FINRA

Springsteen-Abbott was statutorily disqualified because of an August 23, 2016 National Adjudicatory Council (NAC) decision that barred her from associating with any FINRA member in any capacity.

Decision

Denial

On May 24, 2018, the NAC issued Notice Pursuant to Section 19(d), Securities Exchange Act of 1934 finds the Membership Continuance Application (MC-400) submitted on September 28, 2016 by Commonwealth Capital Securities Corp. denied. FINRA found it not in the public interest, and would create an unreasonable risk of harm to the market and investors, for Springsteen-Abbott to continue to associate with the firm. The Application was denied for the following reasons: First, FINRA recently barred Springsteen-Abbott and the disqualifying event involved an egregious violation of the securities laws. Second, the firm is not capable of independently supervising Springsteen-Abbott, and the heightened supervisory plan it proposed is inadequate. Third, Member Regulation argues that Springsteen-Abbott continues to engage in misconduct by impermissibly associating with the firm, despite the bar that currently prohibits her from associating with any FINRA member in any capacity. The denial is in effect pending the Decision's finality. On June 21, 2018, Springsteen-Abbott requested Securities and Exchange Commission (SEC) review of FINRA's Decision. The denial remains in effect while on appeal. On July 8, 2020 the SEC dismissed the application for review of FINRA's Decision.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SEC ADMIN RELEASES 33-9459, 34-70547, SEPTEMBER 27, 2013: THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMED IT APPROPRIATE THAT CEASE-AND-DESIST PROCEEDINGS BE INSTITUTED PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933 ("SECURITIES ACT") AND SECTION 21C OF THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT"), AGAINST KIMBERLY SPRINGSTEEN-ABBOTT ("SPRINGSTEEN-ABBOTT" OR "RESPONDENT"). THE COMMISSION FOUND THAT FROM 2006 THROUGH 2011, A CORPORATION MADE MISLEADING DISCLOSURES CONCERNING THE EXPENSES THAT IT CHARGED TO NINE EQUIPMENT LEASING FUNDS THAT WERE SPONSORED BY THE CORPORATION'S PARENT COMPANY (THE "FUNDS"). THE CORPORATION REPRESENTED IN THE FUNDS' OFFERING DOCUMENTS, WHICH WERE REVIEWED AND APPROVED BY ITS CHIEF EXECUTIVE OFFICER ("CEO") SPRINGSTEEN-ABBOTT, THAT THE SALARY EXPENSES OF THE CORPORATION'S AND ITS PARENT'S "CONTROLLING PERSONS" WOULD NOT BE CHARGED TO THE FUNDS. THE OFFERING DOCUMENTS DESCRIBE TEN TO FIFTEEN INDIVIDUALS FOR EACH FUND THAT SERVE AS DIRECTORS OR EXECUTIVE AND SENIOR MANAGEMENT FOR THE CORPORATION AND ITS PARENT. THE OFFERING DOCUMENTS FURTHER DESCRIBE THE VARIOUS FUNCTIONS AND ACTIVITIES OF THESE INDIVIDUALS AND REFER TO THEM AS THE CORPORATION'S KEY MANAGEMENT AND THE PERSONS RESPONSIBLE FOR MAKING ALL OF THE FUNDS' INVESTMENT DECISIONS. THE CORPORATION AND SPRINGSTEEN-ABBOTT NEGLIGENTLY FAILED TO DISCLOSE THAT SHE WAS THE SOLE CONTROLLING PERSON UNDER THEIR INTERPRETATION OF THE DEFINITION AND THAT THE CORPORATION AND ITS CORPORATE PARENT ROUTINELY EXPENSED A PORTION OF THE SALARIES OF ALL OTHER EMPLOYEES, EXECUTIVE OFFICERS, AND DIRECTORS TO THE FUNDS. EACH FUND'S DOCUMENTATION AND EACH PUBLIC FUNDS' FORMS 10-K AND 10-Q FILED WITH THE COMMISSION BETWEEN 2006 AND 2011 DISCLOSED THE AGGREGATE AMOUNT OF REIMBURSABLE EXPENSES CHARGED TO THE FUNDS, INCLUDING ALL SALARIES CHARGED TO THE FUNDS; HOWEVER, THE DOCUMENTATION AND FILINGS DID NOT BREAK DOWN THOSE EXPENSES SUCH THAT AN INVESTOR OR PROSPECTIVE INVESTOR IN A FUND NECESSARILY WOULD KNOW THAT THOSE EXPENSES CHARGED TO THAT FUND INCLUDED A PORTION OF THE SALARIES OF ALL CORPORATION EMPLOYEES, EXECUTIVE OFFICERS, AND DIRECTORS OTHER THAN ITS CEO. AS A RESULT OF THE CONDUCT, THE CORPORATION AND SPRINGSTEEN-ABBOTT VIOLATED SECTIONS 17(A)(2) AND (3) OF THE SECURITIES ACT BETWEEN 2006 AND 2011 BY THEIR NEGLIGENT MISREPRESENTATIONS AND OMISSIONS IN THE FUND DOCUMENTS AND PUBLIC FUNDS' FORMS 10-K AND 10-Q FILED DURING THOSE FUNDS' OFFERING PERIODS; AND CAUSED THE FUND'S VIOLATIONS OF SECTION 15(D) OF THE EXCHANGE ACT AND RULES 12B-20, 15D-1, AND 15D-13 THEREUNDER.

