GENESIS GLOBAL TRADING, INC - files.brokercheck.finra.org · GENESIS GLOBAL TRADING, INC SEC#...

BrokerCheck Report

GENESIS GLOBAL TRADING, INC

Section Title

Report Summary

Firm History

CRD# 136962

1

6

Firm Profile 2 - 5

Page(s)

Firm Operations 7 - 17

Disclosure Events 18

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CRD# 136962

SEC# 8-67055

Main Office Location

250 PARK AVENUE SOUTH, 5TH FLNEW YORK, NY 10003Regulated by FINRA New York Office

Mailing Address

250 PARK AVENUE SOUTH, 5TH FLNEW YORK, NY 10003

Business Telephone Number

212 668-5921

Report Summary for this Firm

This report summary provides an overview of the brokerage firm. Additional information for this firm can be foundin the detailed report.

Disclosure Events

Brokerage firms are required to disclose certaincriminal matters, regulatory actions, civil judicialproceedings and financial matters in which the firm orone of its control affiliates has been involved.

Are there events disclosed about this firm? Yes

The following types of disclosures have beenreported:

Type Count

Regulatory Event 3

Firm Profile

This firm is classified as a corporation.

This firm was formed in Delaware on 06/08/2005.

Its fiscal year ends in December.

Firm History

Information relating to the brokerage firm's historysuch as other business names and successions(e.g., mergers, acquisitions) can be found in thedetailed report.

Firm Operations

Is this brokerage firm currently suspended with anyregulator? No

This firm conducts 8 types of businesses.

This firm is affiliated with financial or investmentinstitutions.

This firm has referral or financial arrangements withother brokers or dealers.

This firm is registered with:

• the SEC• 1 Self-Regulatory Organization• 53 U.S. states and territories

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1©2019 FINRA. All rights reserved. Report about GENESIS GLOBAL TRADING, INC


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This firm is classified as a corporation.

This firm was formed in Delaware on 06/08/2005.

CRD#

This section provides the brokerage firm's full legal name, "Doing Business As" name, business and mailingaddresses, telephone number, and any alternate name by which the firm conducts business and where such name isused.

Firm Profile

Firm Names and Locations

Its fiscal year ends in December.


SEC#

136962

8-67055

Main Office Location

Mailing Address

Business Telephone Number

Doing business as GENESIS GLOBAL TRADING, INC

212 668-5921

Regulated by FINRA New York Office



Other Names of this Firm

Name Where is it used

GENESIS GLOBAL TRADING AK, AL, AR, AZ, CA,CO, CT, DC, DE, FL,GA, HI, IA, ID, IL, IN,KS, KY, LA, MA, MD,ME, MI, MN, MO,MS, MT, NC, ND, NE,NH, NJ, NM, NV, NY,OH, OK, OR, PA, PR,RI, SC, SD, TN, TX,UT, VA, VI, VT, WA,WI, WV, WY






This section provides information relating to all direct owners and executive officers of the brokerage firm.

Direct Owners and Executive Officers

Firm Profile

Position

Percentage of Ownership

Is this a public reportingcompany?

Position Start Date

Does this owner direct themanagement or policies ofthe firm?

DIGITAL CURRENCY GROUP INC

WHOLE OWNER

75% or more

No

Domestic Entity

07/2015

Yes

Is this a domestic or foreignentity or an individual?

Legal Name & CRD# (if any):

Position



Position Start Date


GARCIA, MARTIN ANTHONY JR.

MUNICIPAL SECURITIES PRINCIPAL

Less than 5%

No

Individual

04/2012

No

5449805



Position


Position Start Date

GARCIA, MARTIN ANTHONY JR.

CHIEF COMPLIANCE OFFICER

Less than 5%

Individual

01/2019

5449805








Direct Owners and Executive Officers (continued)

Firm Profile




Less than 5%

No

Yes

Position



Position Start Date


MORO, SOICHIRO

CEO & GENERAL SECURITIES PRINICPAL

Less than 5%

No

Individual

03/2016

Yes

4856668



Position



Position Start Date


PISETSKAYA, VIKTORIYA

FINANCIAL OPERATIONS PRINCIPAL

Less than 5%

No

Individual

07/2017

Yes








This section provides information relating to any indirect owners of the brokerage firm.

