California

California action was based on prior orders issued by FINRA, SEC and D.C. regulators for fraud in sale of securities.

Order

Bar (Permanent)

All Capasities

1/19/2016

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SEC ADMIN RELEASE 33-9891/34-75707/INVESTMENT COMPANY ACT RELEASE 31762/AUGUST 14, 2015: THE SECURITIES AND EXCHANGE COMMISSION (COMMISSION) DEEMS IT APPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933 (SECURITIES ACT) AND SECTIONS 15(B) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934 (EXCHANGE ACT), AND SECTION 9(B) OF THE INVESTMENT COMPANY ACT OF 1940 (INVESTMENT COMPANY ACT) AGAINST AHMED. FROM FEBRUARY 2009 THROUGH AT LEAST FEBRUARY 2013, A COMPANY, ITS SUBSIDIARY REGISTERED BROKER-DEALER, AND AHMED, PRESIDENT AND CHIEF EXECUTIVE OFFICER OF THE TWO ORGANIZATIONS, OFFERED AND SOLD IN UNREGISTERED, NON-EXEMPT TRANSACTIONS APPROXIMATELY $20 MILLION IN PROMISSORY NOTES TO AT LEAST 65 INVESTORS. MANY OF THE INVESTORS WERE CUSTOMERS OF THE BROKER-DEALER AND ADVISORY CLIENTS OF AN INVESTMENT ADVISER WHOSE EMPLOYEES WERE REGISTERED REPRESENTATIVES ASSOCIATED WITH THE BROKER-DEALER AND THAT OFFERED AND SOLD NOTES TO ITS CLIENTS. CONTRARY TO THE ORGANIZATIONS' AND AHMED'S REPRESENTATIONS REGARDING THE USE OF OFFERING PROCEEDS IN PRIVATE PLACEMENT MEMORANDA (PPMS) AND OTHER INVESTOR COMMUNICATIONS, THEY MISAPPROPRIATED PROCEEDS TO PAY AHMED'S PERSONAL EXPENSES, REMIT CHECKS TO AHMED'S BROTHER, AND FUND THE INVESTMENT ADVISER'S PAYROLL AND OPERATIONS. THE COMPANY AND AHMED ALSO USED THE PROCEEDS FROM LATER NOTE SALES TO MAKE INTEREST PAYMENTS TO EARLIER NOTEHOLDERS, THEREBY PERPETUATING THE FRAUD. FINALLY, IN LATE 2012 AND EARLY 2013, THE ORGANIZATIONS AND AHMED FRAUDULENTLY INDUCED SOME NOTEHOLDERS TO CONVERT OR EXTEND THEIR NOTES BEFORE THE SCHEME ULTIMATELY COLLAPSED IN APRIL 2013. AHMED WILLFULLY VIOLATED SECTIONS 5(A) AND (C) AND 17(A) OF THE SECURITIES ACT AND SECTION 10(B) OF THE EXCHANGE ACT AND RULE 10B-5 THEREUNDER.

Order

Bar (Permanent)

Acting as an officer or director of any issuer with securities registered with the Commission

Indefinite

9/28/2017

Broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or NRSRO

Indefinite

9/28/2017

Participating in any offering of a penny stock

Indefinite

9/28/2017

Serving or acting in capacities for a registered investment adviser (See Comments)

Indefinite

9/28/2017

Cease and Desist

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

$12,777,395.80

Disgorgement

$12,777,395.80

Monetary Penalty other than Fines

$1,503,424.84

UTAH

SUCCESS TRADE SECURITIES INC. OF WHICH RESPONDENT IS THE PRINCIPAL, AND RESPONDENT WERE EXPELLED FROM FINRA FOLLOWING FINDINGS OF WILLFUL VIOLATION OF THE SECURITIES EXCHANGE ACT OF 1934 AND RESPONDENT FAILED TO RESPOND TO DIVISION INQUIRIES CONCERNING HIS LICENSING APPLICATION RENDERING THE APPLICATION MATERIALLY INCOMPLETE.