Order

Cease and Desist

Civil and Administrative Penalty(ies)/Fine(s)

$150,000.00

Disgorgement

$1,548,688.00

Monetary Penalty other than Fines

$77,566.00

IN AUGUST 2012, THE SEC RAISED QUESTION REGARDING THE INTERPRETATION AND APPLICATION OF THE TERM "CONTROL PERSON" AND EXPENSE REIMBURSEMENT THEREOF. COMMONWEALTH AND KIMBERLY SPRINGSTEEN-ABBOTT WORKED WITH THE STAFF TO ENSURE OUR DISCLOSURE WAS FURTHER CLARIFIED AND AS RESULT, ENTERED INTO A SETTLEMENT WITH THE SEC TO IMPLEMENT AN AGREEMENT AND ESTABLISH REIMBURSEMENT TO THE FUNDS OF $140,090 (PLUS INTEREST), REPRESENTING 9 FUNDS OVER A 5 YEAR PERIOD OF TIME. COMMONWEALTH ADDITIONALLY AGREED TO PAY AN AGREED FINE. ON OCTOBER 17, 2014, COMMONWEALTH RECEIVED A LETTER FROM THE MIAMI REGIONAL OFFICE OF THE SEC CONFIRMING THAT COMMONWEALTH INCOME & GROWTH FUND, INC. AND KIMBERLY SPRINGSTEEN-ABBOTT HAD SATISFIED IN FULL THE MONETARY PROVISIONS OF THE SETTLEMENT ORDER ENTERED ON SEPTEMBER 27, 2013. THE FINANCIAL PROVISIONS OF THE SETTLEMENT BENEFITTED ALL OF THE COMMONWEALTH FUNDS THAT SHARED IN THE FINANCIAL BENEFITS PROVIDED UNDER THE ORDER.