Indirect Owners

Firm Profile

DCG HOLDCO, INC

OWNER

DIGITAL CURRENCY GROUP INC

75% or more

No

Domestic Entity

07/2015

Yes



Company through whichindirect ownership isestablished

Relationship to Direct Owner

Relationship Established




SILBERT, BARRY EDWARD

UNITHOLDER & MANAGER

DCG HOLDCO, INC.

Other General Partners

No

Individual

08/2004

Yes

2477490



Company through whichindirect ownership isestablished

Relationship to Direct Owner

Relationship Established









Firm History

This section provides information relating to any successions (e.g., mergers, acquisitions) involving the firm.

No information reported.






Firm Operations

RegistrationsThis section provides information about the regulators (Securities and Exchange Commission (SEC), self-regulatoryorganizations (SROs), and U.S. states and territories) with which the brokerage firm is currently registered andlicensed, the date the license became effective, and certain information about the firm's SEC registration.

This firm is currently registered with the SEC, 1 SRO and 53 U.S. states and territories.

SEC Registration Questions

This firm is registered with the SEC as:

A broker-dealer:

A broker-dealer and government securities broker or dealer:

A government securities broker or dealer only:

This firm has ceased activity as a government securities broker or dealer:

Yes

No

No

No

Federal Regulator Status Date Effective

SEC Approved 04/04/2006

Self-Regulatory Organization Status Date Effective

FINRA Approved 04/04/2006






Firm Operations

Registrations (continued)

U.S. States &Territories

Status Date Effective

Alabama Approved 05/16/2006

Alaska Approved 05/10/2006

Arizona Approved 05/18/2006

Arkansas Approved 05/08/2006

California Approved 04/18/2006

Colorado Approved 04/21/2006

Connecticut Approved 05/17/2006

Delaware Approved 05/15/2008

District of Columbia Approved 04/23/2008

Florida Approved 06/14/2006

Georgia Approved 05/14/2008

Hawaii Approved 05/29/2008

Idaho Approved 04/18/2006

Illinois Approved 05/23/2006

Indiana Approved 05/19/2006

Iowa Approved 05/08/2008

Kansas Approved 05/28/2008

Kentucky Approved 04/24/2006

Louisiana Approved 04/25/2006

Maine Approved 08/11/2006

Maryland Approved 04/24/2008

Massachusetts Approved 05/03/2006

Michigan Approved 05/09/2006

Minnesota Approved 04/24/2006

Mississippi Approved 04/18/2006

Missouri Approved 07/24/2006

Montana Approved 05/01/2006

Nebraska Approved 10/27/2006

Nevada Approved 05/05/2006

New Hampshire Approved 05/14/2008

New Jersey Approved 05/18/2006

New Mexico Approved 05/28/2008

New York Approved 02/07/2006

U.S. States &Territories

Status Date Effective

North Carolina Approved 04/19/2006

North Dakota Approved 05/08/2008

Ohio Approved 05/15/2006

Oklahoma Approved 06/22/2006

Oregon Approved 05/09/2006

Pennsylvania Approved 04/25/2006

Puerto Rico Approved 05/14/2008

Rhode Island Approved 05/08/2008

South Carolina Approved 05/13/2008

South Dakota Approved 04/18/2006

Tennessee Approved 09/24/2008

Texas Approved 05/22/2006

Utah Approved 04/19/2006

Vermont Approved 05/22/2008

Virgin Islands Approved 03/25/2008

Virginia Approved 04/19/2006

Washington Approved 04/18/2006

West Virginia Approved 04/10/2008

Wisconsin Approved 06/26/2006

Wyoming Approved 05/16/2006






Firm Operations

Types of BusinessThis section provides the types of business, including non-securities business, the brokerage firm is engaged in orexpects to be engaged in.

Other Types of Business

This firm does effect transactions in commodities, commodity futures, or commodity options.This firm does engage in other non-securities business.

Non-Securities Business Description: NON-SECURITIES BUSINESS INCLUDES TRADING DIGITALCURRENCIES ON AN OVER THE COUNTER BASIS; AND TRANSACTINGAS AN ELIGIBLE CONTRACT PARTICIPANT (AS PRINCIPAL FOR ITS OWNACCOUNT), AS DEFINED IN SECTION 1A(1*) OF THE COMMODITYEXCHANGE ACT AND CFTC REGULATION 1.3(M), ON SWAP EXECUTIONFACILITIES SPECIALIZING IN DIGITAL CURRENCIES APPROVED BY THECFTC

This firm currently conducts 8 types of businesses.

