BGM has no relevant disciplinary history with the Securities and Exchange Commission, FINRA, any other self-regulatory organization or any state securities regulator.
Insurance claims which, after seven (7) business days from the date the loss giving rise to the claim is discovered, are not covered by an opinion of outside counsel that the claim is valid and is covered by insurance policies presently in effect; insurance claims which after twenty (20) business days from the date the loss giving rise to the claim is discovered and which are accompanied by an opinion of outside counsel described above, have not been acknowledged in writing by the insurance carrier as due and payable; and insurance claims acknowledged in writing by the carrier as due and payable outstanding longer than twenty (20) business days from the date they are so acknowledged by the carrier; and . . ./01 Insurance Claim ExtensionsExtensions of time beyond the twenty day time frames specified in the Rule might possibly be granted by the SEC, but only on a case-by-case basis. (SEC Staff to NYSE)/02 Counsel's Opinion for Lost Certificates Generally, there is no applicable charge for lost security certificates even though opinion of outside counsel has not been obtained provided the broker-dealer takes prompt steps for replacement of the loss. These steps should include placing a stop transfer order with the transfer agent, obtaining a replacement bond from an insurance company and transmitting it to the transfer agent, and whatever other steps would be necessary to expedite the replacement. (SEC Staff to NYSE) (No. 77-2, June 1977)
In reviewing the five disclosures under Brickell's "Regulatory - Final" heading, the most recent item is the AWC under discussion here. As such, there are four other matters that FINRA characterized as "Regulatory - Final" for purposes of inclusion on BrokerCheck.This type of disclosure event involves (1) a final, formal proceeding initiated by a regulatory authority (e.g., a state securities agency, self-regulatory organization, federal regulator such as the U.S. Securities and Exchange Commission, foreign financial regulatory body) for a violation of investment-related rules or regulations; or (2) a revocation or suspension of the authority of a brokerage firm or its control affiliate to act as an attorney, accountant or federal contractor.
This matter involves violations of Section 17(a) of the Exchange Act and Rule 17a-8 thereunder, which require broker-dealers to comply with the reporting, recordkeeping and record retention requirements in regulations implemented under the Bank Secrecy Act, including the customer identification program rule (31 C.F.R. § 1023.220, the "CIP Rule") by Respondent, a Miami-based broker-dealer. In January 2003, a Central American bank (the "Central American Bank"), at the time affiliated with Respondent, opened a brokerage account with Respondent, its affiliate, purportedly for the sole purpose of brokerage trading by the Central American Bank itself. No sub-account holders or other beneficial owners were identified on the Central American Bank account application. In actuality, 13 entities that maintained accounts with the Central American Bank were sub-account holders of the Central American Bank account. These Central American Bank corporate accounts were beneficially owned by 23 non-U.S. citizens who interfaced directly with Respondent's registered representatives to solicit securities trading advice and to request account maintanenace, securities orders, and execution through the Central American Bank account. Until approximately August 2013, Respondent violated the federal securities laws by failing accurately to document its CIP procedures, comply with the Commission's CIP Rule, or create and maintain the required books and records for the Central American Bank account, the Central American Bank corporate accounts, or their beneficial owners. During this ten year time-frame, the beneficial owners of the Central American Bank corporate accounts effectuated securities transactions totaling approximately $23.8 million.
Between September 1, 2011 and October 31, 2012 (hereinafter the "postage and handling review period"), ESF charged its customers a transaction fee and a custody fee in addition to a commission on fixed income transactions. The foregoing charges were not reasonably related to any direct handling-related services performed by the firm, or handling-related expenses incurred by the firm, in processing transactions, but rather, were effectively additional commissions for the firm. Based on the foregoing, ESF violated NASD Rule 2430, FINRA Rule 2010 and Exchange Act Rule 10b-10. During the time period of February 2012 to February 2014, ESF failed to deliver prospectuses to 10 out of 40 customers who had purchased commercial paper of ESF's affiliate and failed to establish, maintain and enforce a supervisory system and WSPs to ensure prospectus delivery, in contravention of Section 5 of the Securities Act of 1933 (hereinafter the "Securities Act") and in violation of FINRA Rule 2010 and NASD Rule 3010(a) and (b). During the time period of November 2012 through December 2013, ESF also failed to establish, maintain and enforce a supervisory system and WSPs regarding email review, in violation of FINRA Rule 2010 and NASD Rule 3010(a),(b) and (d). From 2003 through 2013, ESF allowed persons without trading authority in a brokerage account opened by a Central American bank to direct trading in the account, in violation of NASD Rules 2110, 3010(a) and (b) and FINRA Rule 2010. During the time period from June 2013 through August 2013, ESF maintained inaccurate books and records reflecting that transactions were solicited, when in fact, the transactions were unsolicited, in violation of FINRA Rules 4511(a), 2010, Exchange Act Section 17(a), and Exchange Act Rule 17a-3. Last, in 2013, ESF inaccurately computed its customer reserve formula which resulted in hindsight deficiencies and filed inaccurate FOCUS reports, in violation of Exchange Act Rules 15?3-3, 17a-3. 17a-5 and FINRA Rules 4511(a) and 2010.
So . . . someone . . . anyone . . . ya wanna explain to me how it is that the November 1, 2017 AWC analyzed in today's BrokeAndBroker.com Blog asserts that:In 2007, ESF was censured and fined $10,000 for failure to maintain accurate books and records, in violation of Section 17(a) of the Securities Exchange Act of 1934 (the "Exchange Act"). Exchange Act Rule 17a-3 and NASD Rules 31 10 and 2110, and for failing to establish and maintain adequate customer safekeeping accounts in violation of Section 15c of the Exchange Act, Exchange Act Rule 15c3-3 and NASD Rule 2110.On December 14, 2012, in connection with ESF's sale of commercial paper, the firm was censured and fined $200,000 for making false, exaggerated and unwarranted statements to clients, failure to conduct adequate due diligence and failure to adopt, maintain, and enforce adequate written supervisory procedures ("WSPs") pertaining to its sales of the commercial paper.
And before you're too quick to pooh-pooh this disclosure issue as a one-off issue or just a bit of oddball esoterica, please read: "FINRA's Foolish Inconsistency" (BrokeAndBroker.com Blog, June 9, 2017)BGM has no relevant disciplinary history with the Securities and Exchange Commission, FINRA, any other self-regulatory organization or any state securities regulator.