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