Types of Business

Broker or dealer retailing corporate equity securities over-the-counter

Broker or dealer selling corporate debt securities

Underwriter or selling group participant (corporate securities other than mutual funds)

Municipal securities broker

Put and call broker or dealer or option writer

Trading securities for own account

Private placements of securities

Other - SECURITIES VALUATION SERVICES AND ADVISORY WORK; FACILITATING TRANSACTIONS INAPPROVED PRODUCT LINES;MUNICIPAL ADVISOR.






Firm Operations

Clearing Arrangements

This firm does not hold or maintain funds or securities or provide clearing services for other broker-dealer(s).

Introducing Arrangements

This firm does refer or introduce customers to other brokers and dealers.

Name: PERSHING LLC

Business Address: 1 PEESHING PLAZAJERSEY CITY, NJ 07399

CRD #: 7560

Effective Date: 04/25/2012

Description: GENESIS GLOBAL TRADING, INC. INTRODUCES CUSTOMERS ON AFULLY DISCLOSED BASIS TO PERSHING.("PERSHING") ON A PRIMARYBASIS. PERSHING PROVIDES TRADE, CUSTODIAL, CLEARING ANDSETTLEMENT RELATED SERVICES TO GENESIS GLOBAL TRADING, INC.AND ITS CUSTOMERS. GENESIS GLOBAL TRADING, INC. AND/ORCUSTOMER FUNDS AND SECURITIES MAY BE MAINTAINED ON DEPOSITWITH PERSHING OR ON THEIR BOOKS AND RECORDS PURSUANT TOTHE EXECUTED CLEARING AGREEMENT.






Firm Operations

Industry Arrangements

This firm does have books or records maintained by a third party.

This firm does have accounts, funds, or securities maintained by a third party.

This firm does have customer accounts, funds, or securities maintained by a third party.

Name: PERSHING LLC

Business Address: 1 PERSHING PLAZAJERSEY CITY, NJ 07399

CRD #: 7560


Description: GENESIS GLOBAL TRADING, INC. INTRODUCES CUSTOMERS ON AFULLY DISCLOSED BASIS TO PERSHING LLC.("PERSHING") ON APRIMARY BASIS. PERSHING PROVIDES TRADE, CUSTODIAL, CLEARINGAND SETTLEMENT RELATED SERVICES TO GENESIS GLOBAL TRADING,INC. AND ITS CUSTOMERS. GENESIS GLOBAL TRADING, INC. AND/ORCUSTOMER FUNDS AND SECURITIES MAY BE MAINTAINED ON DEPOSITWITH PERSHING OR ON THEIR BOOKS AND RECORDS PURSUANT TOTHE EXECUTED CLEARING AGREEMENT.

Name: PERSHING LLC


CRD #: 7560


Description: GENESIS GLOBAL TRADING, INC. INTRODUCES CUSTOMERS ON AFULLY DISCLOSED BASIS TO PERSHING LLC ON A PRIMARY BASIS.PERSHING PROVIDES TRADE, CUSTODIAL, CLEARING ANDSETTLEMENT RELATED SERVICES TO GENESIS GLOBAL TRADING, INC.AND ITS CUSTOMERS. GENESIS GLOBAL TRADING, INC. AND/ORCUSTOMER FUNDS AND SECURITIES MAY BE MAINTAINED ON DEPOSITWITH PERSHING OR ON THEIR BOOKS AND RECORDS PURSUANT TOTHE EXECUTED CLEARING AGREEMENT.

Name: PERSHING LLC


CRD #: 7560

Effective Date: 04/25/201211©2019 FINRA. All rights reserved. Report about GENESIS GLOBAL TRADING, INC





Firm Operations

Industry Arrangements (continued)

This firm does not have individuals who control its management or policies through agreement.

This firm does not have individuals who wholly or partly finance the firm's business.

Control Persons/Financing


Description: GENESIS GLOBAL TRADING, INC. INTRODUCES CUSTOMERS ON AFULLY DISCLOSED BASIS TO PERSHING LLC ON A PRIMARY BASIS.PERSHING PROVIDES TRADE, CUSTODIAL, CLEARING ANDSETTLEMENT RELATED SERVICES TO GENESIS GLOBAL TRADING, INC.AND ITS CUSTOMERS. GENESIS GLOBAL TRADING, INC. AND/ORCUSTOMER FUNDS AND SECURITIES MAY BE MAINTAINED ON DEPOSITWITH PERSHING OR ON THEIR BOOKS AND RECORDS PURSUANT TOTHE EXECUTED CLEARING AGREEMENT.