Order

Denial

ALASKA

FUAD AHMED ENGAGED IN DISHONEST AND UNETHICAL CONDUCT IN THE SECURITIES BUSINESS.

Order

Denial

common law fraud; unsuitability; failure to conduct proper due diligence on recommended product; negligence; breach of fiduciary duty; breach of contract

$400,000.00

DISTRICT OF COLUMBIA

CHARGES WERE THAT HE AND HIS COMPANIES MADE MISLEADING STATEMENTS TO INVESTORS AND VIOLATED DISTRICT LAW AND THE DISTRICT OF COLUMBIA'S BROKER-DEALER REGULATIONS WHEN THEY OFFERED AND SOLD UNREGISTERED PROMISSORY NOTES. AHMED AND STI HAVE 60 DAYS FROM THE DATE OF THE ORDER TO MAKE PAYMENT OF THE PENALTY TO THE DISTRICT. THE RESPONDENTS HAVE 60 DAYS FROM THE DATE OF THE ORDER TO PAY RESTITUTION TO THE INVESTORS .

Consent

Bar (Permanent)

ALL CAPACITIES

PERMANENT

2/19/2015

Cease and Desist

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

$650,000.00

Monetary Penalty other than Fines

Restitution

$12,529,804.00

failure to supervise; violation of Section 25504 of the California Corporations Code

