Statutory Disqualification Index
SEC and FINRA
CASES OF NOTE
SD09-34-60133
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 Application of
Financial Industry Regulatory Authority, Inc.
For an Order Granting the Approval of
Sean P. Brennan
As an Associated Person With Trinity Distributors, LLC Securities Exchange Act of 1934 : Section 15A(g)(2)

34-60133 (June 17, 2009)

SEC ORDER APPROVING APPLICATION FOR RELIEF FROM A STATUTORY DISQUALIFICATION
34-60133 (June 17, 2009)

The Commission's Division of Trading and Markets, pursuant to delegated authority, has reviewed the instant Application and the record before FINRA. Relying on the representations made by FINRA and Trinity concerning the proposed association of Mr.Brennan, and the Division of Trading and Markets has concluded that it is appropriate for the Commission to APPROVE the Application permitting Mr. Brennan to associate with Trinity as an associated, but not registered, person subject to the conditions of this order.

Filed Under: Willfulness, Non-Registered Affiliation
SD Event
On December 23, 1998, the Commission issued an Order Making Findings, Imposing Remedial Sanctions and Cease-and-Desist Order (ďBar OrderĒ) fining Mr. Brennan $50,000 and barring him from associating with any broker, dealer, investment adviser, or investment company, with the right to reapply after five years.In the Bar Order, the Commission found that Mr. Brennan willfully violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and willfully aided and abetted violations of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. Generally, the Commission found that Mr. Brennan, while associated with an investment adviser affiliate of CS First Boston, Inc., a registered broker-dealer, as the affiliateís vice president for sales and marketing, engaged in fraudulent conduct with respect to the offering of the CS First Boston Offshore Cash Reserve Fund, made material misrepresentations to an investor and other potential investors about the fund, and distributed false and misleading marketing materials. 

The Bar Order subjects Mr. Brennan to a statutory disqualification under Section 3(a)(39)(B)(i)(II) of the Exchange Act (Barred by Commission).

Sentence Expiration
N/A
Prior Industry Activity
Mr. Brennan first registered in the securities industry as an investment company and variable contracts products limited representative (Series 6) in December 1990. He re-qualified for the Series 6 in January 2005. He also qualified as a uniform securities agent state law (Series 63) in March 1991 and re-qualified in February 2005. Mr. Brennan was associated with a total of seven broker-dealers, including CS First Boston, Inc., from 1985 until 1998.
Background
Trinity proposes to employ Mr. Brennan in a non-registered capacity to act as a consultant to broker-dealers and other financial services institutions with respect to developing exchange-traded funds (ďETFsĒ). Mr. Brennan will not have any involvement in securities sales activities, including the marketing of any ETFs that he develops
Sponsoring Firm
Trinity, headquartered in Mequon, Wisconsin, became a FINRA member in September 2000. Trinity employs 1 registered principal and 1 registered representative, and acts as a mutual fund retailer and engages in ďsolicitation activities with respect to separately managed accounts, mutual funds, private investment funds, and other collective investment vehicles.Ē 
Proposed Activity
Trinity proposes to employ Mr. Brennan in a non-registered capacity to act as a consultant to broker-dealers and other financial services institutions with respect to developing exchange-traded funds (ďETFsĒ). Mr. Brennan will not have any involvement in securities sales activities, including the marketing of any ETFs that he develops

Mr. Brennanís activities will consist 

(A) consulting with clients regarding the strategic development of a product, including selecting the product niche (e.g., fixed income, equity, sub-advised products, and wrap products). For sub-advised products, Mr. Brennan will consult regarding selection of a "sub-adviser" to assist the ETF sponsor in developing the ETFsí investment strategy; 

(B) assisting with the retention of key service providers, including requests for proposals from potential legal counsel, administrators, custodians, specialist firms, and any other necessary vendors; and

(C) working with clients and their legal counsel to prepare registration statements or other regulatory filings, to obtain all necessary regulatory approvals, and to request any necessary exemptions. Mr. Brennan will be compensated by a percentage of the fees received from the client, and his compensation will not be contingent upon any ETF sales.

Mr. Brennan will act only in an associated capacity and will not be a registered representative of the Firm. Mr. Brennan will not accept any customer funds or securities, and will not supervise any Trinity employees.

Mr. Brennan will be based out of his home in Merrimac, Massachusetts, and will be supervised by Kirt Bjork, the Firmís president. Trinity will amend its supervisory procedures to clearly specify that Mr. Bjork is the responsible supervisor for Mr. Brennan.