Firm Operations

Organization AffiliatesThis section provides information on control relationships the firm has with other firms in the securities, investmentadvisory, or banking business.

This firm is, directly or indirectly:

· in control of· controlled by· or under common control withthe following partnerships, corporations, or other organizations engaged in the securities or investmentadvisory business.

No

Yes

No

07/16/2018

636 AVENUE OF AMERICAS, 3RD FLNEW YORK, NY 10011

297636

GRAYSCALE SECURITIES, LLC is under common control with the firm.

GRAYSCALE SECURITIES IS COMMON CONTROL AS GENESIS GLOBALTRADING AS GRAYSCALE SECURITIES IS OWNED BY DCG.

Description:

Investment AdvisoryActivities:

Securities Activities:

Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

No

Yes

No

03/01/2018

636 AVENUE OF AMERICASNEW YORK, NY 10011

LITECOIN INVESTMENT TRUST is under common control with the firm.

GENESIS GLOBAL TRADING, INC. IS WHOLLY OWNED BY DIGITALCURRENCY GROUP, INC. DIGITAL CURRENCY GROUP, INC., WHOLLYOWNS GRAYSCALE INVESTEMENTS, LLC, WHICH IS THE SPONSOR OF THELITECOIN INVESTMENT TRUST. GENESIS GLOBAL TRADING, INC. SERVESAS THE DISTRIBUTING AND MARKET AGENT AND AUTHORIZEDPARTICIPANT OF THE LITECOIN INVESTMENT TRUST.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:






Firm Operations

Organization Affiliates (continued)

GENESIS GLOBAL TRADING, INC. IS WHOLLY OWNED BY DIGITALCURRENCY GROUP, INC. DIGITAL CURRENCY GROUP, INC., WHOLLYOWNS GRAYSCALE INVESTEMENTS, LLC, WHICH IS THE SPONSOR OF THELITECOIN INVESTMENT TRUST. GENESIS GLOBAL TRADING, INC. SERVESAS THE DISTRIBUTING AND MARKET AGENT AND AUTHORIZEDPARTICIPANT OF THE LITECOIN INVESTMENT TRUST.

No

Yes

No

03/01/2018

636 AVENUE OF AMERICASNEW YORK, NY 10011

BITCOIN CASH INVESTMENT TRUST is under common control with the firm.

GENESIS GLOBAL TRADING, INC. IS WHOLLY OWNED BY DIGITALCURRENCY GROUP, INC. DIGITAL CURRENCY GROUP, INC., WHOLLYOWNS GRAYSCALE INVESTEMENTS, LLC, WHICH IS THE SPONSOR OF THEBITCOIN CASH INVESTMENT TRUST. GENESIS GLOBAL TRADING, INC.SERVES AS THE DISTRIBUTING AND MARKET AGENT AND AUTHORIZEDPARTICIPANT OF THE BITCOIN CASH INVESTMENT TRUST.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

No

Yes

No

03/01/2018


XRP INVESTMENT TRUST is under common control with the firm.

GENESIS GLOBAL TRADING, INC. IS WHOLLY OWNED BY DIGITALCURRENCY GROUP, INC. DIGITAL CURRENCY GROUP, INC., WHOLLYOWNS GRAYSCALE INVESTEMENTS, LLC, WHICH IS THE SPONSOR OF THEXRP INVESTMENT TRUST. GENESIS GLOBAL TRADING, INC. SERVES ASTHE DISTRIBUTING AND MARKET AGENT AND AUTHORIZED PARTICIPANTOF THE XRP INVESTMENT TRUST.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:


DIGITAL LARGE CAP FUND is under common control with the firm.