$199,375.85

FINRA

IN CONTRAVENTION OF SECTION 5 OF THE SECURITIES ACT, WILLFULLY VIOLATED SEC SECTION 10(B) OF THE EXCHANGE ACT AND RULE 10B-5, VIOLATED FINRA RULES 2010, 2020: THE FIRM AND AHMED, AS CHIEF EXECUTIVE OFFICER (CEO) AND PRESIDENT, PERPETRATED SECURITIES FRAUD WHEN HE DIRECTLY OR INDIRECTLY THROUGH THE FIRM'S REGISTERED REPRESENTATIVES SOLD AT LEAST $18 MILLION, THROUGH FRAUDULENT AND UNREGISTERED SALES, IN PROMISSORY NOTES ISSUED BY THE FIRM'S PARENT COMPANY TO 58 INVESTORS, MOST OF WHOM ARE CURRENT OR FORMER NATIONAL FOOTBALL LEAGUE AND NATIONAL BASKETBALL ASSOCIATION PLAYERS, AND AHMED, AS THE CEO, PRESIDENT, AND SOLE BOARD MEMBER OF THE FIRM'S PARENT COMPANY AND THE FIRM, MADE ALL OF THE DECISIONS FOR BOTH ENTITIES AT ALL RELEVANT TIMES. THE FIRM'S REGISTERED REPRESENTATIVES WHO SOLD THE NOTES WERE ALSO REGISTERED OR AFFILIATED WITH AN ENTITY, A STATE-REGISTERED INVESTMENT ADVISER AND AN INDEPENDENT CONTRACTOR OF THE FIRM. TYPICALLY, INVESTORS WERE INTRODUCED TO THE FIRM'S PARENT COMPANY THROUGH THE ENTITY. ALL, OR SUBSTANTIALLY ALL, OF THE NOTE-HOLDERS WERE INVESTMENT ADVISORY CLIENTS OF THE ENTITY AND CUSTOMERS OF THE FIRM, AND THE PARENT COMPANY FUNDED THE ENTITY'S OPERATIONS AT A POINT DURING THE PERIOD. SINCE THE PARENT COMPANY COMMENCED THE SALES, IT HAS NOT GENERATED SUFFICIENT REVENUE TO PAY ITS EXPENSES, INCLUDING PRINCIPAL AND INTEREST OWED ON ITS NOTES. THE COMPANY HAS RELIED PRIMARILY ON CAPITAL RAISED FROM THE SALE OF THE NOTES TO KEEP THE COMPANY SOLVENT. IN FACT, THE ONLY WAY THE COMPANY HAS BEEN ABLE TO MEET ITS MONTHLY INTEREST OBLIGATIONS ON THE NOTES IS BY SELLING ADDITIONAL NOTES AND USING THOSE PROCEEDS TO MAKE PAYMENTS TO EXISTING NOTE-HOLDERS. THE FIRM, WHICH WAS THE ONLY SOURCE OF OPERATIONAL REVENUE FOR ITS PARENT COMPANY, HAS NEVER GENERATED SUFFICIENT REVENUE TO PAY ITS OWN OPERATING EXPENSES AND THE EXPENSES OF THE COMPANY. AT ALL RELEVANT TIMES, THE COMPANY'S MONTHLY EXPENSES HAVE GREATLY EXCEEDED THE MANAGEMENT FEES IT HAS RECEIVED FROM THE FIRM. AHMED AND THE FIRM WILLFULLY VIOLATED SECURITIES EXCHANGE ACT WHEN THEY, KNOWINGLY OR, AT THE LEAST, RECKLESSLY, IN CONNECTION WITH THE PURCHASE OR SALE OF SECURITIES, DIRECTLY OR INDIRECTLY, BY USE OF THE MEANS OR INSTRUMENTALITY OF INTERSTATE COMMERCE OR OF THE MAILS, MADE UNTRUE STATEMENTS OF MATERIAL FACTS AND OMITTED TO STATE MATERIAL FACTS NECESSARY IN ORDER TO MAKE THE STATEMENTS MADE, IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING, THROUGH THEIR SALES OF NOTES AND OTHER SECURITIES, AND INCLUDING PHONE CALLS TO CUSTOMERS, AND THE USE OF THE MAILS TO SEND PRIVATE PLACEMENT MEMORANDA (PPMS) AND OTHER INVESTMENT-RELATED DOCUMENTS TO CUSTOMERS. SPECIFICALLY, THE MISREPRESENTATIONS AND OMISSIONS ARE: THE USE OF INVESTOR PROCEEDS; THE PARENT COMPANY'S INABILITY TO MAKE INTEREST AND PRINCIPAL PAYMENTS TO EXISTING NOTE-HOLDERS WITHOUT RAISING ADDITIONAL CAPITAL; THE PARAMETERS OF THE NOTE OFFERING; THE RATE OF RETURN ON THE NOTES; THE AMOUNT OF THE PARENT COMPANY'S OUTSTANDING DEBT; THE PURPORTED EXEMPT STATUS OF THE OFFERING; THE PURPORTED ACQUISITION OF AN AUSTRALIAN BROKER-DEALER; AND THE PURPORTED LISTING OF THE PARENT COMPANY'S STOCK. AHMED AND THE FIRM, DIRECTLY OR INDIRECTLY, MADE USE OF THE MEANS OR INSTRUMENTS OF TRANSPORTATION OR COMMUNICATION IN INTERSTATE COMMERCE OR OF THE MAILS, TO OFFER TO SELL OR TO SELL SECURITIES, OR TO CARRY OR CAUSE SUCH SECURITIES TO BE CARRIED THROUGH THE MAILS OR IN INTERSTATE COMMERCE FOR THE PURPOSE OF SALE OR FOR DELIVERY AFTER SALE. NO VALID REGISTRATION STATEMENT HAS BEEN FILED WITH THE SECURITIES EXCHANGE COMMISSION (SEC) OR HAS BEEN IN EFFECT WITH RESPECT TO ANY OFFERING OR SALE OF THE NOTES, AND THE SUBJECT SALES OF THE NOTES ARE NOT EXEMPT FROM REGISTRATION WITH THE SEC. AHMED AND THE FIRM PARTICIPATED IN, AND/OR CAUSED, THE UNREGISTERED OFFER AND SALE OF SECURITIES - THE NOTES - IN CONTRAVENTION OF THE SECURITIES EXCHANGE ACT.

