FINRA

SEC RULES 17A-3, 17A-4, 17A-5, ARTICLE IV, SECTIONS 1 AND 8 AND ARTICLE V, SECTION 2 OF FINRA BY-LAWS, FINRA RULES 1250, 2010, 3130, 3310(B), 3310(C), 4370, ARTICLE IV, SECTION 8 OF NASD BY-LAWS, NASD RULES 1120, 1160, 2110, 3010, 3011(B), 3011(C), 3012, 3013, 3110, 3510: IN PREPARATION FOR A FINRA EXAMINATION, STEVENS, A MEMBER FIRM'S PRESIDENT, BACKDATED CONTINUING EDUCATION (CE) TEST FORMS SUBMITTED BY REGISTERED REPRESENTATIVES AND PLACED THEM IN BINDERS WHICH WERE MADE PART OF THE FIRM'S BOOKS AND RECORDS. STEVENS PRESENTED THE BINDERS CONTAINING THE BACKDATED CE TEST FORMS TO FINRA IN RESPONSE TO FINRA'S REQUEST. STEVENS KNEW THAT THE DATES HE AFFIXED TO THE CE TEST FORMS WERE FALSE AND KNEW THAT HIS STATEMENT TO THE FINRA EXAMINER REGARDING THE AUTHENTICITY OF THE CE MATERIALS WAS ALSO FALSE. THE FIRM, ACTING THROUGH STEVENS, FAILED TO DEVELOP A WRITTEN FIRM ELEMENT CE TRAINING PLAN, AND FAILED TO ANNUALLY EVALUATE AND PRIORITIZE THE FIRM'S TRAINING NEEDS. FIRM REPRESENTATIVES SOLD AT LEAST $1,284,500 WORTH OF UNITS OF AN OFFERING TO CUSTOMERS. PRIOR TO EXECUTING THESE TRANSACTIONS, THE FIRM, ACTING THROUGH STEVENS, FAILED TO CONDUCT ADEQUATE DUE DILIGENCE OF THE OFFERING, AND FAILED TO ENSURE THAT ALL OF THE CUSTOMERS WHO PURCHASED UNITS OF THE OFFERING WERE SUITABLE FOR THOSE PURCHASES. THE OFFERING FAILED TO RAISE THE MINIMUM REQUIRED AND ALL FUNDS WERE RETURNED TO INVESTORS. THE FIRM, ACTING THROUGH STEVENS, FAILED TO PRESERVE ANY DOCUMENTATION SHOWING THAT EACH OF ITS CUSTOMERS WHO HAD PURCHASED UNITS OF THE OFFERING AND TENDERED FUNDS RECEIVED A RETURN OF THEIR FUNDS. STEVENS ASSUMED THAT THE FUNDS WERE RETURNED TO CUSTOMERS WITHOUT ANY DOCUMENTATION TO SUPPORT THE ASSUMPTION. DESPITE KNOWING THAT ITS REPRESENTATIVES WERE USING UNAPPROVED EMAIL ADDRESSES FOR SECURITIES RELATED EMAIL COMMUNICATIONS, THE FIRM, ACTING THROUGH STEVENS, ALLOWED AT LEAST ONE OF THE REPRESENTATIVES TO CONTINUE TO USE AN UNAPPROVED EMAIL ADDRESS. THE FIRM, ACTING THROUGH STEVENS, FAILED TO REVIEW ANY OF ITS REPRESENTATIVES' EMAIL CORRESPONDENCE THAT THE FIRM ACTUALLY DID CAPTURE THROUGH ITS THIRD PARTY SERVICE, AND FAILED TO REVIEW ALL OTHER CORRESPONDENCE OF THE FIRM'S REPRESENTATIVES. THE FIRM, ACTING THROUGH STEVENS, FAILED TO PREPARE AN ACCURATE GENERAL LEDGER, TRIAL BALANCES, AND NET CAPITAL CALCULATIONS FOR THE FOLLOWING DATES: MARCH 31, 2010 AND OCTOBER 31, 2011. THE INACCURACIES WERE THE RESULT OF THE FIRM'S AND STEVENS' FAILURE TO PROPERLY ACCRUE ITS LIABILITIES, REFLECT LIABILITIES ON ITS GENERAL LEDGER AND BALANCE SHEET, AND REFLECT ASSETS ON ITS GENERAL LEDGER AND BALANCE SHEET. THE FIRM, ACTING THROUGH STEVENS, FILED AN INACCURATE FOCUS REPORT PART IIA FOR A QUARTER. THE FIRM, ACTING THROUGH STEVENS, FAILED TO CONDUCT AN ADEQUATE INDEPENDENT TEST FOR CALENDAR YEARS 2007, 2008 AND 2009 AND FAILED TO ARRANGE FOR AN INDEPENDENT TEST FOR THE FIRM'S COMPLIANCE WITH THE AML RULES IN 2010. THE FIRM, ACTING THROUGH STEVENS, FAILED TO OPEN AND DOWNLOAD FINANCIAL CRIMES ENFORCEMENT NETWORK (FINCEN) 314(A) REQUESTS, AND FAILED TO EVIDENCE ANY SEARCHES OF ITS RECORDS TO DETERMINE IF IT MAINTAINED ACCOUNTS FOR, OR ENGAGED IN TRANSACTIONS WITH, INDIVIDUALS OR ENTITIES LISTED ON REQUESTS FROM FINCEN. THE FIRM, ACTING THROUGH STEVENS, FAILED TO EVIDENCE THE PREPARATION OF THE TEST FOR THE FIRM'S SYSTEM OF SUPERVISORY POLICIES AND PROCEDURES AS REQUIRED BY RULE 3012, FAILED TO PREPARE NASD RULES 3012 AND 3013 REPORTS AND FINRA RULE 3130 REPORTS FOR THE YEARS 2006 THROUGH 2011, AND FAILED TO PREPARE AND SIGN THE ANNUAL CEO SUPERVISORY CERTIFICATION FOR THE YEARS 2006 THROUGH 2011. THE FIRM, ACTING THROUGH STEVENS, FIRST NOTIFIED FINRA OF THE NEED FOR THE "LIMITED SIZE AND RESOURCES" EXEMPTION ON AUGUST 18, 2006, WHICH REQUIRED THE FIRM TO SUBMIT NOTIFICATIONS OF ITS RELIANCE ON THE EXEMPTION WITHIN 30 DAYS ANNUALLY AFTER THAT DATE. [CONTINUED IN COMMENT]