Business Address: 14©2019 FINRA. All rights reserved. Report about GENESIS GLOBAL TRADING, INC





Firm Operations


No

Yes

No

02/01/2018


GENESIS GLOBAL TRADING, INC. IS WHOLLY OWNED BY DIGITALCURRENCY GROUP, INC. DIGITAL CURRENCY GROUP, INC., WHOLLYOWNS GRAYSCALE INVESTEMENTS, LLC, WHICH IS THE SPONSOR OF THEDIGITAL LARGE CAP FUND. GENESIS GLOBAL TRADING, INC. SERVES ASTHE DISTRIBUTING AND MARKET AGENT AND AUTHORIZED PARTICIPANTOF THE DIGITAL LARGE CAP FUND.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

No

Yes

No

10/24/2017


ZCASH INVESTMENT TRUST is under common control with the firm.

GENESIS GLOBAL TRADING, INC. IS WHOLLY OWNED BY DIGITALCURRENCY GROUP, INC. DIGITAL CURRENCY GROUP, INC., WHOLLYOWNS GRAYSCALE INVESTEMENTS, LLC, WHICH IS THE SPONSOR OF THEZCASH INVESTMENT TRUST. GENESIS GLOBAL TRADING, INC. SERVES ASTHE DISTRIBUTING AND MARKET AGENT AND AUTHORIZED PARTICIPANTOF THE ZCASH INVESTMENT TRUST.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

No

12/14/2017


ETHEREUM INVESTMENT TRUST is under common control with the firm.

Foreign Entity:

Effective Date:

Business Address:






Firm Operations


No

Yes

No

GENESIS GLOBAL TRADING, INC. IS WHOLLY OWNED BY DIGITALCURRENCY GROUP, INC. DIGITAL CURRENCY GROUP, INC., WHOLLYOWNS GRAYSCALE INVESTEMENTS, LLC, WHICH IS THE SPONSOR OF THEETHEREUM INVESTMENT TRUST. GENESIS GLOBAL TRADING, INC.SERVES AS THE DISTRIBUTING AND MARKET AGENT AND AUTHORIZEDPARTICIPANT OF THE ETHEREUM INVESTMENT TRUST.

Description:



Country:

Foreign Entity:

No

Yes

No

04/24/2017

636 AVENUE OF AMERICAS, 3RD FLOORNEW YORK, NY 10011

ETHEREUM CLASSIC TRUST is under common control with the firm.

GENESIS GLOBAL TRADING, INC. IS WHOLLY OWNED BY DIGITALCURRENCY GROUP, INC. DIGITAL CURRENCY GROUP, INC., WHOLLYOWNS GRAYSCALE INVESTEMENTS, LLC, WHICH IS THE SPONSOR OF THEETHEREUM INVESTMENT TRUST. GENESIS GLOBAL TRADING, INC.SERVES AS THE DISTRIBUTING AND MARKET AGENT AND AUTHORIZEDPARTICIPANT OF THE ETHEREUM INVESTMENT TRUST.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

No

Yes

No

09/13/2013

636 AVENUE OF THE AMERICASNEW YORK, NY 10011

BITCOIN INVESTMENT TRUST is under common control with the firm.



Country:

Foreign Entity:

Effective Date:

Business Address:






Firm Operations


No

GENESIS GLOBAL TRADING, INC. IS WHOLLY OWNED BY DIGITALCURRENCY GROUP, INC. DIGITAL CURRENCY GROUP, INC., WHOLLYOWNS GRAYSCALE INVESTEMENTS, LLC, WHICH IS THE SPONSOR OF THEBITCOIN INVESTMENT TRUST. GENESIS GLOBAL TRADING, INC. SERVESAS THE DISTRIBUTING AND MARKET AGENT AND AUTHORIZEDPARTICIPANT OF THE BITCOIN INVESTMENT TRUST.

Description:


No

Yes

No

05/29/2013

636 AVENUE OF THE AMERICAS, 3RD FLOORNEW YORK, NY 10011

GRAYSCALE INVESTMENTS, LLC is under common control with the firm.

GENESIS GLOBAL TRADING, INC. IS WHOLLY OWNED BY DIGITALCURRENCY GROUP, INC. DIGITAL CURRENCY GROUP, INC., WHOLLYOWNS GRAYSCALE INVESTEMENTS, LLC, WHICH IS THE SPONSOR OF THEBITCOIN INVESTMENT TRUST. GENESIS GLOBAL TRADING, INC. SERVESAS THE DISTRIBUTING AND MARKET AGENT AND AUTHORIZEDPARTICIPANT OF THE BITCOIN INVESTMENT TRUST.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

This firm is not directly or indirectly, controlled by the following:

· bank holding company· national bank· state member bank of the Federal Reserve System· state non-member bank· savings bank or association· credit union· or foreign bank






Disclosure Events

All firms registered to sell securities or provide investment advice are required to disclose regulatory actions, criminal orcivil judicial proceedings, and certain financial matters in which the firm or one of its control affiliates has been involved.For your convenience, below is a matrix of the number and status of disclosure events involving this brokerage firm orone of its control affiliates. Further information regarding these events can be found in the subsequent pages of thisreport.

