approved 08/19/1999

District of Columbia Approved 07/08/1998

Florida Approved 03/05/1990

Georgia Approved 06/01/1998

Hawaii Approved 01/28/2000

Idaho Approved 07/09/1999

Illinois Approved 06/22/1998

Indiana Approved 06/25/1998

Iowa Approved 08/05/1998

Kansas Approved 08/12/1998

Kentucky Approved 11/25/1998

Louisiana Approved 06/19/1998

Maine Approved 10/04/1999

Maryland Approved 06/10/1998

Massachusetts Approved 06/12/1998

Michigan Approved 09/28/1998

Minnesota Approved 06/23/1998

Mississippi Approved 12/17/1998

Missouri Approved 06/05/1998

Montana Approved 05/29/1998

Nebraska Approved 02/10/1999

Nevada Approved 07/28/1998

New Hampshire Approved 06/24/1999

New Jersey Approved 05/18/1998

New Mexico Approved 06/24/1998

New York Approved 07/15/1998

U.S. States &Territories

Status Date Effective

North Carolina Approved 07/13/1998

North Dakota Approved 11/04/2003

Ohio Approved 07/22/1998

Oklahoma Approved 06/22/1998

Oregon Approved 01/01/1998

Pennsylvania Approved 01/28/1998

Puerto Rico Approved 05/18/1999

Rhode Island Approved 08/14/1998

South Carolina Approved 05/21/1999

South Dakota Approved 06/09/1998

Tennessee Approved 08/10/1998

Texas Approved 09/30/1998

Utah Approved 06/16/1998

Vermont Approved 03/08/2000

Virgin Islands Approved 07/16/2013

Virginia Approved 06/17/1998

Washington Approved 05/29/1998

West Virginia Approved 06/09/1998

Wisconsin Approved 06/08/1998

Wyoming Approved 06/16/1998






Firm Operations

Types of BusinessThis section provides the types of business, including non-securities business, the brokerage firm is engaged in orexpects to be engaged in.

Other Types of Business

This firm does not effect transactions in commodities, commodity futures, or commodity options.This firm does not engage in other non-securities business.

Non-Securities Business Description:

This firm currently conducts 15 types of businesses.

Types of Business

Broker or dealer retailing corporate equity securities over-the-counter

Broker or dealer selling corporate debt securities

Mutual fund retailer

U S. government securities broker

Municipal securities broker

Broker or dealer selling variable life insurance or annuities

Solicitor of time deposits in a financial institution

Broker or dealer selling oil and gas interests

Put and call broker or dealer or option writer

Investment advisory services

Broker or dealer selling tax shelters or limited partnerships in primary distributions

Non-exchange member arranging for transactions in listed securities by exchange member

Private placements of securities

Broker or dealer involved in a networking, kiosk or similar arrangment with a: bank, savings bank or association, orcredit union

Other - TRIAD ADVISORS, LLC. PARTICIPATES IN INSURANCE THROUGH TRIAD INSURANCE AGENCY.






Firm Operations

Clearing Arrangements

This firm does hold or maintain funds or securities or provide clearing services for other broker-dealer(s).

Introducing Arrangements

This firm does refer or introduce customers to other brokers and dealers.

Name: NATIONAL FINANCIAL SERVICES LLC

Business Address: 260 FRANKLIN STREETSUITE L7BBOSTON, MA 02110

CRD #: 13041

Effective Date: 03/16/1998

Description: THE FIRM WILL OPERATE PURSUANT TO THE (K)(2)(II) EXEMPTIVEPROVISIONS OF SEC RULE 15C3-3 AND WILL NOT HOLD CUSTOMERFUNDS OR SECURITIES. FIRM OPERATES ON A FULLY-DISCLOSED,INTRODUCING BASIS WITH NATIONAL FINANCIAL SERVICES, LLC






Firm Operations

Industry Arrangements

This firm does have books or records maintained by a third party.

This firm does have accounts, funds, or securities maintained by a third party.

Name: THETA LAKE

Business Address: 4 FAIROAKS COURTSAN MATEO, CA 93101


Description: MAINTAIN VIDEO COMMUNICATIONS FOR FINANCIAL PROFESSIONALS

Name: ADVISR WEBSITES

Business Address: 311-1930 PANDORA STREETVANCOUVER, BRITISH COLUMBIA, CANADA V5L 0C7


Description: MAINTAIN WEBSITES AND CHANGES TO WEBSITES FOR FINANCIALPROFESSIONALS.

Name: TWENTY OVER TEN

Business Address: 2171 SANDY DRSUITE 200STATE COLLEGE, PA 16803


Description: MAINTAIN WEBSITES AND CHANGES TO WEBSITES FOR FINANCIALPROFESSIONALS.



CRD #: 13041


Description: THE APPLICANT WILL OPERATE UNDER A FULLY DISCLOSED CLEARINGAGREEMENT WITH NATIONAL FINANCIAL SERVICES LLC



CRD #: 13041






Firm Operations

Industry Arrangements (continued)

This firm does have customer accounts, funds, or securities maintained by a third party.

This firm does not have individuals who control its management or policies through agreement.

This firm does not have individuals who wholly or partly finance the firm's business.

Control Persons/Financing





Business Address: 260 FRANKLIN STREETBOSTON, MA 02110

CRD #: 13041








Firm Operations

Organization AffiliatesThis section provides information on control relationships the firm has with other firms in the securities, investmentadvisory, or banking business.

This firm is, directly or indirectly:

· in control of· controlled by· or under common control withthe following partnerships, corporations, or other organizations engaged in the securities or investmentadvisory business.

Yes

No

No

03/31/2022

434 HARTFORD DRIVENUTLEY, NJ 07110

314622

BLACK DIAMOND FINANCIAL, LLC is under common control with the firm.

THERE ARE RELATED PERSONS OF BLACK DIAMOND FINANCIAL, LLCUNDER COMMON CONTROL WITH THE APPLICANT'S PARENT COMPANY,ADVISOR GROUP, INC.

Description:

Investment AdvisoryActivities:

Securities Activities:

Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

No

Yes

No

05/26/2020

522 MADISON AVE11TH FLOORNEW YORK, NY 10024

LADENBURG THALMANN FINANCIAL SERVICED, INC. controls the firm.

LADENBURG THALMANN FINANCIAL SERVICES, INC. INDIRECTLYCONTROLS THE APPLICANT.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:






Firm Operations

Organization Affiliates (continued)LADENBURG THALMANN FINANCIAL SERVICES, INC. INDIRECTLYCONTROLS THE APPLICANT.

Yes

No

No

02/14/2020

10 EAST 53RD STREET14TH FLOORNEW YORK, NY 10022

171471

REVERENCE CAPITAL PARTNERS is under common control with the firm.

APPLICANT AND REVERENCE CAPITAL PARTNERS ARE UNDER COMMONCONTROL THROUGH ASSOCIATION WITH MILTON RALPH BERLINSKI

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

Yes

Yes

No

02/14/2020

7755 3RD STREET NORTHOAKDALE, MN 55128

421

WOODBURY FINANCIAL SERVICES, INC. is under common control with the firm.

APPLICANT AND WOODBURY FINANCIAL SERVICES, INC. ARE UNDERCOMMON CONTROL OF ADVISOR GROUP HOLDINGS, INC.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

No

02/14/2020

10 EXCHANGE PLACESUITE 1410JERSEY CITY, NJ 07302

VISION2020 WEALTH MANAGEMENT is under common control with the firm.

Foreign Entity:

Effective Date:

Business Address:






Firm Operations

Organization Affiliates (continued)

Yes

No

No

APPLICANT AND VISION2020 WEALTH MANAGEMENT CORPORATION AREUNDER COMMON CONTROL OF ADVISOR GROUP HOLDINGS, INC.

Description:



Country:

Foreign Entity:

Yes

Yes

No

02/14/2020

20 EAST THOMAS ROADSUITE 2000PHOENIX, AZ 85012

133763

SAGEPOINT FINANCIAL, INC. is under common control with the firm.

APPLICANT AND SAGEPOINT FINANCIAL, INC. ARE UNDER COMMONCONTROL OF ADVISOR GROUP HOLDINGS, INC.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

Yes

Yes

No

02/14/2020

10 EXCHANGE PLACESUITE 1410JERSEY CITY, NJ 07302

23131

ROYAL ALLIANCE ASSOCIATES, INC. is under common control with the firm.

APPLICANT AND ROYAL ALLIANCE ASSOCIATES, INC. ARE UNDER COMMONCONTROL OF ADVISOR GROUP HOLDINGS, INC.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:






Firm Operations


APPLICANT AND ROYAL ALLIANCE ASSOCIATES, INC. ARE UNDER COMMONCONTROL OF ADVISOR GROUP HOLDINGS, INC.

Description:

Yes

No

GRAND CAYMAN

Yes

02/14/2020

UGLAND HOUSE, SOUTH CHURCH STREETPO BOX 309GRAND CAYMAN, CAYMAN ISLANDS KY1-1104

RCP ARTEMIS CO-INVEST LP controls the firm.

RCP ARTEMIS CO-INVEST,L.P. INDIRECTLY CONTROLS THE APPLICANTDescription:



Country:

Foreign Entity:

Effective Date:

Business Address:

Yes

Yes

No

02/14/2020

2300 WINDY RIDGE PARKWAYSUITE 750NATLANTA, GA 30339

7461

FSC SECURITIES CORPORATION is under common control with the firm.

APPLICANT AND FSC SECURITIES CORPORATION ARE UNDER COMMONCONTROL OF ADVISOR GROUP HOLDINGS, INC.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

No

02/14/2020


AG PARENT CORP. controls the firm.

Foreign Entity:

Effective Date:

Business Address:






Firm Operations


No

Yes

No

AG PARENT CORP IS AN INDIRECT OWNER OF APPLICANTDescription:



Country:

Foreign Entity:

No

Yes

No

02/14/2020


AG INTERMEDIATE CORP controls the firm.

AG INTERMEDIATE CORP IS AN INDIRECT OWNER OF APPLICANTDescription:



Country:

Foreign Entity:

Effective Date:

Business Address:

Yes

No

No

07/17/2014


171070

TRIAD HYBRID SOLUTIONS, LLC is under common control with the firm.

BOTH TRIAD ADVISORS LLC AND TRIAD HYBRID SOLUTIONS, LLC ARECONTROLLED BY LADENBURG THALMAN FINANCIAL SERVICES, INC.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:






Firm Operations


Yes

No

No

09/28/2012

12325 PORT GRACE BLVDLA VISTA, NE 68128

165127

ARBOR POINT ADVISORS is under common control with the firm.