Decision

Bar (Permanent)

All Capacities

Indefinite

9/25/2015

Monetary Penalty other than Fines

$14,671.74

Restitution

$13,684,105.19

HEARING PANEL DECISION RENDERED JUNE 25, 2014, WHEREIN AHMED WAS JOINTLY AND SEVERALLY ORDERED TO PAY RESTITUTION IN A TOTAL AMOUNT OF $13,706,288.28 TO INVESTORS, ORDERED TO PAY THE COSTS IN THE AMOUNT OF $12,221.52 AND BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER FIRM IN ANY CAPACITY. THE SANCTIONS WERE BASED ON FINDINGS THAT AHMED WILLFULLY VIOLATED SECURITIES EXCHANGE ACT IN CONNECTION WITH FRAUDULENT PURCHASE OR SALE OF SECURITIES. THE FINDINGS STATED THAT AHMED, HIS MEMBER FIRM AND OTHER REGISTERED REPRESENTATIVES AT THE FIRM SOLD MORE THAN $18 MILLION IN THE FIRM'S PARENT COMPANY PROMISSORY NOTES TO 58 INVESTORS, MANY OF WHOM ARE CURRENT OR FORMER NFL AND NBA PLAYERS, WHILE MISREPRESENTING OR OMITTING MATERIAL FACTS. SPECIFICALLY, AHMED AND THE FIRM MISREPRESENTED THAT THEY WERE RAISING $5 MILLION THROUGH THE SALE OF PROMISSORY NOTES AND CONTINUED TO MAKE THIS REPRESENTATION, EVEN AS THE SALES EXCEEDED THE ORIGINAL OFFERING BY MORE THAN 300 PERCENT. MOST OF THE NOTES PROMISED TO PAY AN ANNUAL INTEREST RATE OF 12.5 PERCENT ON A MONTHLY BASIS OVER THREE YEARS, WITH SOME NOTES PROMISING TO PAY INTEREST AS HIGH AS 26 PERCENT. THE FINDINGS ALSO STATED THAT AHMED AND HIS FIRM FAILED TO DISCLOSE THE AMOUNT OF THE COMPANY'S EXISTING DEBT TO INVESTORS AND THAT IT WAS UNABLE TO MAKE FUTURE INTEREST PAYMENTS WITHOUT RAISING MONEY FROM NEW INVESTORS. AHMED AND THE FIRM MISREPRESENTED HOW THE PROCEEDS WOULD BE USED, INSTEAD IMPROPERLY USING THE FUNDS TO MAKE UNSECURED LOANS TO AHMED AND TO MAKE INTEREST PAYMENTS TO EXISTING NOTE-HOLDERS. AHMED AND THE FIRM MISREPRESENTED THE RATE OF RETURN AND EXEMPT STATUS OF THE PRIVATE PLACEMENT OFFERING THROUGH WHICH THE NOTES WERE SOLD. THE FINDINGS ALSO INCLUDED THAT AHMED AND THE FIRM PARTICIPATED IN, AND/OR CAUSED, THE UNREGISTERED OFFER AND SALE OF SECURITIES - THE NOTES - IN CONTRAVENTION OF SECTION 5 OF THE SECURITIES EXCHANGE ACT OF 1933. ON JULY 21, 2014 AHMED FILED WITH THE OFFICE OF HEARING OFFICERS, (THE NAC), A NOTICE OF APPEAL OF THE HEARING PANEL DECISION, DATED JUNE 25, 2014. THE SANCTIONS ARE NOT IN EFFECT PENDING REVIEW. NAC decision rendered September 25, 2015, wherein the findings made are affirmed and the sanctions imposed by the Hearing Panel are modified therefore, Ahmed was jointly and severally ordered to pay restitution in a total amount of $13.7 million plus interest, to investors, ordered to pay, jointly and severally, costs in the total amount of $14,671.74 and barred from association with any FINRA member firm in any capacity. The sanctions were imposed by the National Adjudicatory Council following appeal for review of an Office of Hearing Officers' decision. The sanctions were based on findings that Ahmed willfully engaged in securities fraud and sold unregistered securities that were not exempt from registration. The respondent misrepresented and omitted material facts in connection with his sales of his parent company's promissory notes to investors. Thereby, Ahmed willfully violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, along with FINRA Rules 2010 and 2020, in connection with fraudulent purchase or sale of securities. Also, Ahmed sold unregistered securities without the benefit of an exemption, in contravention of Section 5 of the Securities Act. Appealed to the SEC October 9, 2015. SEC decision rendered September 28, 2017, wherein the findings made are held and the sanctions imposed by the NAC are sustained. Ahmed was barred, ordered to pay, jointly and severally, $13,684,105.19, plus prejudgment interest, in restitution to investors and costs in the total amount of $14,671.74. The decision became final November 27, 2017.