Final On AppealPending

Regulatory Event 0 3 0






Disclosure Event Details

What you should know about reported disclosure events:

1. BrokerCheck provides details for any disclosure event that was reported in CRD. It also includessummary information regarding FINRA arbitration awards in cases where the brokerage firm wasnamed as a respondent.

2. Certain thresholds must be met before an event is reported to CRD, for example: o A law enforcement agency must file formal charges before a brokerage firm is required to disclose a

particular criminal event.3. Disclosure events in BrokerCheck reports come from different sources:

o Disclosure events for this brokerage firm were reported by the firm and/or regulators. When the firmand a regulator report information for the same event, both versions of the event will appear in theBrokerCheck report. The different versions will be separated by a solid line with the reporting sourcelabeled.

4. There are different statuses and dispositions for disclosure events: o A disclosure event may have a status of pending, on appeal, or final.

§ A "pending" event involves allegations that have not been proven or formally adjudicated.§ An event that is "on appeal" involves allegations that have been adjudicated but are currently

being appealed.§ A "final" event has been concluded and its resolution is not subject to change.

o A final event generally has a disposition of adjudicated, settled or otherwise resolved.§ An "adjudicated" matter includes a disposition by (1) a court of law in a criminal or civil matter,

or (2) an administrative panel in an action brought by a regulator that is contested by the partycharged with some alleged wrongdoing.

§ A "settled" matter generally involves an agreement by the parties to resolve the matter.Please note that firms may choose to settle customer disputes or regulatory matters forbusiness or other reasons.

§ A "resolved" matter usually involves no payment to the customer and no finding ofwrongdoing on the part of the individual broker. Such matters generally involve customerdisputes.

5. You may wish to contact the brokerage firm to obtain further information regarding any of thedisclosure events contained in this BrokerCheck report.

Regulatory - Final

This type of disclosure event involves (1) a final, formal proceeding initiated by a regulatory authority (e.g., a statesecurities 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 orsuspension of the authority of a brokerage firm or its control affiliate to act as an attorney, accountant or federalcontractor.

Disclosure 1 of 3

Reporting Source: Regulator

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOCOMPLY WITH CERTAIN FINANCIAL RULE REQUIREMENTS AND WITH THEREQUIREMENT TO DELIVER CONFIRMATIONS FOR CERTAINTRANSACTIONS IN VIOLATION OF SEC AND FINRA RULES. THE FINDINGSSTATED THAT SEC RULE 15C3-3 SETS FORTH CERTAIN REQUIREMENTSFOR A FIRM THAT, AMONG OTHER THINGS, HOLDS CUSTOMER FUNDS. THEFIRM WAS OPERATING PURSUANT TO SEC RULE 15C3-3K(2)(I), WHICHPROVIDES AN EXEMPTION FROM THESE REQUIREMENTS WHERE A FIRMDOES NOT HOLD CUSTOMER FUNDS. HOWEVER, THE FIRM FAILED, ININSTANCES, TO PROMPTLY TRANSMIT CUSTOMER FUNDS HELD IN THEFIRM'S SPECIAL ACCOUNT FOR THE EXCLUSIVE BENEFIT OF CUSTOMERSAS REQUIRED FOR FIRMS RELYING ON THE 15C3-3K(2)(I) EXEMPTION. AS ARESULT, THE FIRM WAS FULLY SUBJECT TO THE REQUIREMENTS OF SECRULE 15C3-3, INCLUDING BUT NOT LIMITED TO THE REQUIREMENT TOPERFORM CUSTOMER RESERVE COMPUTATIONS. BECAUSE THE FIRM DIDNOT FULLY COMPLY WITH THOSE REQUIREMENTS, THE FIRM VIOLATEDSEC RULE 15C3-3 AND FINRA RULE 2010. THE FINDINGS ALSO STATEDTHAT THE FIRM WAS REQUIRED TO, BUT FAILED TO MAKE AND DELIVERTRADE CONFIRMATIONS TO CUSTOMERS FOR TRANSACTIONS IN PRIVATEPLACEMENTS AND TENDER OFFERS. THE FINDINGS ALSO INCLUDED THATWHILE THE FIRM MAINTAINED AN OMNIBUS ACCOUNT THROUGH WHICH ITHELD CUSTOMER FUNDS IT DID NOT CORRECTLY COMPUTE ITSREQUIRED MINIMUM NET CAPITAL OR PERFORM CUSTOMER RESERVECOMPUTATIONS AS REQUIRED WHEN HOLDING CUSTOMER FUNDS. ITALSO FAILED TO ADHERE TO THE RESPONSIBILITIES PERTAINING TOPOSSESSION OR CONTROL OF SECURITIES INCLUDING MAINTAINING ASTOCK RECORD SHOWING OWNERSHIP AND LOCATION OF SECURITIES.