ARBOR POINT ADVISORS IS AN AFFILIATED REGISTERED INVESTMENTADVISORY FIRM, WHICH IS INDIRECTLY OWNED BY LADENBURGTHALMANN FINANCIAL SERVICES INC.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

Yes

No

No

11/04/2011

12325 PORT GRACE BLVDLA VISTA, NE 68128

110518

SECURITIES AMERICA ADVISORS, INC. is under common control with the firm.

TRIAD ADVISORS, LLC AND SECURITIES AMERICA ADVISORS, INC. AREBOTH OWNED ENTIRELY BY THE SAME PARENT COMPANY, LADENBURGTHALMANN FINANCIAL SERVICES, INC.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

No

11/04/2011

12325 PORT GRACE BLVDLAVISTA, NE 68128

10205

SECURITIES AMERICA, INC. is under common control with the firm.

Foreign Entity:

Effective Date:

Business Address:

CRD #:






Firm Operations


No

Yes

No

TRIAD ADVISORS LLC AND SECURITIES AMERICA, INC. ARE BOTH OWNEDENTIRELY BY THE SAME PARENT COMPANY, LADENBURG THALMANNFINANCIAL SERVICES, INC.

Description:



Country:

Foreign Entity:

Yes

No

No

08/13/2008

520 MADISON AVENUE9TH FLOORNEW YORK, NY 10022

108604

LADENBURG THALMANN ASSET MANAGEMENT INC is under common control with the firm.

TRIAD ADVISORS LLC AND LADENBURG THALMANN ASSET MANAGEMENTINC ARE BOTH OWNED BY THE SAME PARENT COMPANY, LADENBURGTHALMANN FINANCIAL SERVICES, INC.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

No

Yes

No

08/13/2008

520 MADISON AVENUE, 9TH FLOORNEW YORK, NY 10022

505

LADENBURG THALMANN & CO. INC. is under common control with the firm.



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:






Firm Operations


No

TRIAD ADVISORS LLC AND LADENBURG THALMANN & CO. INC ARE BOTHOWNED BY THE SAME PARENT COMPANY, LADENBURG THALMANNFINANCIAL SERVICES, INC.

Description:


This firm is not directly or indirectly, controlled by the following:

· bank holding company· national bank· state member bank of the Federal Reserve System· state non-member bank· savings bank or association· credit union· or foreign bank






Disclosure Events

All firms registered to sell securities or provide investment advice are required to disclose regulatory actions, criminal orcivil judicial proceedings, and certain financial matters in which the firm or one of its control affiliates has been involved.For your convenience, below is a matrix of the number and status of disclosure events involving this brokerage firm orone of its control affiliates. Further information regarding these events can be found in the subsequent pages of thisreport.

Final On AppealPending

Regulatory Event 0 8 0

Arbitration N/A 5 N/A






Disclosure Event Details

What you should know about reported disclosure events:

1. BrokerCheck provides details for any disclosure event that was reported in CRD. It also includessummary information regarding FINRA arbitration awards in cases where the brokerage firm wasnamed as a respondent.

2. Certain thresholds must be met before an event is reported to CRD, for example: o A law enforcement agency must file formal charges before a brokerage firm is required to disclose a

particular criminal event.3. Disclosure events in BrokerCheck reports come from different sources:

o Disclosure events for this brokerage firm were reported by the firm and/or regulators. When the firmand a regulator report information for the same event, both versions of the event will appear in theBrokerCheck report. The different versions will be separated by a solid line with the reporting sourcelabeled.

4. There are different statuses and dispositions for disclosure events: o A disclosure event may have a status of pending, on appeal, or final.

§ A "pending" event involves allegations that have not been proven or formally adjudicated.§ An event that is "on appeal" involves allegations that have been adjudicated but are currently

being appealed.§ A "final" event has been concluded and its resolution is not subject to change.

o A final event generally has a disposition of adjudicated, settled or otherwise resolved.§ An "adjudicated" matter includes a disposition by (1) a court of law in a criminal or civil matter,

or (2) an administrative panel in an action brought by a regulator that is contested by the partycharged with some alleged wrongdoing.

§ A "settled" matter generally involves an agreement by the parties to resolve the matter.Please note that firms may choose to settle customer disputes or regulatory matters forbusiness or other reasons.

§ A "resolved" matter usually involves no payment to the customer and no finding ofwrongdoing on the part of the individual broker. Such matters generally involve customerdisputes.

5. You may wish to contact the brokerage firm to obtain further information regarding any of thedisclosure events contained in this BrokerCheck report.

Regulatory - Final

This type of disclosure event involves (1) a final, formal proceeding initiated by a regulatory authority (e.g., a statesecurities agency, self-regulatory organization, federal regulator such as the U.S. Securities and Exchange Commission,foreign financial regulatory body) for a violation of investment-related rules or regulations; or (2) a revocation orsuspension of the authority of a brokerage firm or its control affiliate to act as an attorney, accountant or federalcontractor.

Disclosure 1 of 8

Reporting Source: Regulator

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOREASONABLY SUPERVISE REPRESENTATIVES' RECOMMENDATIONS OF ANALTERNATIVE MUTUAL FUND. THE FINDINGS STATED THAT THE FIRM DIDNOT HAVE A REASONABLY DESIGNED SUPERVISORY SYSTEM WITHRESPECT TO THE RECOMMENDATION OF ALTERNATIVE MUTUAL FUNDS.THE FIRM HAD NO SYSTEM OR PROCEDURES TO DETERMINE WHETHER ANEW MUTUAL FUND CONSTITUTED A COMPLEX PRODUCT OR WAS ANALTERNATIVE MUTUAL FUND BEFORE FIRM REPRESENTATIVES SOLD IT,SUCH THAT HEIGHTENED DUE DILIGENCE OF THE PRODUCT MAY BEAPPROPRIATE. RATHER, IN REVIEWING AND APPROVING NEW FUNDSBEFORE FIRM REPRESENTATIVES SOLD THEM, THE FIRM SUBJECTEDTHEM TO THE SAME STANDARDS AS TRADITIONAL MUTUAL FUNDS, WHICHDID NOT EVALUATE THE POTENTIAL RISKS AND REWARDS ASSOCIATEDWITH THE STRATEGY OF THE FUNDS. FURTHER, THE FIRM DID NOTCONDUCT ANY DUE DILIGENCE OF MUTUAL FUNDS ADDED TO ITSPLATFORM BY ITS CLEARING FIRM. THE FIRM ALSO DID NOT PROVIDEREASONABLE GUIDANCE OR TRAINING TO REPRESENTATIVESREGARDING THE RISKS AND FEATURES OF ALTERNATIVE MUTUAL FUNDSAND DID NOT HAVE WRITTEN SUPERVISORY PROCEDURES ADVISINGFIRM PRINCIPALS HOW TO SUPERVISE RECOMMENDATIONS OFALTERNATIVE MUTUAL FUNDS. IN ADDITION, THE FIRM UTILIZED ANELECTRONIC TRADE REVIEW SYSTEM TO ASSIST WITH THE SUPERVISIONOF THE TRADING ACTIVITY OF THE FIRM'S FINANCIAL PROFESSIONALS.HOWEVER, THE FIRM FAILED TO CONSIDER WHETHER THE RULES OF THEREVIEW SYSTEM PERTAINING TO TRADITIONAL MUTUAL FUNDS WEREREASONABLE FOR USE IN REVIEWING ALTERNATIVE MUTUAL FUNDS, ORWHETHER IT MAY BE NECESSARY TO TAILOR THE TOOL'S PARAMETERSTO ADDRESS PARTICULAR RISKS AND CHARACTERISTICS OFALTERNATIVE MUTUAL FUNDS. AS A RESULT, THE FIRM'S ALTERNATIVEMUTUAL FUND TRANSACTIONS WERE GENERALLY NOT IDENTIFIED FORADDITIONAL SUITABILITY REVIEW. THE FINDINGS ALSO STATED THAT THEFIRM FAILED TO OBTAIN AND RECORD PRIVATE PLACEMENT CUSTOMERS'ACCOUNT INFORMATION IN THE FIRM'S BOOKS AND RECORDS. THEFIRM'S SUPERVISORY PROCEDURES REQUIRED OFFICE OF SUPERVISORYJURISDICTION (OSJ) BRANCH OFFICES TO SUBMIT COPIES OF NEWACCOUNT FORMS AND SPONSOR SPECIFIC DOCUMENTATION FOR DIRECTFUND AND ALTERNATIVE INVESTMENTS TO THE FIRM'S HOME OFFICE TOENSURE THAT REPRESENTATIVES OPENED A FIRM CLIENT ACCOUNT ANDOBTAINED NEW ACCOUNT FORMS WITH CUSTOMER SUITABILITYINFORMATION FOR ALL DIRECT FUND AND ALTERNATIVE INVESTMENTPURCHASES. THE FIRM ALLOWED ONE OSJ BRANCH TO OFFER THEALTERNATIVE MUTUAL FUND BUT FAILED TO ENFORCE ITS PROCEDURESBY ENSURING THAT THE OSJ BRANCH OFFICE PROVIDED NEW ACCOUNTFORMS AND SPONSOR SPECIFIC DOCUMENTATION TO THE HOME OFFICE.THE FIRM HOME OFFICE DID NOT VERIFY THAT REPRESENTATIVESOBTAINED REQUIRED CUSTOMER INFORMATION PRIOR TO THEIRINVESTMENT IN THE ALTERNATIVE MUTUAL FUND OFFERINGS. THE FIRMHAS SINCE IMPLEMENTED AN ADDITIONAL FEATURE TO ITS SYSTEMSREQUIRING BRANCH OFFICES TO PROVIDE TO THE HOME OFFICE ALLSUCH DOCUMENTATION FOR INVESTMENTS PRIOR TO RECEIVINGCOMMISSION PAYMENTS ON THE INVESTMENTS.

