$63,110.84

Tax

FINRA

Without admitting or denying the findings, Arnold consented to the sanctions and to the entry of findings that between August 2007 and January 2009, he failed to establish, maintain and implement a reasonable supervisory system and written supervisory procedures (WSPs) designed to achieve compliance with Section 5 of the Securities Act of 1933, in violation of NASD Rules 3010(a) and (b), and NASD Rule 2110 (for conduct that occurred prior to December 15, 2008) and FINRA Rule 2010 (for conduct occurring on and after December 15, 2008). The findings stated that Arnold was his member firm's chief compliance officer (CCO) and anti-money laundering (AML) compliance officer (AMLCO) prior to and from August 2007 to January 2009. Arnold did not establish, maintain and implement adequate supervisory systems and procedures reasonably designed to comply with Section 5 of the Securities Act of 1933 between August 2007 and January 2009. Arnold was the firm's CCO prior to and from August 2007 until January 7 2009. Prior to January 2009, the written procedures addressing review of deposited share certificates were basic, not providing any detail on the due diligence to be done by the firm. For his supervisory deficiencies regarding sales of unregistered securities, Arnold violated NASD Rule 3010(a) and (b) and FINRA Rule 2010 (for the period occurring on and after December 15, 2008), and NASD Rule 2110 (for the period prior to December 15, 2008). As the firm's CCO, Arnold was responsible for the firm's WSPs and ensuring that the firm complied with applicable regulations and statutes. The findings also stated that during the period from August 2007 through January 2009 Arnold, as his firm's AMLCO, failed to establish and implement an adequate AML program. Arnold failed to investigate various red flags that suggested suspicious activity that may have required the filing of a suspicious activity report. Arnold was the designated AMLCO prior to January 2009. Arnold's inadequate implementation of the firm's AML procedures violated NASD Conduct Rule 3011(a) and FINRA Rule 2010 (for the period occurring on and after December 15, 2008), and NASD Rule 2110 (for the period prior to December 15, 2008).

Acceptance, Waiver & Consent(AWC)