Current Status: Final






Initiated By: FINRA

Principal Sanction(s)/ReliefSought:

Other Sanction(s)/ReliefSought:

Date Initiated: 07/14/2016

Docket/Case Number: 2014039400801

Principal Product Type: Other

Other Product Type(s): PRIVATE PLACEMENTS AND TENDER OFFERS

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOCOMPLY WITH CERTAIN FINANCIAL RULE REQUIREMENTS AND WITH THEREQUIREMENT TO DELIVER CONFIRMATIONS FOR CERTAINTRANSACTIONS IN VIOLATION OF SEC AND FINRA RULES. THE FINDINGSSTATED THAT SEC RULE 15C3-3 SETS FORTH CERTAIN REQUIREMENTSFOR A FIRM THAT, AMONG OTHER THINGS, HOLDS CUSTOMER FUNDS. THEFIRM WAS OPERATING PURSUANT TO SEC RULE 15C3-3K(2)(I), WHICHPROVIDES AN EXEMPTION FROM THESE REQUIREMENTS WHERE A FIRMDOES NOT HOLD CUSTOMER FUNDS. HOWEVER, THE FIRM FAILED, ININSTANCES, TO PROMPTLY TRANSMIT CUSTOMER FUNDS HELD IN THEFIRM'S SPECIAL ACCOUNT FOR THE EXCLUSIVE BENEFIT OF CUSTOMERSAS REQUIRED FOR FIRMS RELYING ON THE 15C3-3K(2)(I) EXEMPTION. AS ARESULT, THE FIRM WAS FULLY SUBJECT TO THE REQUIREMENTS OF SECRULE 15C3-3, INCLUDING BUT NOT LIMITED TO THE REQUIREMENT TOPERFORM CUSTOMER RESERVE COMPUTATIONS. BECAUSE THE FIRM DIDNOT FULLY COMPLY WITH THOSE REQUIREMENTS, THE FIRM VIOLATEDSEC RULE 15C3-3 AND FINRA RULE 2010. THE FINDINGS ALSO STATEDTHAT THE FIRM WAS REQUIRED TO, BUT FAILED TO MAKE AND DELIVERTRADE CONFIRMATIONS TO CUSTOMERS FOR TRANSACTIONS IN PRIVATEPLACEMENTS AND TENDER OFFERS. THE FINDINGS ALSO INCLUDED THATWHILE THE FIRM MAINTAINED AN OMNIBUS ACCOUNT THROUGH WHICH ITHELD CUSTOMER FUNDS IT DID NOT CORRECTLY COMPUTE ITSREQUIRED MINIMUM NET CAPITAL OR PERFORM CUSTOMER RESERVECOMPUTATIONS AS REQUIRED WHEN HOLDING CUSTOMER FUNDS. ITALSO FAILED TO ADHERE TO THE RESPONSIBILITIES PERTAINING TOPOSSESSION OR CONTROL OF SECURITIES INCLUDING MAINTAINING ASTOCK RECORD SHOWING OWNERSHIP AND LOCATION OF SECURITIES.

Resolution Date: 07/14/2016

Resolution:

Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?

No

Acceptance, Waiver & Consent(AWC)





https://www.finra.org/industry/disciplinary-actions/finra-disciplinary-actions-online?search=2014039400801


Other Sanctions Ordered:

Sanction Details: THE FIRM WAS CENSURED AND FINED $50,000. FINE PAID IN FULL ON JULY20, 2016.