Current Status: Final






Initiated By: FINRA

Principal Sanction(s)/ReliefSought:

Other Sanction(s)/ReliefSought:

Date Initiated: 12/29/2021

Docket/Case Number: 2019061651201

Principal Product Type: Mutual Fund(s)

Other Product Type(s):

WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOREASONABLY SUPERVISE REPRESENTATIVES' RECOMMENDATIONS OF ANALTERNATIVE MUTUAL FUND. THE FINDINGS STATED THAT THE FIRM DIDNOT HAVE A REASONABLY DESIGNED SUPERVISORY SYSTEM WITHRESPECT TO THE RECOMMENDATION OF ALTERNATIVE MUTUAL FUNDS.THE FIRM HAD NO SYSTEM OR PROCEDURES TO DETERMINE WHETHER ANEW MUTUAL FUND CONSTITUTED A COMPLEX PRODUCT OR WAS ANALTERNATIVE MUTUAL FUND BEFORE FIRM REPRESENTATIVES SOLD IT,SUCH THAT HEIGHTENED DUE DILIGENCE OF THE PRODUCT MAY BEAPPROPRIATE. RATHER, IN REVIEWING AND APPROVING NEW FUNDSBEFORE FIRM REPRESENTATIVES SOLD THEM, THE FIRM SUBJECTEDTHEM TO THE SAME STANDARDS AS TRADITIONAL MUTUAL FUNDS, WHICHDID NOT EVALUATE THE POTENTIAL RISKS AND REWARDS ASSOCIATEDWITH THE STRATEGY OF THE FUNDS. FURTHER, THE FIRM DID NOTCONDUCT ANY DUE DILIGENCE OF MUTUAL FUNDS ADDED TO ITSPLATFORM BY ITS CLEARING FIRM. THE FIRM ALSO DID NOT PROVIDEREASONABLE GUIDANCE OR TRAINING TO REPRESENTATIVESREGARDING THE RISKS AND FEATURES OF ALTERNATIVE MUTUAL FUNDSAND DID NOT HAVE WRITTEN SUPERVISORY PROCEDURES ADVISINGFIRM PRINCIPALS HOW TO SUPERVISE RECOMMENDATIONS OFALTERNATIVE MUTUAL FUNDS. IN ADDITION, THE FIRM UTILIZED ANELECTRONIC TRADE REVIEW SYSTEM TO ASSIST WITH THE SUPERVISIONOF THE TRADING ACTIVITY OF THE FIRM'S FINANCIAL PROFESSIONALS.HOWEVER, THE FIRM FAILED TO CONSIDER WHETHER THE RULES OF THEREVIEW SYSTEM PERTAINING TO TRADITIONAL MUTUAL FUNDS WEREREASONABLE FOR USE IN REVIEWING ALTERNATIVE MUTUAL FUNDS, ORWHETHER IT MAY BE NECESSARY TO TAILOR THE TOOL'S PARAMETERSTO ADDRESS PARTICULAR RISKS AND CHARACTERISTICS OFALTERNATIVE MUTUAL FUNDS. AS A RESULT, THE FIRM'S ALTERNATIVEMUTUAL FUND TRANSACTIONS WERE GENERALLY NOT IDENTIFIED FORADDITIONAL SUITABILITY REVIEW. THE FINDINGS ALSO STATED THAT THEFIRM FAILED TO OBTAIN AND RECORD PRIVATE PLACEMENT CUSTOMERS'ACCOUNT INFORMATION IN THE FIRM'S BOOKS AND RECORDS. THEFIRM'S SUPERVISORY PROCEDURES REQUIRED OFFICE OF SUPERVISORYJURISDICTION (OSJ) BRANCH OFFICES TO SUBMIT COPIES OF NEWACCOUNT FORMS AND SPONSOR SPECIFIC DOCUMENTATION FOR DIRECTFUND AND ALTERNATIVE INVESTMENTS TO THE FIRM'S HOME OFFICE TOENSURE THAT REPRESENTATIVES OPENED A FIRM CLIENT ACCOUNT ANDOBTAINED NEW ACCOUNT FORMS WITH CUSTOMER SUITABILITYINFORMATION FOR ALL DIRECT FUND AND ALTERNATIVE INVESTMENTPURCHASES. THE FIRM ALLOWED ONE OSJ BRANCH TO OFFER THEALTERNATIVE MUTUAL FUND BUT FAILED TO ENFORCE ITS PROCEDURESBY ENSURING THAT THE OSJ BRANCH OFFICE PROVIDED NEW ACCOUNTFORMS AND SPONSOR SPECIFIC DOCUMENTATION TO THE HOME OFFICE.THE FIRM HOME OFFICE DID NOT VERIFY THAT REPRESENTATIVESOBTAINED REQUIRED CUSTOMER INFORMATION PRIOR TO THEIRINVESTMENT IN THE ALTERNATIVE MUTUAL FUND OFFERINGS. THE FIRMHAS SINCE IMPLEMENTED AN ADDITIONAL FEATURE TO ITS SYSTEMSREQUIRING BRANCH OFFICES TO PROVIDE TO THE HOME OFFICE ALLSUCH DOCUMENTATION FOR INVESTMENTS PRIOR TO RECEIVINGCOMMISSION PAYMENTS ON THE INVESTMENTS.

Resolution Date: 12/29/2021

Resolution:

Other Sanctions Ordered: PREJUDGMENT INTEREST ON RESTITUTION; UNDERTAKING

Sanction Details: THE FIRM WAS CENSURED, FINED $195,000, ORDERED TO PAY $510,256.57,PLUS INTEREST, IN RESTITUTION TO CUSTOMERS, AND REQUIRED TOCERTIFY THAT THE FIRM HAS ESTABLISHED AND IMPLEMENTED POLICIES,PROCEDURES, AND INTERNAL CONTROLS REASONABLY DESIGNED TOADDRESS AND REMEDIATE THE ISSUES IDENTIFIED IN THIS AWC. FINEPAID IN FULL ON JANUARY 11, 2022.

Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?

No

Sanctions Ordered: CensureMonetary/Fine $195,000.00Disgorgement/Restitution

Acceptance, Waiver & Consent(AWC)

iReporting Source: Firm





https://www.finra.org/rules-guidance/oversight-enforcement/finra-disciplinary-actions?search=2019061651201


Initiated By: FINRA


Restitution


CENSURE





WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOREASONABLY SUPERVISE REPRESENTATIVES' RECOMMENDATIONS OF ANALTERNATIVE MUTUAL FUND. THE FINDINGS STATED THAT THE FIRM DIDNOT HAVE A REASONABLY DESIGNED SUPERVISORY SYSTEM WITHRESPECT TO THE RECOMMENDATION OF ALTERNATIVE MUTUAL FUNDS.THE FIRM HAD NO SYSTEM OR PROCEDURES TO DETERMINE WHETHER ANEW MUTUAL FUND CONSTITUTED A COMPLEX PRODUCT OR WAS ANALTERNATIVE MUTUAL FUND BEFORE FIRM REPRESENTATIVES SOLD IT,SUCH THAT HEIGHTENED DUE DILIGENCE OF THE PRODUCT MAY BEAPPROPRIATE. RATHER, IN REVIEWING AND APPROVING NEW FUNDSBEFORE FIRM REPRESENTATIVES SOLD THEM, THE FIRM SUBJECTEDTHEM TO THE SAME STANDARDS AS TRADITIONAL MUTUAL FUNDS, WHICHDID NOT EVALUATE THE POTENTIAL RISKS AND REWARDS ASSOCIATEDWITH THE STRATEGY OF THE FUNDS. FURTHER, THE FIRM DID NOTCONDUCT ANY DUE DILIGENCE OF MUTUAL FUNDS ADDED TO ITSPLATFORM BY ITS CLEARING FIRM. THE FIRM ALSO DID NOT PROVIDEREASONABLE GUIDANCE OR TRAINING TO REPRESENTATIVESREGARDING THE RISKS AND FEATURES OF ALTERNATIVE MUTUAL FUNDSAND DID NOT HAVE WRITTEN SUPERVISORY PROCEDURES ADVISINGFIRM PRINCIPALS HOW TO SUPERVISE RECOMMENDATIONS OFALTERNATIVE MUTUAL FUNDS. IN ADDITION, THE FIRM UTILIZED ANELECTRONIC TRADE REVIEW SYSTEM TO ASSIST WITH THE SUPERVISIONOF THE TRADING ACTIVITY OF THE FIRM'S FINANCIAL PROFESSIONALS.HOWEVER, THE FIRM FAILED TO CONSIDER WHETHER THE RULES OF THEREVIEW SYSTEM PERTAINING TO TRADITIONAL MUTUAL FUNDS WEREREASONABLE FOR USE IN REVIEWING ALTERNATIVE MUTUAL FUNDS, ORWHETHER IT MAY BE NECESSARY TO TAILOR THE TOOL'S PARAMETERSTO ADDRESS PARTICULAR RISKS AND CHARACTERISTICS OFALTERNATIVE MUTUAL FUNDS. AS A RESULT, THE FIRM'S ALTERNATIVEMUTUAL FUND TRANSACTIONS WERE GENERALLY NOT IDENTIFIED FORADDITIONAL SUITABILITY REVIEW. THE FINDINGS ALSO STATED THAT THEFIRM FAILED TO OBTAIN AND RECORD PRIVATE PLACEMENT CUSTOMERS'ACCOUNT INFORMATION IN THE FIRM'S BOOKS AND RECORDS. THEFIRM'S SUPERVISORY PROCEDURES REQUIRED OFFICE OF SUPERVISORYJURISDICTION (OSJ) BRANCH OFFICES TO SUBMIT COPIES OF NEWACCOUNT FORMS AND SPONSOR SPECIFIC DOCUMENTATION FOR DIRECTFUND AND ALTERNATIVE INVESTMENTS TO THE FIRM'S HOME OFFICE TOENSURE THAT REPRESENTATIVES OPENED A FIRM CLIENT ACCOUNT ANDOBTAINED NEW ACCOUNT FORMS WITH CUSTOMER SUITABILITYINFORMATION FOR ALL DIRECT FUND AND ALTERNATIVE INVESTMENTPURCHASES. THE FIRM ALLOWED ONE OSJ BRANCH TO OFFER THEALTERNATIVE MUTUAL FUND BUT FAILED TO ENFORCE ITS PROCEDURESBY ENSURING THAT THE OSJ BRANCH OFFICE PROVIDED NEW ACCOUNTFORMS AND SPONSOR SPECIFIC DOCUMENTATION TO THE HOME OFFICE.THE FIRM HOME OFFICE DID NOT VERIFY THAT REPRESENTATIVESOBTAINED REQUIRED CUSTOMER INFORMATION PRIOR TO THEIRINVESTMENT IN THE ALTERNATIVE MUTUAL FUND OFFERINGS. THE FIRMHAS SINCE IMPLEMENTED AN ADDITIONAL FEATURE TO ITS SYSTEMSREQUIRING BRANCH OFFICES TO PROVIDE TO THE HOME OFFICE ALLSUCH DOCUMENTATION FOR INVESTMENTS PRIOR TO RECEIVINGCOMMISSION PAYMENTS ON THE INVESTMENTS.