FINRA

FINRA RULE 2010, NASD RULE 3110 - KIMBERLY SPRINGSTEEN-ABBOTT DIRECTED THE MISUSE OF INVESTOR FUNDS TO PAY FOR VARIOUS CREDIT CARD CHARGES THAT WERE NOT RELATED TO LEGITIMATE BUSINESS PURPOSES OF THE FUNDS WHICH TOTALED AT LEAST $344,798.79. THE CHARGES RELATING TO THE MISUSED INVESTOR FUNDS CONSISTED OF PERSONAL EXPENSES FOR SPRINGSTEEN-ABBOTT AND ANOTHER INDIVIDUAL. SOME OF THE CHARGES HAVE BEEN REFUNDED. IN CONNECTION WITH A FINRA EXAMINATION, SPRINGSTEEN-ABBOTT AND HER MEMBER FIRM PROVIDED A FALSE AND BACK-DATED DOCUMENT IN CONNECTION WITH THE DOCUMENTATION PROVIDED REGARDING THE CREDIT CARD CHARGES. BY CREATING THE FALSE AND BACK-DATED DOCUMENTATION, SPRINGSTEEN-ABBOTT CAUSED HER FIRM TO MAINTAIN INACCURATE BOOKS AND RECORDS. AMENDED COMPLAINT ISSUED ON OCTOBER 23, 2013: COUNT I - VIOLATION OF FINRA RULE 2010: SPRINGSTEEN-ABBOTT DIRECTED THE MISUSE OF INVESTOR FUNDS TO PAY FOR VARIOUS CREDIT CARD CHARGES THAT WERE NOT RELATED TO LEGITIMATE BUSINESS PURPOSES OF THE FUNDS, WHICH TOTALED AT LEAST $208,954.44. THE CHARGES RELATING TO THE MISUSED INVESTOR FUNDS CONSISTED OF PERSONAL EXPENSES FOR SPRINGSTEEN-ABBOTT AND HER HUSBAND. SOME OF THE CHARGES RELATING TO THE MISUSED INVESTORS FUNDS HAVE BEEN REFUNDED; HOWEVER, THE REFUNDS OCCURRED SUBSEQUENT TO THE WELLS NOTICE TO SPRINGSTEEN-ABBOTT. DURING THE RELEVANT TIME PERIOD, THERE WERE A TOTAL OF 1840 CHARGES RELATING TO THE MISUSED INVESTOR FUNDS, 326 OF WHICH WERE INCURRED ON SATURDAYS AND SUNDAYS. THE MISUSED INVESTOR FUNDS INCLUDE SEVERAL INSTANCES WHERE NUMEROUS CHARGES WERE INCURRED ON A SINGLE DAY, NONE OF WHICH RELATED TO LEGITIMATE BUSINESS PURPOSES OF THE FUNDS.

Decision

Bar (Permanent)