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

$20,000.00

Suspension

ALL PRINCIPAL CAPACITIES

30 DAYS

12/1/2014

12/30/2014

IN CONNECTION WITH THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT MATTER 201002322050, BURT M. ARNOLD SUBMITS THIS MITIGATION STATEMENT DESCRIBING THE MITIGATING CIRCUMSTANCES RELATING TO THE ISSUES DESCRIBED IN THE AWC. THIS MITIGATION STATEMENT IS SUBMITTED BY MR. ARNOLD. IT DOES NOT CONSTITUTE FACTUAL OR LEGAL FINDINGS BY FINRA, NOR DOES IT REFLECT THE VIEWS OF FINRA, OR ITS STAFF. MR. ARNOLD'S EFFORTS TO COMPLY WITH FINRA'S RULES RELATING TO SUPERVISION AND AML INCLUDED CAREFULLY FOLLOWING ALL OF THE COMPLIANCE POLICIES AND PROCEDURES OF BMA SECURITIES, INC. ("BMA" OR THE "FIRM") RELATING TO COMPLIANCE WITH SECTION 5 OF THE SECURITIES ACT OF 1933. TO THAT END, THE FIRM'S AND MR. ARNOLD'S COLLECTIVE EFFORTS INCLUDED THE FOLLOWING: MITIGATING CIRCUMSTANCES - AWC ISSUES RELATING TO SECTION 5 AND SUPERVISION. MR. ARNOLD'S EFFORTS TO COMPLY WITH AN EXEMPTION FROM REGISTRATION AND EFFORTS TO IMPLEMENT POLICIES AND PROCEDURES FOR COMPLIANCE WITH SECTION 5 INCLUDED THE FOLLOWING: MR. ARNOLD CAUSED BMA TO UTILIZE A CLIENT QUESTIONNAIRE (I.E., THE "DEPOSITED SECURITIES QUESTIONNAIRE" OR "DSQ") THAT INCLUDED QUESTIONS INTENDED TO DETERMINE TRADEABILITY OF THE SHARES AND TO IDENTIFY OTHER REGULATORY RED FLAGS. THE DSQ UNDERWENT SEVERAL ITERATIONS IN AN EFFORT TO CONTINUALLY IMPROVE THE INFORMATION GATHERED FOR DUE DILIGENCE PACKAGES. MR. ARNOLD CAUSED BMA TO UTILIZE A "STOCK CERTIFICATE CHECKLIST" OR "SECURITIES CHECKLIST" THAT DOCUMENTED THE COLLECTION OF INFORMATION RELATIVE TO THE PROPOSED TRANSACTION INCLUDING THE STOCK CERTIFICATE NUMBER, NUMBER OF SHARES, STOCK POWERS, OPINION LETTER, WHETHER THERE WAS A VISIBLE LEGEND, AND WHETHER A DSQ WAS SENT TO THE CUSTOMER. "DUE DILIGENCE" PACKAGES WERE COMPILED FOR EACH TRANSACTION, WHICH INCLUDED THE DSQ, THE SECURITIES CHECKLIST, ANY NOTES/MEMOS TO FILE, ANY POWERS OF ATTORNEY, ANY EXISTING OPINION LETTERS, AND CORRESPONDENCE WITH THE CUSTOMER AND TRANSFER AGENT. THE PACKAGES WERE REVIEWED BY THE BROKER AND BMA'S COMPLIANCE OFFICER. BMA, THROUGH ARNOLD, CONDUCTED MANDATORY COMPLIANCE TRAINING MEETINGS. MR. ARNOLD HAS NO PRIOR RELEVANT DISCIPLINARY HISTORY. ADDITIONALLY, MR. ARNOLD HAS COOPERATED WITH THE STAFF IN ITS ONGOING INVESTIGATIONS THROUGHOUT WITH REGARD TO ALL AWC ISSUES. FINALLY, MR. ARNOLD HAS INITIATED MULTIPLE ENHANCEMENTS TO BMA'S PROCEDURES AND SUPERVISORY SYSTEM FOR COMPLIANCE WITH SECTION 5, WHICH ARE DETAILED IN BMA'S "CORRECTIVE ACTION STATEMENT," ATTACHED TO ITS AWC. MITIGATING CIRCUMSTANCES - AWC ISSUES RELATING TO AML AND CIP PROCEDURES. MR. ARNOLD'S EFFORTS TO CAUSE BMA TO IMPLEMENT ADEQUATE AML PROCEDURES AND TO HAVE AN ADEQUATE CIP INCLUDED THE FOLLOWING: UNDERTAKING ALL OF ABOVE-LISTED EFFORTS WITH REGARD TO SECURITIES REGISTRATION COMPLIANCE. FOR EXAMPLE, BMA OBTAINED QUESTIONNAIRES FROM THE CUSTOMERS (DSQS), INVESTIGATED THE RELIABILITY OF THE INFORMATION REPORTED ON THE QUESTIONNAIRES, RAN GOOGLE CHECKS, RAN OFAC CHECKS, INTERVIEWED POTENTIAL CUSTOMERS, REJECTED EVASIVE POTENTIAL CUSTOMERS, CONTACTED TRANSFER AGENTS, CONTACTED CORPORATE COUNSEL, CONFERRED WITH OUTSIDE COUNSEL, AND REVIEWED SEC FILINGS. ATTEMPTS TO OBTAIN THE TRUE IDENTITY OF CUSTOMERS INCLUDED THE FOLLOWING (DEPENDING UPON WHETHER THE PERSON WAS AN INDIVIDUAL OR ENTITY): A COMPLETED CHECKLIST OF ITEMS UNDERTAKEN IN FURTHERANCE OF THE FIRM'S CIP; AN OFAC SEARCH; COMPLETED AND EXECUTED FORMS AND AGREEMENTS OF THE FIRM'S CLEARING AGENT; COMPLETED/EXECUTED TAX FORM W- 8BEN; A COPY OF THE ACCOUNT HOLDER'S DRIVER'S LICENSE WITH A SIGNED CERTIFICATION FROM THE HOLDER; CERTIFICATE OF INCORPORATION; CORPORATE RESOLUTIONS; AND ARTICLES OF ASSOCIATION. FINALLY, MR. ARNOLD HAS CAUSED BMA TO INITIATE MULTIPLE ENHANCEMENTS TO ITS PROCEDURES AND SUPERVISORY SYSTEM FOR COMPLIANCE WITH AML AND CIP, WHICH ARE DETAILED IN BMA'S "CORRECTIVE ACTION STATEMENT," ATTACHED TO ITS AWC.

GA SEC.OF STATE,DIV. OF SECURITIES AND BUSINESS REGULATION

RESPONDENT WAS NOT REGISTERED AS A SECURITIES SALESPERSON IN GA. RESPONDENT OFFERED FOR SALE OR SOLD SECURITIES TO GEORGIA RESIDENTS.

Consent

Monetary/Fine

$1,500.00

Cease and Desist/Injunction

Suspension

RESPONDENT NEITHER ADMITS NOR DENIES THE FINDINGS OF FACT AND CONCLUSIONS OF LAW SET FORTH IN THE PROPOSED ORDER.

RESPONDENT SHALL PAY A CIVIL PENALTY IN THE AMOUNT OF $1,000.00 AND $500.00 IN INVESTIGATIVE COSTS. RESPONDENT AGREEES TO BE SUSPENDED FROM ASSOCIATION WITH A REGISTERED DEALER, LIMITED DEALER, OR INVESTMENT ADVISOR IN GA FOR 12 MONTHS BEGINNING 5/15/2002 AND ENDING 5/14/2002. FINES PAID 5/10/2002.

MR. ARNOLD, WHILE EMPLOYED AT J. ALEXANDER SECURITIES, INC., WAS TOLD BY THE COMPLIANCE OFFER OF THIS FIRM THAT NO REGISTRATION IN THE STATE OF GEORGIA WAS NECCESSARY AS LONG AS THE ORDERS WERE UNSOLICITED. IT WAS LATER DISCOVERED THAT REGISTRATION IN GEORGIA WAS, INDEED, REQUIRED UNDER THESE CIRCUMSTANCES.