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.

Stuart Gregory Burchard (Principal)
OS/2008011656401

Acting through Burchard, his Firm failed to

• prepare accurate general ledgers and trial balances;
• prepare accurate computations of net capital under the aggregated indebtedness standard while conducting a securities business;
• maintain or meet its minimum net capital requirement, failed to notify FINRA when its net capital declined below the minimum required under SEC Rule 15c3-1;
• prepare and file FOCUS Reports Part IIA for several calendar quarters;
• comply with the terms of its membership agreement when it acted as a dealer after executing more than 10 proprietary trades in its account during a calendar year, thereby increasing its minimum net capital requirement from $5,000 to $100,000;
• file an application for approval of a material change in its business operations as originally provided in its membership agreement;
• report customer complaints, which were discloseable events, within 10 business days and statistical and summary information of customer complaints the firm received on a quarterly basis;
• timely amend Forms U4 to disclose settlements;
• timely report settlements, arbitration awards and a default judgment that were required to be disclosed;
• develop, establish and implement an adequate AML compliance program;
• conduct and/or document adequate independent testing of its AML compliance program and procedures;
• establish procedures to ensure the designation of an AML Compliance Officer to NASD;
• NASD of any changes in contact information for its AML Compliance Officer in a reasonable amount of time and failed to implement and adequate AML training program;
• establish and implement an adequate Customer Identification Program;
• evidence that a due diligence review was performed to review the identities or beneficial owners of accounts of foreign financial institutions;
• establish adequate procedures designed to monitor, detect and investigate suspicious activity despite the presence of red flags noted in the firm’s procedures;
• prepare and maintain exception reports produced to review for unusual activity in accounts; failed to evidence due diligence in opening accounts of foreign financial institutions;
• monitor and respond to requests for information from FinCEN; and
• establish and implement policies, procedures and internal controls reasonably designed to achieve compliance with the Bank Secrecy Act, including failure to implement policies and procedures designed to detect and report suspicious activity and to verify the identity of customers.

Burchard failed to reasonably supervise the activities of a registered representative and registered principal to ensure that she performed the supervisory responsibilities Burchard delegated to her.

Stuart Gregory Burchard (Principal): Barred

Tags: Net Capital  FOCUS  AML  CIP