Resolution:

Other Sanctions Ordered: PREJUDGMENT INTEREST ON RESTITUTION; UNDERTAKING

Sanction Details: THE FIRM WAS CENSURED, FINED $195,000, ORDERED TO PAY $510,256.57,PLUS INTEREST, IN RESTITUTION TO CUSTOMERS, AND REQUIRED TOCERTIFY THAT THE FIRM HAS ESTABLISHED AND IMPLEMENTED POLICIES,PROCEDURES, AND INTERNAL CONTROLS REASONABLY DESIGNED TOADDRESS AND REMEDIATE THE ISSUES IDENTIFIED IN THIS AWC.



Disclosure 2 of 8

i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOESTABLISH AND MAINTAIN A REASONABLE SUPERVISORY SYSTEM TOACHIEVE COMPLIANCE WITH SUITABILITY REQUIREMENTS REGARDINGSWITCHING AND SHORT-TERM TRADING OF CLASS A SHARE MUTUALFUNDS AND FAILED TO SUPERVISE SUCH TRADING. THE FINDINGS STATEDTHAT THE FIRM RELIED ON ITS AUTOMATED SURVEILLANCE SYSTEM TOIDENTIFY MUTUAL FUND SWITCHES AND ON DESIGNATED PRINCIPALS TOOBTAIN AND REVIEW A SIGNED SWITCH LETTER FROM THE CUSTOMERDETAILING THE RATIONALE FOR THE SWITCH. THE SYSTEM, HOWEVER,ALLOWED DESIGNATED PRINCIPALS TO APPROVE A TRANSACTIONBEFORE THE FIRM RECEIVED THE SWITCH LETTER. IN MANY CASES, THEFIRM DID ON RECEIVE SWITCH LETTERS UNTIL MONTHS AFTER THETRANSACTION OCCURRED, AND IN SOME INSTANCES, THE FIRM NEVERRECEIVED A SWITCH LETTER. THE WSPS ALSO REQUIRED EVIDENCE OFSUPERVISORY REVIEW BY THE DESIGNATED PRINCIPAL INITIALING THETICKET/APPLICATION AND THE PURCHASE OR SALES BLOTTER. IN MANYINSTANCES, THE FIRM'S DESIGNATED PRINCIPALS FAILED TO REVIEW THETRANSACTIONS PRIOR TO EXECUTION. AS A RESULT, A REGISTEREDREPRESENTATIVE ASSOCIATED WITH THE FIRM ENGAGED IN SHORT-TERM, UNSUITABLE PURCHASES AND SALES AND SWITCHING OF MUTUALFUNDS IN CUSTOMER ACCOUNTS RESULTING IN LOSSES OF $43,998.48.THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO ESTABLISH,MAINTAIN, AND ENFORCE REASONABLE SUPERVISORY SYSTEM ANDWSPS THAT WERE REASONABLY DESIGNED TO IDENTIFY POSSIBLEINAPPROPRIATE RATES OF VARIABLE ANNUITY (VA) EXCHANGES.SPECIFICALLY, THE FIRM'S WSPS FAILED TO SET FORTH ANYPROCEDURES FOR REVIEW OF OR CALCULATION OF RATES OF VAEXCHANGES. INSTEAD, THE FIRM RELIED ON TWO DESIGNATEDPRINCIPALS TO IDENTIFY PROBLEMATIC RATES OF EXCHANGE WITHOUTANY EXCEPTION REPORTS OR OTHER TOOLS. THE ONLY TOOL THEPRINCIPALS HAD ACCESS TO, THE FIRM'S VA BLOTTER, FAILED TODISTINGUISH BETWEEN VA EXCHANGES AND REPLACEMENTS. THE FIRMSOLD $743 MILLION IN VAS WHICH ACCOUNTED FOR OVER 15 PERCENTOF ITS OVERALL SALES. THE FIRM HAD 21,927 VA EXCHANGES, WHICHACCOUNTED FOR $199.4 MILLION OF THE $743 MILLION. BECAUSE THEFIRM'S BLOTTER DID NOT DISTINGUISH BETWEEN EXCHANGES ANDREPLACEMENTS FROM OTHER VA TRANSACTIONS, THE FIRM WASUNABLE TO MONITOR AND REASONABLY SUPERVISE TO DETERMINEWHETHER THERE WERE ANY POTENTIALLY INAPPROPRIATE RATES OFEXCHANGE. GIVEN THE LARGE VOLUME OF VA TRANSACTIONS, IT WASUNREASONABLE TO EXPECT THAT THE TWO DESIGNATED PRINCIPALSCOULD REASONABLY SURVEIL ALL THE VA APPLICATIONS FOR TRENDSAND RATES OF EXCHANGE AMONG ITS REGISTERED REPRESENTATIVESWITHOUT ACCESS TO ACCURATE HISTORICAL DATA, SYSTEMATICSURVEILLANCE TOOLS, OR GUIDANCE FROM THE FIRM. AS A RESULT, THEFIRM FAILED TO IDENTIFY PATTERNS OR TRENDS IN VA EXCHANGETRANSACTIONS BY ITS REGISTERED REPRESENTATIVES. THE FINDINGSALSO INCLUDED THAT THE FIRM FAILED TO TIMELY FILE DISCLOSURES INCONNECTION WITH CUSTOMER-RELATED ARBITRATIONS THAT RESULTEDIN SETTLEMENTS GREATER THAN $25,000, FAILED TO TIMELY REPORTWRITTEN CUSTOMER COMPLAINTS, FAILED TO TIMELY UPDATE ITSREGISTERED REPRESENTATIVES' FORM U4 TO DISCLOSE REPORTABLEEVENTS RELATED TO ARBITRATION FILINGS AND SETTLEMENTS, ANDFAILED TO TIMELY UPDATE FORMER REGISTERED REPRESENTATIVES'FORM U5 TO DISCLOSE REPORTABLE EVENTS INVOLVING ARBITRATIONCLAIMS AND SETTLEMENTS.








WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOESTABLISH AND MAINTAIN A REASONABLE SUPERVISORY SYSTEM TOACHIEVE COMPLIANCE WITH SUITABILITY REQUIREMENTS REGARDINGSWITCHING AND SHORT-TERM TRADING OF CLASS A SHARE MUTUALFUNDS AND FAILED TO SUPERVISE SUCH TRADING. THE FINDINGS STATEDTHAT THE FIRM RELIED ON ITS AUTOMATED SURVEILLANCE SYSTEM TOIDENTIFY MUTUAL FUND SWITCHES AND ON DESIGNATED PRINCIPALS TOOBTAIN AND REVIEW A SIGNED SWITCH LETTER FROM THE CUSTOMERDETAILING THE RATIONALE FOR THE SWITCH. THE SYSTEM, HOWEVER,ALLOWED DESIGNATED PRINCIPALS TO APPROVE A TRANSACTIONBEFORE THE FIRM RECEIVED THE SWITCH LETTER. IN MANY CASES, THEFIRM DID ON RECEIVE SWITCH LETTERS UNTIL MONTHS AFTER THETRANSACTION OCCURRED, AND IN SOME INSTANCES, THE FIRM NEVERRECEIVED A SWITCH LETTER. THE WSPS ALSO REQUIRED EVIDENCE OFSUPERVISORY REVIEW BY THE DESIGNATED PRINCIPAL INITIALING THETICKET/APPLICATION AND THE PURCHASE OR SALES BLOTTER. IN MANYINSTANCES, THE FIRM'S DESIGNATED PRINCIPALS FAILED TO REVIEW THETRANSACTIONS PRIOR TO EXECUTION. AS A RESULT, A REGISTEREDREPRESENTATIVE ASSOCIATED WITH THE FIRM ENGAGED IN SHORT-TERM, UNSUITABLE PURCHASES AND SALES AND SWITCHING OF MUTUALFUNDS IN CUSTOMER ACCOUNTS RESULTING IN LOSSES OF $43,998.48.THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO ESTABLISH,MAINTAIN, AND ENFORCE REASONABLE SUPERVISORY SYSTEM ANDWSPS THAT WERE REASONABLY DESIGNED TO IDENTIFY POSSIBLEINAPPROPRIATE RATES OF VARIABLE ANNUITY (VA) EXCHANGES.SPECIFICALLY, THE FIRM'S WSPS FAILED TO SET FORTH ANYPROCEDURES FOR REVIEW OF OR CALCULATION OF RATES OF VAEXCHANGES. INSTEAD, THE FIRM RELIED ON TWO DESIGNATEDPRINCIPALS TO IDENTIFY PROBLEMATIC RATES OF EXCHANGE WITHOUTANY EXCEPTION REPORTS OR OTHER TOOLS. THE ONLY TOOL THEPRINCIPALS HAD ACCESS TO, THE FIRM'S VA BLOTTER, FAILED TODISTINGUISH BETWEEN VA EXCHANGES AND REPLACEMENTS. THE FIRMSOLD $743 MILLION IN VAS WHICH ACCOUNTED FOR OVER 15 PERCENTOF ITS OVERALL SALES. THE FIRM HAD 21,927 VA EXCHANGES, WHICHACCOUNTED FOR $199.4 MILLION OF THE $743 MILLION. BECAUSE THEFIRM'S BLOTTER DID NOT DISTINGUISH BETWEEN EXCHANGES ANDREPLACEMENTS FROM OTHER VA TRANSACTIONS, THE FIRM WASUNABLE TO MONITOR AND REASONABLY SUPERVISE TO DETERMINEWHETHER THERE WERE ANY POTENTIALLY INAPPROPRIATE RATES OFEXCHANGE. GIVEN THE LARGE VOLUME OF VA TRANSACTIONS, IT WASUNREASONABLE TO EXPECT THAT THE TWO DESIGNATED PRINCIPALSCOULD REASONABLY SURVEIL ALL THE VA APPLICATIONS FOR TRENDSAND RATES OF EXCHANGE AMONG ITS REGISTERED REPRESENTATIVESWITHOUT ACCESS TO ACCURATE HISTORICAL DATA, SYSTEMATICSURVEILLANCE TOOLS, OR GUIDANCE FROM THE FIRM. AS A RESULT, THEFIRM FAILED TO IDENTIFY PATTERNS OR TRENDS IN VA EXCHANGETRANSACTIONS BY ITS REGISTERED REPRESENTATIVES. THE FINDINGSALSO INCLUDED THAT THE FIRM FAILED TO TIMELY FILE DISCLOSURES INCONNECTION WITH CUSTOMER-RELATED ARBITRATIONS THAT RESULTEDIN SETTLEMENTS GREATER THAN $25,000, FAILED TO TIMELY REPORTWRITTEN CUSTOMER COMPLAINTS, FAILED TO TIMELY UPDATE ITSREGISTERED REPRESENTATIVES' FORM U4 TO DISCLOSE REPORTABLEEVENTS RELATED TO ARBITRATION FILINGS AND SETTLEMENTS, ANDFAILED TO TIMELY UPDATE FORMER REGISTERED REPRESENTATIVES'FORM U5 TO DISCLOSE REPORTABLE EVENTS INVOLVING ARBITRATIONCLAIMS AND SETTLEMENTS.