Proposed Supervisor
Mr. Brennan will be based out of his home in Merrimac, Massachusetts, and will be supervised by Kirt Bjork, the Firmís president. Trinity will amend its supervisory procedures to clearly specify that Mr. Bjork is the responsible supervisor for Mr. Brennan.
Member Regulation Recommendation
N/A
Considerations

PLAN OF SUPERVISION

  1. Mr. Brennan will conduct all of his client communications via Trinity-issued electronics, including, but not limited to, cell phones, facsimile machines, and computers.
  2. Mr. Bjork will have access to Mr. Brennanís work calendar, and Mr. Brennan will inform Mr. Bjork of the date, time, and location of all of Mr. Brennanís outside client appointments. Mr. Brennan will be responsible for entering all meetings into his meeting calendar to ensure that Mr. Bjork is aware of them when reviewing the work calendar. Mr. Brennan will keep a log of all of the meetings that he enters on his calendar for ease of review.
  3. Mr. Brennan will have a dedicated phone line. Mr. Bjork will have access to Mr. Brennanís phone at all times, and Mr. Brennanís line will be accessible from Mr. Bjorkís phone. Mr. Bjork will have the ability to listen in on Mr. Brennanís calls at any time by picking up the phone. When Mr. Brennanís phone rings, Mr. Bjork will be alerted and have the ability to listen to the entire call. For audit and compliance purposes, Mr. Bjork will randomly listen in on Mr. Brennanís phone line at least twice a week, throughout an entire conversation. If Mr. Bjork finds that any aspect of the call is not in compliance with Mr. Brennanís stated duties, Mr. Bjork will discuss the issue with Mr. Brennan immediately, maintain a record of this discussion, and present that record to a FINRA examiner during the next statutory disqualification examination of Mr. Brennan. Mr. Bjork will maintain a log of Mr. Brennanís telephone calls, review it on a monthly basis to ensure that Mr. Brennanís calls are in compliance with his stated responsibilities, and keep the log segregated for ease of review.
  4. All of Mr. Brennanís incoming paper correspondence will be received by Mr. Bjork, at the Firmís home office. Mr. Bjork will review and approve all of this correspondence upon its arrival, and forward it to Mr. Brennan. Mr. Bjork will also review all of Mr. Brennanís outgoing paper correspondence before it is sent. Mr. Brennan will keep a record of all of his outgoing paper correspondence and will keep a copy for ease of review. Mr. Bjork will keep a written record evidencing his review of all of Mr. Brennanís paper correspondence.
  5. For the purposes of client communication, Mr. Brennan will only be allowed to use an e-mail account that is held at the Firm. Mr. Bjork will have immediate access to all e-mail communications on Mr. Brennanís Firm e-mail account that are either sent to or received by Mr. Brennan. If Mr. Brennan receives a business related e-mail message in another e-mail account outside the Firm, he will immediately deliver that message to the Firmís e-mail account. Mr. Brennan will also inform the Firm of all outside e-mail accounts that he maintains. Mr. Bjork will conduct a weekly review of all e-mail messages that are either sent or received by Mr. Brennan, will preserve the e-mail messages in electronic format, and keep them segregated for ease of review.
  6. Mr. Bjork will review, approve, and execute all of Mr. Brennanís client agreements. To evidence review, Mr. Bjork will make copies of the agreements, initial them, and keep the copies segregated for ease of review.
  7. If Mr. Bjork is to be on vacation or out of the office for more than one week, he will call Mr. Brennan at least once during the second week. Mr. Brennan will not be permitted to negotiate any client agreements in Mr. Bjorkís absence, unless Mr. Bjork is able to review and approve the agreement remotely. If Mr. Bjork is in a position to review the agreement remotely, he will preserve a copy of the agreement with his initials and keep it segregated for ease of review. Mr. Brennan will not send any written correspondence in Mr. Bjorkís absence, without Mr. Bjorkís review and approval. No correspondence that is received by the Firm during Mr. Bjorkís absence will be forwarded to Mr. Brennan.
  8. Mr. Bjork must certify quarterly (March 31, June 30, September 30, and December 31) to FINRAís Department of Member Regulation that he and Mr. Brennan are in compliance with all of the conditions of heightened supervision to be accorded Mr. Brennan.
Citations
N/A
 
Sections
Enforcement Actions
 
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