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.

David Eric Niederkrome (Principal) and Stephen Rudolph Rodgers (Principal)
AWC/2008016403302

Niederkrome authorized an associated person’s participation in private securities transactions primarily involving the sales of hedge fund interests to investors, but failed to supervise the sales for suitability, or to review and retain monthly performance statements that were sent to hedge fund investors as required by NASD Rule 3040.

Niederkrome and Rodgers, as principals responsible for the review and approval of all new account applications, approved the opening of the accounts for prospective hedge fund investors without inquiring into whether the intended investment was actually suitable for them.

David Eric Niederkrome: Fined $15,000; Suspended 6 months in Principal capacity only

Stephen Rudolph Rodgers: Fined $5,000; Suspended 60 days in Principal capacity only