FINRA

FINRA RULES 2010, 3310(A), 3310(B), NASD RULES 2110, 3010, 3011(A), 3011(B), 3011(C), 3011(E): A MEMBER FIRM AND AHMED, THE FIRM'S PRESIDENT, CHIEF EXECUTIVE OFFICER (CEO), CHIEF COMPLIANCE OFFICER (CCO), ANTI-MONEY LAUNDERING COMPLIANCE OFFICER (AMLCO) AND FINOP, DID NOT IMPLEMENT AN ADEQUATE CUSTOMER IDENTIFICATION PROGRAM. OUT OF A SAMPLE OF 120 ACCOUNTS, THE FIRM COULD NOT PRODUCE ANY CUSTOMER INFORMATION, AND IN FACT, HAD NO ACCOUNT RECORD AT ALL (SUCH AS A NEW ACCOUNT FORM) FOR 24 ACCOUNTS. THE FIRM COULD ALSO NOT EVIDENCE THAT IT HAD VERIFIED THE IDENTITY OF THESE 24 ACCOUNTS. ADDITIONALLY, FOR THE ACCOUNTS THAT DID HAVE PROPER IDENTIFICATION PAPERWORK, SOME OF THE CUSTOMER IDENTIFICATION PAPERWORK PROVIDED TO THE FIRM AND PLACED IN THE CUSTOMER FILES WAS COMPLETELY ILLEGIBLE. THERE WAS LITTLE TO NO SURVEILLANCE OF ACCOUNTS FOR SUSPICIOUS ACTIVITY. THE FIRM DID NOT UTILIZE ANY EXCEPTION REPORTS. AHMED OBTAINED AND MANUALLY REVIEWED BI-WEEKLY REPORTS FROM HIS CLEARING FIRM. THESE REPORTS INCLUDED ALL INCOMING AND OUTGOING WIRE ACTIVITY AT THE FIRM FOR A TWO WEEK TIME PERIOD, BUT WERE NOT CONDUCIVE TO DETECTING ANY PATTERNS OR TO IDENTIFYING EXCEPTIONS. ALTHOUGH AHMED INITIALED THE REPORTS, THERE WAS NO DATE TO EVIDENCE THAT THE REPORTS WERE REVIEWED IN A TIMELY MANNER, AND THERE WERE NO NOTES OR OTHER DOCUMENTS TO INDICATE HE HAD REVIEWED OR LOOKED INTO ANY WIRES. AHMED SAMPLED AND REVIEWED FIRM ACCOUNTS ON A MONTHLY BASIS, BUT DID NOT DO SO BASED ON A RELEVANT ASSESSMENT OF RISK. FURTHER, THE ACCOUNT REVIEW DID NOT INCLUDE CUSTOMER ACCOUNTS. ADDITIONALLY, THE REVIEW WAS DELEGATED TO ANOTHER PRINCIPAL OF THE FIRM WHO DID NOT UNDERSTAND THE REVIEW HE WAS SUPPOSED TO UNDERTAKE AND, THEREFORE, DID NOT CONDUCT ANY MEANINGFUL REVIEW. THE FIRM'S PROCEDURES OUTLINED RED FLAGS THAT REQUIRED A FOLLOW UP REVIEW. THESE INCLUDED TRANSACTIONS THAT LACKED A BUSINESS