Acceptance, Waiver & Consent(AWC)

Bar (Permanent)

All Capacities

Indefinite

10/12/2012

[CONTINUED FROM ALLEGATIONS]: THE FIRM, ACTING THROUGH STEVENS, MADE NO ANNUAL NOTIFICATIONS IN 2007, 2008 AND 2009, AND FAILED TO FILE A SECOND NOTIFICATION OF ITS RELIANCE ON THE EXCEPTION UNTIL APRIL 19, 2010. THE FIRM, ACTING THROUGH STEVENS, FAILED TO PROMPTLY AMEND ITS FINRA CONTACT INFORMATION (FCI) AFTER A PERSON LEFT THE FIRM'S EMPLOYMENT, CONDUCT AN ANNUAL REVIEW OF ITS FCI BY THE 17TH BUSINESS DAY OF 2010, FAILED TO IDENTIFY ANY SECONDARY EMERGENCY CONTACT PERSON ON ITS FCI, AND FAILED TO CONDUCT AN ANNUAL REVIEW OF ITS BUSINESS CONTINUITY PLANS (BCP) AND TO UPDATE THE FIRM'S BCP TO SHOW ANY MATERIAL CHANGES, FOR THE YEARS 2006 THROUGH 2009. THE FIRM, ACTING THROUGH STEVENS, WILLFULLY FAILED TO TIMELY AMEND ITS FORM BD, FORM BR AND A REPRESENTATIVE'S FORM U4. THE FIRM FAILED TO UPDATE ACCOUNT INFORMATION FOR NUMEROUS CUSTOMER ACCOUNTS WITHIN 36 MONTHS OF THE DATE THE INFORMATION WAS LAST RECORDED. THE FIRM, ACTING THROUGH STEVENS, KNEW THAT REPRESENTATIVES WERE ENGAGED IN OUTSIDE BUSINESS ACTIVITIES, BUT FAILED TO REQUIRE REPRESENTATIVES TO DISCLOSE THEIR OUTSIDE BUSINESS ACTIVITIES IN WRITING, AS REQUIRED BY NASD RULE 3030 AND THE FIRM'S WRITTEN SUPERVISORY PROCEDURES. WITHOUT ADMITTING OR DENYING THE FINDINGS, STEVENS CONSENTED TO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS; THEREFORE HE IS BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY. STEVENS UNDERSTANDS THAT THIS SETTLEMENT INCLUDE A FINDING THAT HE WILLFULLY OMITTED TO STATE A MATERIAL FACT ON A FORM U4, FORM BD OR FORM BR, AND THAT UNDER SECTION 3(A)(39)(F) OF THE SECURITIES EXCHANGE ACT OF 1934 AND ARTICLE III, SECTION 4 OF FINRA'S BY-LAWS, THIS OMISSION MAKES STEVENS SUBJECT TO A STATUTORY DISQUALIFICATION WITH RESPECT TO ASSOCIATION WITH A MEMBER.