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.
Jeffrey Alan Smith (Principal)
AWC/2010022715605
Smith failed to enforce his member firm’s WSPs and failed to effectively
supervise the activities
of the firm’s associated persons over whom he had supervisory
responsibility to ensure
that they were complying with FINRA rules and federal securities
laws and regulations.
Smith failed to
- enforce the firm’s WSPs
regarding the handling of PPM,
subscription documents, and investor funds for private placement
offerings sold by the
firm;
- effectively supervise the associated persons’
handling of such documents
so that he did not prevent the associated persons from sending
subscription documents
directly to the private placement issuer, precluding the firm from
conducting adequate
oversight or review of the transactions and from retaining
transaction-related documents;
- 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; and
- enforce the firm’s WSPs and failed to effectively supervise their
use of non-firm email
for securities business.
Smith 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.
Jeffrey Alan Smith (Principal): In light of financial status, no fine; Suspended in Principal capacity only for 20 business days