Enforcement Actions
Financial Industry Regulatory Authority (FINRA)
CASES OF NOTE
2010
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.
July 2010
Greg Scott Schaefer (Principal)
2008012034701/July 2010

Acting as his firmís Anti-Money Laundering Compliance Officer (AMLCO), Schaefer failed to ensure the implementation of independent tests of the firmís AML compliance programs. Schaefer did not use an independent third party to conduct the firmís AML tests; rather, he drafted reports and presented them to an unqualified administrative assistant, who signed off on the reports without conducting any AML testing. Schaefer created and submitted inaccurate substitute compliance meeting attendance lists to FINRA staff during the course of FINRAís examination of Schaeferís firm and without telling FINRA staff that the sheets were recreations.

Schaefer failed to timely submit the administrative assistantís fingerprints to CRD, even though the individual had access to the firmís books and records, maintained the firmís check book and possessed an ink stamp of Schaeferís signature, which he used to sign firm checks. Schaefer failed to ensure that his firm established, maintained and enforced written supervisory control policies and procedures, and failed to ensure that an employeeís fingerprints were submitted to CRD, thereby causing his firm to violate Section 17(f)(2) of the Securities Exchange Act of 1934 and Rule 17f-2 thereunder.

Greg Scott Schaefer (Principal): Fined $42,500; Suspended 1 year
Tags:  AML    Fingerprints     |    In: Cases of Note : FINRA
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