Initiated By: FINRA






Other Product Type(s): VARIABLE ANNUITIES

WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOESTABLISH AND MAINTAIN A REASONABLE SUPERVISORY SYSTEM TOACHIEVE COMPLIANCE WITH SUITABILITY REQUIREMENTS REGARDINGSWITCHING AND SHORT-TERM TRADING OF CLASS A SHARE MUTUALFUNDS AND FAILED TO SUPERVISE SUCH TRADING. THE FINDINGS STATEDTHAT THE FIRM RELIED ON ITS AUTOMATED SURVEILLANCE SYSTEM TOIDENTIFY MUTUAL FUND SWITCHES AND ON DESIGNATED PRINCIPALS TOOBTAIN AND REVIEW A SIGNED SWITCH LETTER FROM THE CUSTOMERDETAILING THE RATIONALE FOR THE SWITCH. THE SYSTEM, HOWEVER,ALLOWED DESIGNATED PRINCIPALS TO APPROVE A TRANSACTIONBEFORE THE FIRM RECEIVED THE SWITCH LETTER. IN MANY CASES, THEFIRM DID ON RECEIVE SWITCH LETTERS UNTIL MONTHS AFTER THETRANSACTION OCCURRED, AND IN SOME INSTANCES, THE FIRM NEVERRECEIVED A SWITCH LETTER. THE WSPS ALSO REQUIRED EVIDENCE OFSUPERVISORY REVIEW BY THE DESIGNATED PRINCIPAL INITIALING THETICKET/APPLICATION AND THE PURCHASE OR SALES BLOTTER. IN MANYINSTANCES, THE FIRM'S DESIGNATED PRINCIPALS FAILED TO REVIEW THETRANSACTIONS PRIOR TO EXECUTION. AS A RESULT, A REGISTEREDREPRESENTATIVE ASSOCIATED WITH THE FIRM ENGAGED IN SHORT-TERM, UNSUITABLE PURCHASES AND SALES AND SWITCHING OF MUTUALFUNDS IN CUSTOMER ACCOUNTS RESULTING IN LOSSES OF $43,998.48.THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO ESTABLISH,MAINTAIN, AND ENFORCE REASONABLE SUPERVISORY SYSTEM ANDWSPS THAT WERE REASONABLY DESIGNED TO IDENTIFY POSSIBLEINAPPROPRIATE RATES OF VARIABLE ANNUITY (VA) EXCHANGES.SPECIFICALLY, THE FIRM'S WSPS FAILED TO SET FORTH ANYPROCEDURES FOR REVIEW OF OR CALCULATION OF RATES OF VAEXCHANGES. INSTEAD, THE FIRM RELIED ON TWO DESIGNATEDPRINCIPALS TO IDENTIFY PROBLEMATIC RATES OF EXCHANGE WITHOUTANY EXCEPTION REPORTS OR OTHER TOOLS. THE ONLY TOOL THEPRINCIPALS HAD ACCESS TO, THE FIRM'S VA BLOTTER, FAILED TODISTINGUISH BETWEEN VA EXCHANGES AND REPLACEMENTS. THE FIRMSOLD $743 MILLION IN VAS WHICH ACCOUNTED FOR OVER 15 PERCENTOF ITS OVERALL SALES. THE FIRM HAD 21,927 VA EXCHANGES, WHICHACCOUNTED FOR $199.4 MILLION OF THE $743 MILLION. BECAUSE THEFIRM'S BLOTTER DID NOT DISTINGUISH BETWEEN EXCHANGES ANDREPLACEMENTS FROM OTHER VA TRANSACTIONS, THE FIRM WASUNABLE TO MONITOR AND REASONABLY SUPERVISE TO DETERMINEWHETHER THERE WERE ANY POTENTIALLY INAPPROPRIATE RATES OFEXCHANGE. GIVEN THE LARGE VOLUME OF VA TRANSACTIONS, IT WASUNREASONABLE TO EXPECT THAT THE TWO DESIGNATED PRINCIPALSCOULD REASONABLY SURVEIL ALL THE VA APPLICATIONS FOR TRENDSAND RATES OF EXCHANGE AMONG ITS REGISTERED REPRESENTATIVESWITHOUT ACCESS TO ACCURATE HISTORICAL DATA, SYSTEMATICSURVEILLANCE TOOLS, OR GUIDANCE FROM THE FIRM. AS A RESULT, THEFIRM FAILED TO IDENTIFY PATTERNS OR TRENDS IN VA EXCHANGETRANSACTIONS BY ITS REGISTERED REPRESENTATIVES. THE FINDINGSALSO INCLUDED THAT THE FIRM FAILED TO TIMELY FILE DISCLOSURES INCONNECTION WITH CUSTOMER-RELATED ARBITRATIONS THAT RESULTEDIN SETTLEMENTS GREATER THAN $25,000, FAILED TO TIMELY REPORTWRITTEN CUSTOMER COMPLAINTS, FAILED TO TIMELY UPDATE ITSREGISTERED REPRESENTATIVES' FORM U4 TO DISCLOSE REPORTABLEEVENTS RELATED TO ARBITRATION FILINGS AND SETTLEMENTS, ANDFAILED TO TIMELY UPDATE FORMER REGISTERED REPRESENTATIVES'FORM U5 TO DISCLOSE REPORTABLE EVENTS INVOLVING ARBITRATIONCLAIMS AND SETTLEMENTS.


Resolution:

Other Sanctions Ordered:

Sanction Details: THE FIRM WAS CENSURED, FINED $150,000, AND SHALL PAY RESTITUTIONOF $43,998.48 PLUS INTEREST. FINE PAID IN FULL ON FEBRUARY 24, 2021.


No




Allegations: FINRA ALLEGED THAT DURING THE PERIOD FROM JUNE 2015 THROUGHDECEMBER 2017, THE FIR FAILED TO ESTABLISH AND MAINTAIN AREASONABLE SUPERVISORY SYSTEM RELATED TO MONITORINGVARIABLE ANNUITY EXCHANGES; MONITORING SHORT-TERM ANDSUITABLE MUTUAL FUND SWITCHES; AND FAILURE TO MAKE TIMELYSTATISTICAL DISCLOSURE FILINGS.








Initiated By: FINANCIAL INDUSTRY REGULATORY AUTHORITY


Censure


FINE AND RESTITUTION



Principal Product Type: Annuity(ies) - Variable

Other Product Type(s): MUTUAL FUNDS

Allegations: FINRA ALLEGED THAT DURING THE PERIOD FROM JUNE 2015 THROUGHDECEMBER 2017, THE FIR FAILED TO ESTABLISH AND MAINTAIN AREASONABLE SUPERVISORY SYSTEM RELATED TO MONITORINGVARIABLE ANNUITY EXCHANGES; MONITORING SHORT-TERM ANDSUITABLE MUTUAL FUND SWITCHES; AND FAILURE TO MAKE TIMELYSTATISTICAL DISCLOSURE FILINGS.


Resolution:


Sanction Details: THE FIRM CONSENTED TO A CENSURE; FINE OF $150,000; RESTITUTIONOF $43,998.48 PLUS INTEREST.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDING, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND ENTRY OF FINDINGS. THEREFORE,THE FIRM IS CENSURED, FINED $150,000 AND WILL PAY RESTITUTION OF$43,998.48, PLUS INTEREST.



Disclosure 3 of 8

i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOIDENTIFY AND APPLY SALES CHARGE DISCOUNTS TO CERTAINCUSTOMERS' ELIGIBLE PURCHASES OF UNIT INVESTMENT TRUSTS (UITS)THAT RESULTED IN CUSTOMERS PAYING EXCESSIVE SALES CHARGES OFAPPROXIMATELY $102,631.62. THE FINDINGS STATED THAT THE FIRMFAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SUPERVISORY SYSTEMAND ADEQUATE WSPS REASONABLY DESIGNED TO ENSURE CUSTOMERSRECEIVED SALES CHARGE DISCOUNTS ON ALL ELIGIBLE UIT PURCHASES.THE FIRM HAD NO SUPERVISORY SYSTEM DESIGNED TO IDENTIFY ANDAPPLY SALES CHARGE DISCOUNTS. THE FIRM IMPLEMENTED AN ALERTSYSTEM TO IDENTIFY UIT BREAKPOINT DISCOUNTS, BUT THE ALERTSYSTEM DID NOT APPLY TO ROLLOVERS AND EXCHANGES, WHICHACCOUNTED FOR MORE THAN 85 PERCENT OF ITS MISSED DISCOUNTS.








Initiated By: FINRA





Principal Product Type: Unit Investment Trust(s)


WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOIDENTIFY AND APPLY SALES CHARGE DISCOUNTS TO CERTAINCUSTOMERS' ELIGIBLE PURCHASES OF UNIT INVESTMENT TRUSTS (UITS)THAT RESULTED IN CUSTOMERS PAYING EXCESSIVE SALES CHARGES OFAPPROXIMATELY $102,631.62. THE FINDINGS STATED THAT THE FIRMFAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SUPERVISORY SYSTEMAND ADEQUATE WSPS REASONABLY DESIGNED TO ENSURE CUSTOMERSRECEIVED SALES CHARGE DISCOUNTS ON ALL ELIGIBLE UIT PURCHASES.THE FIRM HAD NO SUPERVISORY SYSTEM DESIGNED TO IDENTIFY ANDAPPLY SALES CHARGE DISCOUNTS. THE FIRM IMPLEMENTED AN ALERTSYSTEM TO IDENTIFY UIT BREAKPOINT DISCOUNTS, BUT THE ALERTSYSTEM DID NOT APPLY TO ROLLOVERS AND EXCHANGES, WHICHACCOUNTED FOR MORE THAN 85 PERCENT OF ITS MISSED DISCOUNTS.