PURPOSE, CUSTOMERS WITH QUESTIONABLE BACKGROUNDS, CUSTOMERS THAT EXHIBITED A LACK OF CONCERN FOR TRANSACTION COSTS, CUSTOMERS MAINTAINING MULTIPLE ACCOUNTS FOR NO APPARENT REASON, UNEXPLAINED WIRE ACTIVITY, WIRES TO COUNTRIES PRESENTING A MONEY LAUNDERING RISK, DEPOSITS FOLLOWED BY REQUESTS TO WITHDRAW THE FUNDS WITHOUT APPARENT PURPOSE, AND INFLOWS OF FUNDS BEYOND THE KNOWN RESOURCES OF THE CUSTOMER. THE FIRM DID NOT FOLLOW UP ON ANY OF THE RED FLAGS NOTED IN ITS AML COMPLIANCE PROGRAM (AMLCP), DID NOT MAINTAIN A LIST OF HIGH-RISK CUSTOMERS, AND DID NOT MONITOR A SUFFICIENT AMOUNT OF ACCOUNT ACTIVITY TO PERMIT IDENTIFICATION OF PATTERNS OF UNUSUAL SIZE, VOLUME, GEOGRAPHIC FACTORS, ETC. THE FIRM AND AHMED FAILED TO DETECT AND FOLLOW-UP ON THESE RED FLAGS INDICATING THAT A CUSTOMER MAY BE ENGAGING IN IMPROPER AND/OR ILLEGAL ACTIVITIES. THE FIRM FAILED TO MAINTAIN EVIDENCE THAT IT'S FEBRUARY 2009 AMLCP WAS APPROVED IN WRITING BY A MEMBER OF FIRM MANAGEMENT AS REQUIRED. FOR 2008 AND 2009, THE FIRM FAILED TO COMPLY WITH ITS NASD RULE 3011(C) OBLIGATIONS. IN 2008, THE TESTING WAS PATENTLY INADEQUATE. THE TEST FAILED TO REVIEW FOR SUSPICIOUS ACTIVITY, HIGH-RISK ACCOUNTS, RED FLAGS, OR CUSTOMER ACCOUNT VERIFICATION; INDICATED THAT SEVERAL AREAS WERE "NOT APPLICABLE" WHEN THEY CLEARLY WERE; FAILED TO INCLUDE AN INDEPENDENT SAMPLE TO ENSURE THAT THE FIRM WAS CONDUCTING ADEQUATE REVIEWS FOR AML ACTIVITY; FAILED TO IDENTIFY ANY ACCOUNTS THAT WERE MISSING CUSTOMER IDENTIFICATION VERIFICATION, DESPITE MORE THAN 20 ACCOUNTS IN A STAFF SAMPLING OF 120 ACCOUNTS THAT CONTAINED NO EVIDENCE OF CUSTOMER VERIFICATION; FAILED TO INDICATE THAT THE FIRM WAS NOT UTILIZING ANY AML EXCEPTION REPORTS EVEN THOUGH AML-RELATED EXCEPTION REPORTS WERE MADE AVAILABLE BY THE CLEARING FIRM. MOREOVER, IN 2009, THE FIRM FAILED TO CONDUCT ANY INDEPENDENT TESTING OF ITS AML PROGRAM WHATSOEVER. [CONTINUED IN COMMENT]