All Capacities

Indefinite

8/23/2016

3/31/2017

All capacities

Indefinite

7/20/2017

Disgorgement

$36,225.85

Monetary Penalty other than Fines

$11,037.14

EXTENDED HEARING PANEL DECISION RENDERED MARCH 30, 2015 WHEREIN SPRINGSTEEN-ABBOTT WAS FINED $100,000, BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY, ORDERED TO PAY DISGORGEMENT IN THE AMOUNT OF $208,953.75, PLUS PREJUDGMENT INTEREST, AND ORDERED TO PAY COSTS OF $11,037.14. THE SANCTIONS WERE BASED ON FINDINGS THAT SPRINGSTEEN-ABBOTT MISUSED INVESTOR FUNDS BY IMPROPERLY ALLOCATING EXPENSES TO THE INVESTMENT FUNDS THAT WERE NOT RELATED TO THE FUNDS' BUSINESS. THE FINDINGS STATED THAT SPRINGSTEEN-ABBOTT ABUSED HER AUTHORITY BY IMPROPERLY ALLOCATING TO THE FUNDS TWO TYPES OF EXPENSES THAT WERE NOT RELATED TO THE FUNDS' BUSINESS: PERSONAL EXPENSES AND BROKER-DEALER EXPENSES. SPRINGSTEEN-ABBOTT, AS A CONTROL PERSON OF THE FUNDS' GENERAL PARTNER, HAD AUTHORITY TO ALLOCATE TO THE FUND'S EXPENSES INCURRED IN OPERATING THE FUNDS' BUSINESS. THE DOCUMENTS CREATING THE FUNDS EXPRESSLY LIMITED THE EXPENSES THAT THE FUNDS WOULD BEAR TO EXPENSES INCURRED IN CONDUCTING AND ADMINISTERING THE FUNDS' BUSINESS. SPRINGSTEEN-ABBOTT PROVIDED BUSINESS JUSTIFICATIONS TO FINRA FOR SOME OF THE EXPENSES ALLOCATED TO THE FUNDS. MANY OF THESE BUSINESS JUSTIFICATIONS WERE NOT CREDIBLE; OTHERS WERE DEMONSTRABLY FALSE. THE DOCUMENTS CREATING THE FUNDS PROHIBITED THE ALLOCATION OF CONTROL PERSON EXPENSES TO THE FUNDS. ACCORDINGLY, BECAUSE SPRINGSTEEN-ABBOTT WAS A CONTROL PERSON, HER EXPENSES WERE NEVER CHARGEABLE TO THE FUNDS. NOR WERE SPRINGSTEEN-ABBOTT'S HUSBAND'S EXPENSES AFTER HE BECAME A CONTROL PERSON. HOWEVER, SPRINGSTEEN-ABBOTT ALLOCATED THE EXPENSES OF HER HUSBAND TO THE FUNDS WITH KNOWLEDGE THAT IT WAS IMPROPER TO DO SO. SPRINGSTEEN-ABBOTT ALSO ALLOCATED TO THE FUNDS EXPENSES ASSOCIATED WITH CONTINUING EDUCATION TO MAINTAIN LICENSES RELATING TO THE FIRM/BROKER-DEALER. BROKER-DEALER TRAINING IS NOT THE FUNDS' BUSINESS, AND UNDER THE OFFERING DOCUMENTS THE FUNDS AGREED TO PAY ONLY THE EXPENSES OF CONDUCTING THE FUNDS' BUSINESS. ACCORDINGLY, THE ALLOCATION OF BROKER-DEALER/THE FIRM'S EXPENSES TO THE FUNDS WAS INCONSISTENT WITH THE PROVISIONS OF THE OFFERING DOCUMENTS RELATING TO THE ALLOCATION OF EXPENSES AND WAS IMPROPER. ON APRIL 23, 2015 THIS MATTER WAS APPEALED TO THE NAC. THE SANCTIONS ARE NOT IN EFFECT PENDING REVIEW. NAC decision rendered August 23, 2016 wherein the findings made are affirmed and the sanctions imposed by the Hearing Panel are affirmed, and additionally ordered to pay $1,626.58 in appeal costs. On September 19, 2016 Springsteen-Abbott appealed the decision to the SEC. On March 31, 2017, the SEC issued an Order that remanded the decision to FINRA for further consideration. NAC Decision rendered July 20, 2017 which affirmed the findings and modified the sanctions imposed. The NAC reduced Springsteen-Abbott's fine to $50,000, order disgorgement of $36,225.85, plus prejudgment interest and imposes no appeal costs. The bar is in effect as of July 20, 2017. (case #2011025675501r). On August 14, 2017, Springsteen-Abbott appealed the NAC decision to the SEC. The bar is in effect while on appeal. On November 16, 2017, FINRA filed an opposition to Springsteen-Abbott's application for review. FINRA requested that the commission dismiss the application, sustain FINRA's disciplinary action, and affirm the sanctions it imposed. SEC decision rendered February 7, 2020 wherein the findings made are sustained and the sanctions imposed by the NAC are modified. The SEC affirms the findings of violation and the bar and disgorgement that FINRA imposed, but set aside the fine. (Case #3-17560r). On March 27, 2020, Springsteen-Abbott appealed the decision to the U.S. Court of Appeals. U.S. Court of Appeals decision rendered Feb. 26, 2021 which dismissed in part and denied in part Springsteen-Abbott's petition for review. The decision is final on May 27, 2021.

The National Adjudicatory Council has rendered A DECISION and reaffirmed the FINRA Hearing Panel's decision of MARCH 30, 2015 IN CASE 201102575501 WHICH ORDERED DISGORGEMENT OF $208,953.75 AND A FINE OF $100,000 AND A PERMANENT BAR. MS. SPRINGSTEEN-ABBOTT Plans to file AN APPEAL with the SEC IN WHICH SHE HAS ASSERTED THAT THE SANCTIONS ARE UNREASONABLE AND EXCESSIVE AND THAT MANY OF THE FINDINGS OF FACT AND CONCLUSIONS OF LAW OF THE HEARING PANEL WERE ERRONEOUS.