Resolution:

Other Sanctions Ordered: PLUS INTEREST ON RESTITUTION

Sanction Details: THE FIRM WAS CENSURED, FINED $125,000, AND ORDERED TO PAY$102,631.62, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS.

FINE PAID IN FULL ON APRIL 11, 2016.


No




Allegations: FROM MAY 1, 2009 TO APRIL 30, 2014, TRIAD FAILED TO APPLY SALESCHARGE DISCOUNTS TO CERTAIN CUSTOMERS' ELIGIBLE PURCHASES OFUITS IN VIOLATION OF FINRA RULE 2010.








Initiated By: FINRA


Civil and Administrative Penalt(ies) /Fine(s)




Principal Product Type: Unit Investment Trust(s)


Allegations: FROM MAY 1, 2009 TO APRIL 30, 2014, TRIAD FAILED TO APPLY SALESCHARGE DISCOUNTS TO CERTAIN CUSTOMERS' ELIGIBLE PURCHASES OFUITS IN VIOLATION OF FINRA RULE 2010.


Resolution:


Sanction Details: FINE - $125,000RESTITUTION - $102,631.62



Disclosure 4 of 8

i


Initiated By: FLORIDA OFFICE OF FINANCIAL REGULATION




Docket/Case Number: 0371-S-7/13

URL for Regulatory Action:

Principal Product Type: No Product


Allegations: N/A












Resolution:

Other Sanctions Ordered: N/A

Sanction Details: 7/22/2015 - $7,500 ADMINISTRATIVE FINE PAID IN FULL.

Regulator Statement ON JULY 22, 2015, THE OFFICE OF FINANCIAL REGULATION ENTERED AFINAL ORDER ADOPTING THE STIPULATION AND CONSENT AGREEMENT INTHE MATTER OF TRIAD ADVISORS, INC. TRIAD ADVISORS, INC. NEITHERADMITTED NOR DENIED THE FINDINGS BUT CONSENTED TO THE ENTRYOF FINDINGS BY THE OFFICE. THE OFFICE FOUND THAT TRIAD ADVISORS,INC. FAILED TO MAINTAIN CURRENT BOOKS AND RECORDS. TRIADADVISORS, INC. AGREED TO PAY AN ADMINISTRATIVE FINE OF $7,500.


No

Sanctions Ordered: Monetary/Fine $7,500.00

Order


Initiated By: STATE OF FLORIDA OFFICE OF FINANCIAL REGULATION


Docket/Case Number: ADMINISTRATIVE PROCEEDING NUMBER: 0371-S-7/13 ; 0371A-S-7/13



Allegations: VIOLATION OF RULE 69W-600.014(1), FLORIDA ADMINISTRATIVE CODE, ANDSEC RULES 17A-3 AND 17A-4 IN THAT: THE FLORIDA BRANCH FAILED TOMAINTAIN A CHECKS RECEIVED BLOTTER, TRIAD FAILED TO MAINTAIN ACOPY OF THE APPROVAL OF THE BRANCH'S STATIONARY; TRIAD FAILEDTO MAINTAIN A RECORD OF ANY ADDITIONAL REVIEW OF THEREPRESENTATIVE'S OBA.












Resolution:


Sanction Details: FIRM FINED: $7,500. REP FINED: $2,500. FINE REMITTED JULY 10, 2015.

Firm Statement THE FLORIDA BRANCH FAILED TO MAINTAIN A CHECKS RECEIVEDBLOTTER; TRIAD FAILED TO MAINTAIN A COPY OF THE APPROVAL OF THEBRANCH'S STATIONARY; TRIAD FAILED TO MAINTAIN A RECORD OF ANYADDITIONAL REVIEW OF THE REPRESENTATIVE'S OBA.

Sanctions Ordered: Monetary/Fine $7,500.00Cease and Desist/Injunction

Stipulation and Consent

Disclosure 5 of 8

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Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOESTABLISH, MAINTAIN AND ENFORCE AN ADEQUATE SUPERVISORYSYSTEM AND WRITTEN PROCEDURES THAT WERE REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIESLAWS AND REGULATIONS AND NASD AND FINRA RULES, REGARDING THEUSE OF CONSOLIDATED REPORTS INCLUDING A SYSTEM USED BY ITSREPRESENTATIVES AND EXAMINATIONS OF ITS BRANCH OFFICES. THEFINDINGS STATED THAT THE FIRM HAD INADEQUATE SUPERVISORYPROCEDURES TO ADDRESS CUSTOMIZABLE REPORTS OR STRICTLYMANUALLY CREATED CONSOLIDATED REPORTS AND HAD NO SPECIFICPROCEDURE TO REVIEW AND CAPTURE CONSOLIDATED REPORTSCREATED AND PROVIDED BY ITS REPRESENTATIVES TO CUSTOMERSOTHER THAN CORRESPONDENCE REVIEW AND BRANCH EXAMINATIONS.THE FIRM'S SUPERVISORY SYSTEM FAILED TO DETECT CONSOLIDATEDREPORTS PROVIDED BY TWO FORMER REPRESENTATIVES THATCONTAINED FALSE ASSETS THAT WERE MANUALLY ENTERED. THE FIRM'SWRITTEN SUPERVISORY PROCEDURES (WSPS) REQUIRED A SPECIFICDISCLOSURE BE DISPLAYED ON OUTGOING CORRESPONDENCE BUT THEFIRM FAILED TO ADEQUATELY ENFORCE ITS PROCEDURES TO ENSURETHAT REQUIRED DISCLOSURES WERE INCLUDED ON ALLCORRESPONDENCE, INCLUDING CONSOLIDATED REPORTS. THEREQUIRED DISCLOSURE FAILED TO ADHERE TO BEST PRACTICESREGARDING DISCLOSURES ON CONSOLIDATED REPORTS SUGGESTED INFINRA REGULATORY NOTICE 10-19 AND THE FIRM FAILED TO MODIFY THEREQUIRED DISCLOSURE UNTIL IT FIRST ESTABLISHED WSPS DIRECTLYRELATING TO CONSOLIDATED REPORTS. THE FIRM'S BRANCH AUDITPROGRAM WAS DEFICIENT AND THE DEFICIENCIES CONTRIBUTED TO THEFIRM'S INABILITY TO DISCOVER A REPRESENTATIVE'S (NOW DECEASED)SALE OF FICTITIOUS PROMISSORY NOTES TO CUSTOMERS, OUTSIDE THEREGULAR COURSE AND SCOPE OF THE REPRESENTATIVE'S ASSOCIATIONWITH THE FIRM. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TOREASONABLY SUPERVISE ITS REPRESENTATIVES TO ENSURECOMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONSAND NASD AND FINRA RULES. THE FIRM FAILED TO REASONABLYSUPERVISE TWO FORMER REPRESENTATIVES, ONE OF WHICH SOLDPROMISSORY NOTES OUTSIDE THE REGULAR COURSE OF THEREPRESENTATIVE'S ASSOCIATION WITH THE FIRM AND THE OTHERCONVERTED CUSTOMER FUNDS. THE FIRM AND ITS BRANCH AUDITORSFAILED TO DETECT AND INVESTIGATE THE SALE OF PROMISSORY NOTESBY ONE OF ITS REPRESENTATIVE AND THE FIRM FAILED TO DETECT ANDINVESTIGATE MANUAL ENTRIES INTO A SYSTEM, WHICH INCLUDED FALSEASSETS AND FALSE COMMITTEE ON UNIFORMSECURITIES IDENTIFICATION PROCEDURES (CUSIP) NUMBERS, WHICHWERE ENTERED BY THE SAME REPRESENTATIVE. THE FIRM FAILED TOADEQUATELY FOLLOW-UP ON A DEFICIENCY FROM A BRANCH AUDIT THATREPORTED THAT ANOTHER REPRESENTATIVE, PRIOR TO HISTERMINATION, HAD SENT CORRESPONDENCE TO CUSTOMERS WITHOUTFORWARDING COPIES TO THE HOME OFFICE FOR REVIEW. THE FINDINGSALSO INCLUDED THAT THE FIRM'S SUPERVISORY CONTROLS REPORTFOR YEAR 2010 WAS DEFICIENT AND FAILED TO FOCUS ON AREAS OF THEFIRM'S PROCEDURES SUCH AS THE USE OF CONSOLIDATED REPORTS.THE NASD RULE 3012 REPORT FOR 2010 FURTHER FAILED TO DETAILCHANGES NEEDED TO BE MADE OR CHANGES THAT WERE MADE TOTHEIR SUPERVISORY POLICIES AND PROCEDURES REGARDINGCONSOLIDATED REPORTS. FINRA FOUND THAT THE FIRM CONDUCTED ASECURITIES BUSINESS WHILE FAILING TO MAINTAIN ITS REQUIREDMINIMUM NET CAPITAL, CREATED AND MAINTAINED INACCURATE BOOKSAND RECORDS IN THAT THE FIRM FAILED TO MAINTAIN ACCURATECOMPUTATIONS OF ITS NET CAPITAL, FILED INACCURATE FINANCIAL ANDOPERATIONAL COMBINED UNIFORM SINGLE (FOCUS) REPORTS, AND DIDNOT TIMELY FILE SECURITIES EXCHANGE ACT OF 1934 RULE 17A-11NOTIFICATIONS REGARDING THE NET CAPITAL DEFICIENCIES. FINRAALSO FOUND THAT THE FIRM FAILED TO REASONABLY ENFORCE ITSPROCEDURES TO ENSURE COMPLIANCE WITH REGULATION S-PREGARDING THE ENCRYPTION OF ELECTRONIC MESSAGES CONTAININGPERSONAL CONFIDENTIAL INFORMATION AND FAILED TO DISSEMINATEPRIVACY POLICY NOTICES ON AN ANNUAL BASIS AND ADVISE CUSTOMERSOF THE "OPT-OUT" PROVISION.







WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOESTABLISH, MAINTAIN AND ENFORCE AN ADEQUATE SUPERVISORYSYSTEM AND WRITTEN PROCEDURES THAT WERE REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIESLAWS AND REGULATIONS AND NASD AND FINRA RULES, REGARDING THEUSE OF CONSOLIDATED REPORTS INCLUDING A SYSTEM USED BY ITSREPRESENTATIVES AND EXAMINATIONS OF ITS BRANCH OFFICES. THEFINDINGS STATED THAT THE FIRM HAD INADEQUATE SUPERVISORYPROCEDURES TO ADDRESS CUSTOMIZABLE REPORTS OR STRICTLYMANUALLY CREATED CONSOLIDATED REPORTS AND HAD NO SPECIFICPROCEDURE TO REVIEW AND CAPTURE CONSOLIDATED REPORTSCREATED AND PROVIDED BY ITS REPRESENTATIVES TO CUSTOMERSOTHER THAN CORRESPONDENCE REVIEW AND BRANCH EXAMINATIONS.THE FIRM'S SUPERVISORY SYSTEM FAILED TO DETECT CONSOLIDATEDREPORTS PROVIDED BY TWO FORMER REPRESENTATIVES THATCONTAINED FALSE ASSETS THAT WERE MANUALLY ENTERED. THE FIRM'SWRITTEN SUPERVISORY PROCEDURES (WSPS) REQUIRED A SPECIFICDISCLOSURE BE DISPLAYED ON OUTGOING CORRESPONDENCE BUT THEFIRM FAILED TO ADEQUATELY ENFORCE ITS PROCEDURES TO ENSURETHAT REQUIRED DISCLOSURES WERE INCLUDED ON ALLCORRESPONDENCE, INCLUDING CONSOLIDATED REPORTS. THEREQUIRED DISCLOSURE FAILED TO ADHERE TO BEST PRACTICESREGARDING DISCLOSURES ON CONSOLIDATED REPORTS SUGGESTED INFINRA REGULATORY NOTICE 10-19 AND THE FIRM FAILED TO MODIFY THEREQUIRED DISCLOSURE UNTIL IT FIRST ESTABLISHED WSPS DIRECTLYRELATING TO CONSOLIDATED REPORTS. THE FIRM'S BRANCH AUDITPROGRAM WAS DEFICIENT AND THE DEFICIENCIES CONTRIBUTED TO THEFIRM'S INABILITY TO DISCOVER A REPRESENTATIVE'S (NOW DECEASED)SALE OF FICTITIOUS PROMISSORY NOTES TO CUSTOMERS, OUTSIDE THEREGULAR COURSE AND SCOPE OF THE REPRESENTATIVE'S ASSOCIATIONWITH THE FIRM. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TOREASONABLY SUPERVISE ITS REPRESENTATIVES TO ENSURECOMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONSAND NASD AND FINRA RULES. THE FIRM FAILED TO REASONABLYSUPERVISE TWO FORMER REPRESENTATIVES, ONE OF WHICH SOLDPROMISSORY NOTES OUTSIDE THE REGULAR COURSE OF THEREPRESENTATIVE'S ASSOCIATION WITH THE FIRM AND THE OTHERCONVERTED CUSTOMER FUNDS. THE FIRM AND ITS BRANCH AUDITORSFAILED TO DETECT AND INVESTIGATE THE SALE OF PROMISSORY NOTESBY ONE OF ITS REPRESENTATIVE AND THE FIRM FAILED TO DETECT ANDINVESTIGATE MANUAL ENTRIES INTO A SYSTEM, WHICH INCLUDED FALSEASSETS AND FALSE COMMITTEE ON UNIFORMSECURITIES IDENTIFICATION PROCEDURES (CUSIP) NUMBERS, WHICHWERE ENTERED BY THE SAME REPRESENTATIVE. THE FIRM FAILED TOADEQUATELY FOLLOW-UP ON A DEFICIENCY FROM A BRANCH AUDIT THATREPORTED THAT ANOTHER REPRESENTATIVE, PRIOR TO HISTERMINATION, HAD SENT CORRESPONDENCE TO CUSTOMERS WITHOUTFORWARDING COPIES TO THE HOME OFFICE FOR REVIEW. THE FINDINGSALSO INCLUDED THAT THE FIRM'S SUPERVISORY CONTROLS REPORTFOR YEAR 2010 WAS DEFICIENT AND FAILED TO FOCUS ON AREAS OF THEFIRM'S PROCEDURES SUCH AS THE USE OF CONSOLIDATED REPORTS.THE NASD RULE 3012 REPORT FOR 2010 FURTHER FAILED TO DETAILCHANGES NEEDED TO BE MADE OR CHANGES THAT WERE MADE TOTHEIR SUPERVISORY POLICIES AND PROCEDURES REGARDINGCONSOLIDATED REPORTS. FINRA FOUND THAT THE FIRM CONDUCTED ASECURITIES BUSINESS WHILE FAILING TO MAINTAIN ITS REQUIREDMINIMUM NET CAPITAL, CREATED AND MAINTAINED INACCURATE BOOKSAND RECORDS IN THAT THE FIRM FAILED TO MAINTAIN ACCURATECOMPUTATIONS OF ITS NET CAPITAL, FILED INACCURATE FINANCIAL ANDOPERATIONAL COMBINED UNIFORM SINGLE (FOCUS) REPORTS, AND DIDNOT TIMELY FILE SECURITIES EXCHANGE ACT OF 1934 RULE 17A-11NOTIFICATIONS REGARDING THE NET CAPITAL DEFICIENCIES. FINRAALSO FOUND THAT THE FIRM FAILED TO REASONABLY ENFORCE ITSPROCEDURES TO ENSURE COMPLIANCE WITH REGULATION S-PREGARDING THE ENCRYPTION OF ELECTRONIC MESSAGES CONTAININGPERSONAL CONFIDENTIAL INFORMATION AND FAILED TO DISSEMINATEPRIVACY POLICY NOTICES ON AN ANNUAL BASIS AND ADVISE CUSTOMERSOF THE "OPT-OUT" PROVISION.






Initiated By: FINRA







WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOESTABLISH, MAINTAIN AND ENFORCE AN ADEQUATE SUPERVISORYSYSTEM AND WRITTEN PROCEDURES THAT WERE REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIESLAWS AND REGULATIONS AND NASD AND FINRA RULES, REGARDING THEUSE OF CONSOLIDATED REPORTS INCLUDING A SYSTEM USED BY ITSREPRESENTATIVES AND EXAMINATIONS OF ITS BRANCH OFFICES. THEFINDINGS STATED THAT THE FIRM HAD INADEQUATE SUPERVISORYPROCEDURES TO ADDRESS CUSTOMIZABLE REPORTS OR STRICTLYMANUALLY CREATED CONSOLIDATED REPORTS AND HAD NO SPECIFICPROCEDURE TO REVIEW AND CAPTURE CONSOLIDATED REPORTSCREATED AND PROVIDED BY ITS REPRESENTATIVES TO CUSTOMERSOTHER THAN CORRESPONDENCE REVIEW AND BRANCH EXAMINATIONS.THE FIRM'S SUPERVISORY SYSTEM FAILED TO DETECT CONSOLIDATEDREPORTS PROVIDED BY TWO FORMER REPRESENTATIVES THATCONTAINED FALSE ASSETS THAT WERE MANUALLY ENTERED. THE FIRM'SWRITTEN SUPERVISORY PROCEDURES (WSPS) REQUIRED A SPECIFICDISCLOSURE BE DISPLAYED ON OUTGOING CORRESPONDENCE BUT THEFIRM FAILED TO ADEQUATELY ENFORCE ITS PROCEDURES TO ENSURETHAT REQUIRED DISCLOSURES WERE INCLUDED ON ALLCORRESPONDENCE, INCLUDING CONSOLIDATED REPORTS. THEREQUIRED DISCLOSURE FAILED TO ADHERE TO BEST PRACTICESREGARDING DISCLOSURES ON CONSOLIDATED REPORTS SUGGESTED INFINRA REGULATORY NOTICE 10-19 AND THE FIRM FAILED TO MODIFY THEREQUIRED DISCLOSURE UNTIL IT FIRST ESTABLISHED WSPS DIRECTLYRELATING TO CONSOLIDATED REPORTS. THE FIRM'S BRANCH AUDITPROGRAM WAS DEFICIENT AND THE DEFICIENCIES CONTRIBUTED TO THEFIRM'S INABILITY TO DISCOVER A REPRESENTATIVE'S (NOW DECEASED)SALE OF FICTITIOUS PROMISSORY NOTES TO CUSTOMERS, OUTSIDE THEREGULAR COURSE AND SCOPE OF THE REPRESENTATIVE'S ASSOCIATIONWITH THE FIRM. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TOREASONABLY SUPERVISE ITS REPRESENTATIVES TO ENSURECOMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONSAND NASD AND FINRA RULES. THE FIRM FAILED TO REASONABLYSUPERVISE TWO FORMER REPRESENTATIVES, ONE OF WHICH SOLDPROMISSORY NOTES OUTSIDE THE REGULAR COURSE OF THEREPRESENTATIVE'S ASSOCIATION WITH THE FIRM AND THE OTHERCONVERTED CUSTOMER FUNDS. THE FIRM AND ITS BRANCH AUDITORSFAILED TO DETECT AND INVESTIGATE THE SALE OF PROMISSORY NOTESBY ONE OF ITS REPRESENTATIVE AND THE FIRM FAILED TO DETECT ANDINVESTIGATE MANUAL ENTRIES INTO A SYSTEM, WHICH INCLUDED FALSEASSETS AND FALSE COMMITTEE ON UNIFORMSECURITIES IDENTIFICATION PROCEDURES (CUSIP) NUMBERS, WHICHWERE ENTERED BY THE SAME REPRESENTATIVE. THE FIRM FAILED TOADEQUATELY FOLLOW-UP ON A DEFICIENCY FROM A BRANCH AUDIT THATREPORTED THAT ANOTHER REPRESENTATIVE, PRIOR TO HISTERMINATION, HAD SENT CORRESPONDENCE TO CUSTOMERS WITHOUTFORWARDING COPIES TO THE HOME OFFICE FOR REVIEW. THE FINDINGSALSO INCLUDED THAT THE FIRM'S SUPERVISORY CONTROLS REPORTFOR YEAR 2010 WAS DEFICIENT AND FAILED TO FOCUS ON AREAS OF THEFIRM'S PROCEDURES SUCH AS THE USE OF CONSOLIDATED REPORTS.THE NASD RULE 3012 REPORT FOR 2010 FURTHER FAILED TO DETAILCHANGES NEEDED TO BE MADE OR CHANGES THAT WERE MADE TOTHEIR SUPERVISORY POLICIES AND PROCEDURES REGARDINGCONSOLIDATED REPORTS. FINRA FOUND THAT THE FIRM CONDUCTED ASECURITIES BUSINESS WHILE FAILING TO MAINTAIN ITS REQUIREDMINIMUM NET CAPITAL, CREATED AND MAINTAINED INACCURATE BOOKSAND RECORDS IN THAT THE FIRM FAILED TO MAINTAIN ACCURATECOMPUTATIONS OF ITS NET CAPITAL, FILED INACCURATE FINANCIAL ANDOPERATIONAL COMBINED UNIFORM SINGLE (FOCUS) REPORTS, AND DIDNOT TIMELY FILE SECURITIES EXCHANGE ACT OF 1934 RULE 17A-11NOTIFICATIONS REGARDING THE NET CAPITAL DEFICIENCIES. FINRAALSO FOUND THAT THE FIRM FAILED TO REASONABLY ENFORCE ITSPROCEDURES TO ENSURE COMPLIANCE WITH REGULATION S-PREGARDING THE ENCRYPTION OF ELECTRONIC MESSAGES CONTAININGPERSONAL CONFIDENTIAL INFORMATION AND FAILED TO DISSEMINATEPRIVACY POLICY NOTICES ON AN ANNUAL BASIS AND ADVISE CUSTOMERSOF THE "OPT-OUT" PROVISION.