Acceptance, Waiver & Consent(AWC)

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

$10,000.00

Suspension

ANY PRINCIPAL CAPACITY

60 DAYS

3/19/2012

5/17/2012

CONTINUING EDUCATION TRAINING

[CONTINUED FROM ALLEGATIONS]: ADDITIONALLY, THE FIRM FAILED TO HAVE AN ADEQUATE TRAINING PROGRAM FOR FIRM PERSONNEL WITH RESPECT TO AML ISSUES IN 2007 AND 2008. ALTHOUGH THE 2008 ANNUAL COMPLIANCE MEETING SUPERFICIALLY TOUCHED ON AML, IT WAS NOT ADEQUATELY TAILORED TO THE FIRM'S BUSINESS. DURING THE MONTH END PERIOD OF MARCH THROUGH MAY AND EARLY JUNE 2009, THE FIRM CONDUCTED A SECURITIES BUSINESS DESPITE THE FACT THAT IT FAILED TO MAINTAIN ITS REQUIRED MINIMUM NET CAPITAL. THE FIRM FAILED TO CONDUCT ACCURATE NET CAPITAL COMPUTATIONS AND CONSEQUENTLY MAINTAINED DEFICIENT NET CAPITAL. THE INACCURATE COMPUTATIONS WERE PRIMARILY DUE TO INACCURATE NET CAPITAL TREATMENT OF A CLEARING FIRM DEPOSIT UPON TERMINATION OF THE CLEARING RELATIONSHIP, IMPROPER BOOKING OF EXPENSES AND LIABILITIES, AND THE FIRM'S FAILURE TO ACCURATELY CLASSIFY ALLOWABLE VERSUS NON ALLOWABLE ASSETS. BECAUSE OF THE ABOVE NOTED DISCREPANCIES, THE FIRM FAILED TO PREPARE AN ACCURATE GENERAL LEDGER AND TRIAL BALANCE AND QUARTERLY FOCUS REPORT FOR THE QUARTERS ASSOCIATED WITH THE NET CAPITAL DEFICIENCIES. AS THE FIRM'S FINOP, AHMED WAS AT ALL TIMES RESPONSIBLE FOR ENSURING THAT THE FIRM COMPLIED WITH ITS NET CAPITAL AND BOOKS AND RECORDS OBLIGATIONS AND CAUSED THE FIRM'S VIOLATIONS. THE FIRM AND AHMED FAILED TO ESTABLISH AND IMPLEMENT AN ADEQUATE SUPERVISORY SYSTEM AND ENFORCE ITS WRITTEN PROCEDURES IN SEVERAL AREAS. THE FIRM AND AHMED FAILED TO MAINTAIN CURRENT INFORMATION REGARDING FORMS U4 AND UNIFORM BRANCH OFFICE REGISTRATION (BR) AND FAILED TO OBTAIN FINGERPRINTS WHEN REQUIRED TO DO SO. THE FIRM AND AHMED ALSO FAILED TO PREVENT NON-REGISTERED INDIVIDUALS FROM ACTING IN A REGISTERED CAPACITY. THREE UNLICENSED INDIVIDUALS HAD DAY-TO-DAY RESPONSIBILITIES THAT REQUIRED THE FIRM TAKE THEIR FINGERPRINTS, YET THE FIRM FAILED TO DO SO. FURTHER, THE FIRM AND AHMED FAILED TO MAINTAIN ADVERTISING MATERIAL, FAILED TO TIMELY FILE ADVERTISING MATERIAL WITH FINRA ADVERTISING REGULATION, AND FAILED TO COMPLY WITH THE CONTENT STANDARDS FOR ADVERTISING MATERIAL. WITHOUT ADMITTING OR DENYING THE FINDINGS, AHMED CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE HE IS FINED $10,000, SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY PRINCIPAL CAPACITY FOR 60 DAYS, AND MUST COMPLETE 16 HOURS OF CONTINUING EDUCATION RELATED TO AML COMPLIANCE IN A PROGRAM NOT UNACCEPTABLE TO FINRA. THE TRAINING MUST BE COMPLETED WITHIN SIX MONTHS AFTER THE ISSUANCE OF THE AWC. WITHIN 30 DAYS FOLLOWING COMPLETION OF THE TRAINING, AHMED MUST PROVIDE FINRA WITH WRITTEN PROOF OF COMPLETION. THE SUSPENSION IS IN EFFECT FROM MARCH 19, 2012 THROUGH MAY 17, 2012. FINE PAID IN FULL ON JULY 29, 2013.

