SIDE BAR: FINRA Conduct Rule 1021: Registration Requirements(a) All Principals Must Be RegisteredAll persons engaged or to be engaged in the investment banking or securities business of a member who are to function as principals shall be registered as such with NASD in the category of registration appropriate to the function to be performed as specified in Rule 1022. Before their registration can become effective, they shall pass a Qualification Examination for Principals appropriate to the category of registration as specified by the Board of Governors. A member shall not maintain a principal registration with NASD for any person (1) who is no longer active in the member's investment banking or securities business, (2) who is no longer functioning as a principal, or (3) where the sole purpose is to avoid the examination requirement prescribed in paragraph (c). A member shall not make application for the registration of any person as principal where there is no intent to employ such person in the member's investment banking or securities business. A member may, however, maintain or make application for the registration as a principal of a person who performs legal, compliance, internal audit, back-office operations, or similar responsibilities for the member or a person engaged in the investment banking or securities business of a foreign securities affiliate or subsidiary of the member.(b) Definition of PrincipalPersons associated with a member, enumerated in subparagraphs (1) through (5) hereafter, who are actively engaged in the management of the member's investment banking or securities business, including supervision, solicitation, conduct of business or the training of persons associated with a member for any of these functions are designated as principals. Such persons shall include:(1) Sole Proprietors(2) Officers(3) Partners(4) Managers of Offices of Supervisory Jurisdiction, and(5) Directors of Corporations.(c) Requirements for Examination on Lapse of RegistrationAny person whose registration has been revoked pursuant to Rule 8310 or whose most recent registration as a principal has been terminated for a period of two or more years immediately preceding the date of receipt by the Association of a new application shall be required to pass a Qualification Examination for Principals appropriate to the category of registration as specified in Rule 1022 hereof.(d) Application for Principal Status(1) Any person associated with a member as a Registered Representative whose duties are changed by the member so as to require registration in any principal classification shall be allowed a period of 90 calendar days following the change in his duties during which to pass the appropriate Qualification Examination for Principals. Upon elevation, the member shall submit to NASD an amended "Uniform Application for Securities Industry Registration or Transfer" and the applicable fees. In no event may a person function as a Principal beyond the initial 90 calendar day period following the change in his duties without having successfully passed the appropriate Qualification Examination.(2) Any person not presently associated with a member as a Registered Representative seeking registration as a Principal shall submit the appropriate application for registration and the required registration and examination fees. Such person shall be allowed a period of ninety days after all applicable prerequisites are fulfilled to pass the appropriate Qualification Examination for Principals. In no event may a person previously unregistered in any capacity applying for principal status function as a Principal until fully qualified.(e) Requirement of Two Registered Principals for Members(1) An NASD member, except a sole proprietorship, shall have at least two officers or partners who are registered as principals with respect to each aspect of the member's investment banking and securities business pursuant to the applicable provisions of Rule 1022. This requirement applies to persons seeking admission as members and existing members.(2) Pursuant to the Rule 9600 Series, The Association may waive the provisions of subparagraph (1) in situations that indicate conclusively that only one person associated with an applicant for membership should be required to register as a principal.(3) In addition to the provisions of subparagraph (1) above, an applicant for membership, if the nature of its business so requires, shall have at least one person qualified for registration pursuant to Rule 1022(b), (c) and (f).
[W]ith the firm's knowledge, the general securities representative functioned as a principal by, among other things. identifying himself as the firm's president, being involved in decisions regarding the employment status of other registered representatives at the firm, and being involved in the distribution of sales bonuses to two registered representatives . . .
Triton Pacific may attach a Corrective Action Statement to this AWC that is a statement of demonstrable corrective steps taken to prevent future misconduct. Triton Pacific understands that it may not deny the charges or make any statement that is inconsistent with the AWC in this Statement This Statement does not constitute factual or legal findings by FINRA, nor does it reflect the views of FINRA or its staff.
Respondents in a settled disciplinary action may submit a Corrective Action Statement and/or a Mitigation Statement to NASD Regulation. This article clarifies the NASD policies regarding such Statements.A Letter of Acceptance, Waiver and Consent (AWC) permits a respondent in an NASD Regulation disciplinary action to settle the matter prior to the filing of a formal complaint. A Corrective Action Statement may be attached to the AWC, which is filed with the SEC and available to the public, provided such statement is: (1) limited to demonstrable steps taken to correct a problem associated with the disciplinary action; (2) generally no longer than 2-3 pages; and (3) contains the following legend:
This Corrective Action Statement is submitted by the Respondent. It does not constitute factual or legal findings by NASD Regulation, Inc., nor does it reflect the views of NASD Regulation, Inc., or its staff.
Separately, respondents may submit a Mitigation Statement for consideration by NASD Regulation and the National Adjudicatory Council. Generally, such Statements are used to describe mitigating circumstances surrounding the violation for the decision maker to consider in its review of the terms of a settlement. Unlike Corrective Action Statements, Mitigation Statements are not attached to the AWC or public order.Respondents may also settle a matter after the complaint is filed by submitting an Offer of Settlement. While both Corrective Action and Mitigation Statements may be submitted to NASD Regulation in connection with Offers of Settlements, these Statements are not attached to the final Order Accepting the Offer of Settlement, which is filed with the SEC and available to the public.NASD Regulation will not accept Corrective Action or Mitigation Statements that deny the allegations or are inconsistent with the findings in the settlement. . .
So . . . lemme see if I got this. Triton Securities LLC's voluntary Corrective Action Statement asserts (now as a matter of written record) that the registration mess was the former compliance officer's fault and a similar miscue will likely not happen again because the replacement compliance officer is more informed. Okay . . . y'all better hope that this doesn't happen again or in similar fashion because you've sort of assured FINRA that you figured out what went wrong and have fixed it. As to the lovely comment about how the unregistered individual got his principal registration after being removed as the firm's President, frankly, that's like running over someone with your car, killing them as a result, and then hoping that by backing up over the dead body you can undo the damage.STATEMENT OF CORRECTIVE ACTIONOF TRITON PACIFIC SECURITIES, LLC
SUBMITTED TO FINRAThis Corrective Action Statement is submitted by Triton Pacific Securities, LLC ("TPS" or "the firm") in connection with the Letter of Acceptance, Waiver and Consent ("AWC"). The AWC alleges, among other things, that TPS permitted an individual registered through the firm as a general securities representative to function as a principal of the firm even though the individual did not hold any principal registrations. As a corrective measure, TPS terminated its relationship with its former compliance officer and has hired a new compliance officer that it believes will be more informed with respect to the various rules and regulations governing the conduct of the firm's business, to avoid issues such as those raised in the AWC. Additionally, the individual in question obtained his principal registration shortly after being removed as president and relieved of his responsibilities that gave rise to the allegations in the AWC.This Corrective Action Statement does not constitute factual or legal findings by FINRA, nor does it reflect the views of FINRA, or its staff.