Resolution:

Other Sanctions Ordered: RESTITUTION MUST BE PAID TO CUSTOMERS IN THE AGGREGATEAMOUNT OF NO LESS THAN $375,000. UNDERTAKING: A REGISTEREDPRINCIPAL ON BEHALF OF THE FIRM SHALL CERTIFY TO FINRA IN WRITINGTHAT IT HAS CONDUCTED A COMPREHENSIVE REVIEW OF ITSSUPERVISORY SYSTEM REGARDING THE USE OF CONSOLIDATEDREPORTS BY ITS REPRESENTATIVES AS WELL AS ITS BRANCH AUDITPROCESS.

Sanction Details: SEE ABOVE. FINE PAID IN FULL ON 03/24/14.


No




Allegations: ON MARCH 12, 2014, TRIAD ENTERED INTO AN ACCEPTANCE, WAIVER, ANDCONSENT WITH FINRA CONCERNING CONSOLIDATED REPORTS, BRANCHAUDITS, SUPERVISION, NET CAPITAL, AND REGULATION S-P. TRIADCONSENTED TO A CENSURE, A $650,000 FINE, RESTITUTION TOCUSTOMERS TOTALING $375,000, AND A REVIEW AND REVISION TO ITSCONSOLIDATED REPORT AND BRANCH AUDIT PROCESSES.








Initiated By: FINANCIAL INDUSTRY REGULATORY AUTHORITY




CENSURE; RESTITUTION TO CUSTOMERS; REVIEW AND REVISION TOCONSOLIDATED REPORT AND BRANCH AUDIT PROCESSES





Allegations: ON MARCH 12, 2014, TRIAD ENTERED INTO AN ACCEPTANCE, WAIVER, ANDCONSENT WITH FINRA CONCERNING CONSOLIDATED REPORTS, BRANCHAUDITS, SUPERVISION, NET CAPITAL, AND REGULATION S-P. TRIADCONSENTED TO A CENSURE, A $650,000 FINE, RESTITUTION TOCUSTOMERS TOTALING $375,000, AND A REVIEW AND REVISION TO ITSCONSOLIDATED REPORT AND BRANCH AUDIT PROCESSES.


Resolution:


Sanction Details: 650,000.00 FINE375,000.00 RESTITUTION TO CUSTOMERS

TRIAD PAID THE REQUIRED AMOUNT ON MARCH 24, 2014.



Disclosure 6 of 8

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Initiated By: NASD


Allegations: NASD RULES 2110, 3010 AND 6230: RESPONDENT MEMBER FIRM FAILED TOTIMELY REPORT CORPORATE BOND TRADES. IN ADDITION, THE FIRMFAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM,INCLUDING WRITTEN SUPERVISORY PROCEDURES, REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH NASD RULE 6230.












Principal Product Type: Debt - Corporate



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, RESPONDENT MEMBERFIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE, FIRM IS CENSURED AND FINED $10,000.


No

Sanctions Ordered: CensureMonetary/Fine $10,000.00



Initiated By: NASD



Allegations: FROM 1/1/06 - 3/31/06, TRIAD FAILED TO REPORT 62 OF 100 CORPORATEBOND TRADES WITHIN THE TIME PERIOD PRESCRIBED BY NASD RULE6230, IN VIOLATION OF NASD RULES 2110 AND 3010. DURING THE SAMEPERIOD, TRIAD FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORYSYSTEM, INCLUDING WRITTEN SUPERVISORY PROCEDURES,REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RULE 6230, INVIOLATION OF RULES 2110 AND 3010.










Censure


Principal Product Type: Debt - Corporate



Resolution:


Sanction Details: FIRM HAS AGREED TO $10,000 FINE AND IS AWAITING INVOICE FROM NASDFINANCE.

Sanctions Ordered: CensureMonetary/Fine $10,000.00


Disclosure 7 of 8

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Initiated By: FLORIDA


Cease and Desist



Docket/Case Number: 3517-S-08/02




Allegations: UNREGISTERED BRANCH ACTIVITY.



Resolution:

Other Sanctions Ordered: NA








Other Sanctions Ordered: NA

Sanction Details: NA

Regulator Statement OPERATED BRANCHES WITHOUT THE BENEFIT OF REGISTRATION.UNREGISTERED ACTIVITY.


Initiated By: FLORIDA


Cease and Desist



Docket/Case Number: 3517-5-08/02



Allegations: UNREGISTERED BRANCH ACTIVITY



Resolution:


Sanction Details: N/A

Firm Statement OPERATED BRANCHES WITHOUT BENEFIT OF REGISTRATION.UNREGISTED ACTIVITY.



Disclosure 8 of 8

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Allegations: THE BROKER-DEALER VIOLATED RULE 307 OF THE VASECURITIES ACT IN THAT IT FAILED TO NOTIFY THE DIVISION INWRITING WITHIN THREE BUSINESS THAT ITS NET WORTH DROPPEDBELOW$25,000 AND FAILED TO TAKE IMMEDIATE ACTION TO ESTABLISH A$25,000 NET WORTH.







Initiated By: VIRGINIA DIVISION OF SECURITIES AND RETAILFRANCHISING




Docket/Case Number: SEC910062


Principal Product Type:


THE BROKER-DEALER VIOLATED RULE 307 OF THE VASECURITIES ACT IN THAT IT FAILED TO NOTIFY THE DIVISION INWRITING WITHIN THREE BUSINESS THAT ITS NET WORTH DROPPEDBELOW$25,000 AND FAILED TO TAKE IMMEDIATE ACTION TO ESTABLISH A$25,000 NET WORTH.


Resolution:


Sanction Details: AS AN OFFER TO SETTLE ALL MATTERS AND WITHOUTADMITTING OR DENYING GUILT, THE BROKER-DEALER AGREES TOCOMPLYWITH RULE 307 AND PAID TO THE COMMONWEALTH OF VIRGINIA APENALTY IN THE AMOUNT OF $500.00.

Regulator Statement FOR FURTHER INFORMATION, CONTACT SHERYL DEVAUN,REGISTRATION EXAMINER, (804) 786-7751.

Sanctions Ordered: Monetary/Fine $500.00

Consent


Initiated By: STATE OF VIRGINIA


Docket/Case Number:


Allegations: FAILED TO NOTIFY VIRGINIA OF A NET WORTH BELOW $25,000 (AS IMBSECURITIES, INC.)













Resolution:

Other Sanctions Ordered: $25,000.00 SURETY BOND FILED.

Sanction Details: FINE OF $500.00 FILED AND $25,000.00 SURETY BOND FILED. BOTH WEREACCEPTED AS SETTLEMENT IN FULL.

Sanctions Ordered: Monetary/Fine $500.00

Settled






Arbitration Award - Award / Judgment

Brokerage firms are not required to report arbitration claims filed against them by customers; however, BrokerCheckprovides summary information regarding FINRA arbitration awards involving securities and commodities disputesbetween public customers and registered securities firms in this section of the report. The full text of arbitration awards issued by FINRA is available at www.finra.org/awardsonline.

Disclosure 1 of 5


Type of Event: ARBITRATION

Arbitration Forum:

Case Initiated:

Case Number:

Allegations:

Disputed Product Type:

Sum of All Relief Requested:

Disposition:

Disposition Date:

Sum of All Relief Awarded:

NASD

01/11/2002

01-06687

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNTRELATED-NEGLIGENCE

NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OF SECURITIES

$103,000.00

AWARD AGAINST PARTY

02/20/2003

$103,000.00

There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.

Disclosure 2 of 5

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Arbitration Forum:

Case Initiated:

Case Number:

Allegations:


NASD

01/20/2005

05-00233

ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-NEGLIGENCE; NOOTHER CONTROVERSY INVOLVED

NO OTHER TYPE OF SEC INVOLVE; GINNIE MAES; MUNICIPAL BONDS;OTHER TYPES OF SECURITIES





www.finra.org/awardsonline

https://www.finra.org/arbitration-mediation/arbitration-awards-online?search=01-06687





Disposition:

Disposition Date:


NO OTHER TYPE OF SEC INVOLVE; GINNIE MAES; MUNICIPAL BONDS;OTHER TYPES OF SECURITIES

$250,000.00

AWARD AGAINST PARTY

02/07/2006

$30,340.80


Disclosure 3 of 5

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Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


FINRA

12/15/2010

10-05167

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT RELATED-BREACH OF CONTRACT;ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNT RELATED-NEGLIGENCE

$625,000.00

AWARD AGAINST PARTY - VACATED IN WHOLE OR PART

05/17/2012

$250,300.02


Disclosure 4 of 5

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Allegations: ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-OTHER; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTRELATED-BREACH OF CONTRACT; ACCOUNT RELATED-FAILURE TOSUPERVISE; ACCOUNT RELATED-NEGLIGENCE







Arbitration Forum:

Case Initiated:

Case Number:



Disposition:

Disposition Date:


FINRA

03/22/2011

11-01043

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-OTHER; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTRELATED-BREACH OF CONTRACT; ACCOUNT RELATED-FAILURE TOSUPERVISE; ACCOUNT RELATED-NEGLIGENCE

MUTUAL FUNDS; VARIABLE ANNUITIES

$16,419,748.00

AWARD AGAINST PARTY

07/16/2012

$260,147.33


Disclosure 5 of 5

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Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


FINRA

12/23/2020

20-04151

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-OTHER; ACCOUNT ACTIVITY-VIOLATE OF BLUE SKYLWS; ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNT RELATED-NEGLIGENCE

BUSINESS DEVELOPMENT COMPANY (BDCS)

$71,685.00

AWARD AGAINST PARTY

10/06/2021

$65,000.00









End of Report

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