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.
Kenneth William Gneuhs (Principal)
AWC/2010022715606
Gneuhs
failed to enforce his member
firm’s WSPs and failed to
effectively supervise the activities of firm associated persons
over whom he had supervisory
responsibility.
Gneuhs failed to
enforce the firm’s WSPs
regarding the handling of PPM, subscription documents and investor
funds for private
placement offerings his firm sold, and failed to effectively
supervise the associated persons’
handling of such documents. Gneuhs did not prevent the associated
persons from sending
subscription documents directly to the private placement issuer,
which precluded the firm
from conducting adequate oversight or review of the transactions
and from retaining
transaction-related documents. Gneuhs failed to review the
firm’s private placement sales for suitability, and typically did
not review or approve private
placement transactions effected by the associated persons he
supervised.
Gneuhs failed to enforce the firm’s WSPs and failed
to effectively supervise
the associated persons’ use of non-firm email for securities
business. Gneuhs was aware of,
and did not prevent, the associated persons from using personal
email accounts to conduct
securities business. The use of non-firm email accounts prevented
the firm’s compliance
staff from reviewing the associated persons’ customer
communications, and the firm was
unable to retain securities-related communications.
Kenneth William Gneuhs (Principal): In light of Gneuhs' financial status, no fine; Suspended in Principal capacity only for 20 business days.