[CONTINUED FROM ALLEGATIONS]: ADDITIONALLY, THE FIRM FAILED TO HAVE AN ADEQUATE TRAINING PROGRAM FOR FIRM PERSONNEL WITH RESPECT TO AML ISSUES IN 2007 AND 2008. ALTHOUGH THE 2008 ANNUAL COMPLIANCE MEETING SUPERFICIALLY TOUCHED ON AML, IT WAS NOT ADEQUATELY TAILORED TO THE FIRM'S BUSINESS. DURING THE MONTH END PERIOD OF MARCH THROUGH MAY AND EARLY JUNE 2009, THE FIRM CONDUCTED A SECURITIES BUSINESS DESPITE THE FACT THAT IT FAILED TO MAINTAIN ITS REQUIRED MINIMUM NET CAPITAL. THE FIRM FAILED TO CONDUCT ACCURATE NET CAPITAL COMPUTATIONS AND CONSEQUENTLY MAINTAINED DEFICIENT NET CAPITAL. THE INACCURATE COMPUTATIONS WERE PRIMARILY DUE TO INACCURATE NET CAPITAL TREATMENT OF A CLEARING FIRM DEPOSIT UPON TERMINATION OF THE CLEARING RELATIONSHIP, IMPROPER BOOKING OF EXPENSES AND LIABILITIES, AND THE FIRM'S FAILURE TO ACCURATELY CLASSIFY ALLOWABLE VERSUS NON ALLOWABLE ASSETS. BECAUSE OF THE ABOVE NOTED DISCREPANCIES, THE FIRM FAILED TO PREPARE AN ACCURATE GENERAL LEDGER AND TRIAL BALANCE AND QUARTERLY FOCUS REPORT FOR THE QUARTERS ASSOCIATED WITH THE NET CAPITAL DEFICIENCIES. AS THE FIRM'S FINOP, AHMED WAS AT ALL TIMES RESPONSIBLE FOR ENSURING THAT THE FIRM COMPLIED WITH ITS NET CAPITAL AND BOOKS AND RECORDS OBLIGATIONS AND CAUSED THE FIRM'S VIOLATIONS. THE FIRM AND AHMED FAILED TO ESTABLISH AND IMPLEMENT AN ADEQUATE SUPERVISORY SYSTEM AND ENFORCE ITS WRITTEN PROCEDURES IN SEVERAL AREAS. THE FIRM AND AHMED FAILED TO MAINTAIN CURRENT INFORMATION REGARDING FORMS U4 AND UNIFORM BRANCH OFFICE REGISTRATION (BR) AND FAILED TO OBTAIN FINGERPRINTS WHEN REQUIRED TO DO SO. THE FIRM AND AHMED ALSO FAILED TO PREVENT NON-REGISTERED INDIVIDUALS FROM ACTING IN A REGISTERED CAPACITY. THREE UNLICENSED INDIVIDUALS HAD DAY-TO-DAY RESPONSIBILITIES THAT REQUIRED THE FIRM TAKE THEIR FINGERPRINTS, YET THE FIRM FAILED TO DO SO. FURTHER, THE FIRM AND AHMED FAILED TO MAINTAIN ADVERTISING MATERIAL, FAILED TO TIMELY FILE ADVERTISING MATERIAL WITH FINRA ADVERTISING REGULATION, AND FAILED TO COMPLY WITH THE CONTENT STANDARDS FOR ADVERTISING MATERIAL. WITHOUT ADMITTING OR DENYING THE FINDINGS, AHMED CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE HE IS FINED $10,000, SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY PRINCIPAL CAPACITY FOR 60 DAYS, AND MUST COMPLETE 16 HOURS OF CONTINUING EDUCATION RELATED TO AML COMPLIANCE IN A PROGRAM NOT UNACCEPTABLE TO FINRA. THE TRAINING MUST BE COMPLETED WITHIN SIX MONTHS AFTER THE ISSUANCE OF THE AWC. WITHIN 30 DAYS FOLLOWING COMPLETION OF THE TRAINING, AHMED MUST PROVIDE FINRA WITH WRITTEN PROOF OF COMPLETION. THE SUSPENSION IS IN EFFECT FROM MARCH 19, 2012 THROUGH MAY 17, 2012.