No

Sanctions Ordered: CensureMonetary/Fine $50,000.00

iReporting Source: Firm

Initiated By: FINRA


Censure


CENSURE AND MONETARY FINE OF $50,000.00




Other Product Type(s): FACILITATION OF PRIVATE PLACEMENTS AND TENDER OFFERS.

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE ENTRY OF FINDINGS THAT IT FAILED, IN 33 INSTANCES, TOPROMPTLY TRANSMIT CUSTOMER FUNDS HELD IN THE FIRM'S SPECIALACCOUNT FOR THE EXCLUSIVE BENEFIT OF CUSTOMERS IN VIOLATIONOF SEC RULE 15C3-3 AND FJNRA RULE 2010; FINDINGS THAT THE FIRMFAILED TO MAKE AND DELIVER TRADE CONFIRMATIONS TO CUSTOMERSFOR TRANSACTIONS IN PRIVATE PLACEMENTS AND TENDER OFFERS INVIOLATION OF SEC RULES 10B-10 AND 17A-3, AND FINRA RULES 2232 AND2010; AND FINDINGS THAT THROUGH THE MAINTENANCE OF AN OMNIBUSACCOUNT THROUGH WHICH IT HELD CUSTOMER FUNDS, THE FIRM FAILEDTO CORRECTLY COMPUTE ITS REQUIRED MINIMUM NET CAPITAL ORPERFORM CUSTOMER RESERVE COMPUTATIONS AND FAILED TO COMPLYWITH REQUIREMENTS PERTAINING TO POSSESSION OR CONTROL OFSECURITIES, IN VIOLATION OF SEC RULES 15C3-1 AND 15C3-3 AND FINRARULE 2010.









Resolution:


Sanction Details: THE FIRM IS CENSURED AND FINED $50,000.



Disclosure 2 of 3

i


Allegations: SEC ADMIN RELEASE 34-78282, JULY 11, 2016: THE SEC DEEMS ITAPPROPRIATE THAT CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBYARE, INSTITUTED PURSUANT TO SECTION 21C OF THE SECURITIESEXCHANGE ACT OF 1934 AGAINST SECONDMARKET, INC. IN ANTICIPATIONOF THE INSTITUTION OF THESE PROCEEDINGS, RESPONDENT HASSUBMITTED AN OFFER OF SETTLEMENT WHICH THE COMMISSION HASDETERMINED TO ACCEPT. SOLELY FOR THE PURPOSE OF THESEPROCEEDINGS AND ANY OTHER PROCEEDINGS BROUGHT BY OR ONBEHALF OF THE COMMISSION, OR TO WHICH THE COMMISSION IS APARTY, AND WITHOUT ADMITTING OR DENYING THE FINDINGS HEREIN,EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER IT AND THESUBJECT MATTER OF THESE PROCEEDINGS, WHICH ARE ADMITTED,RESPONDENT CONSENTS TO THE ENTRY OF THIS ORDER INSTITUTINGCEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTION 21C OF THEEXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSING A CEASE-AND-DESIST ORDER. ON THE BASIS OF THIS ORDER AND RESPONDENT'SOFFER, THE COMMISSION FINDS THAT SECONDMARKET IS THE SOLEAUTHORIZED PARTICIPANT ("AP") FOR A PRIVATE DELAWARE TRUST (THE "COMPANY") WHOSE SOLE ASSETS ARE BITCOINS AND AS SUCHSECONDMARKET IS THE ONLY ENTITY THAT MAY PLACE ORDERS TOCREATE AND REDEEM THE COMPANY SHARES. ACCORDING TO ITSPRIVATE PLACEMENT MEMORANDUM ("PPM"), THE COMPANY'SINVESTMENT OBJECTIVE IS FOR ITS SHARES TO REFLECT THEPERFORMANCE OF THE MARKET PRICE OF BITCOIN, LESS THE TRUST'SEXPENSES. ON SEPTEMBER 25, 2013, AN AFFILIATE OF SECONDMARKETCAPITALIZED THE COMPANY BY CONTRIBUTING 17,800 BITCOINS (VALUEDAT $2.25 MILLION AT THE TIME) TO IT IN EXCHANGE FOR 178,000 COMPANYSHARES. ALSO ON SEPTEMBER 25, 2013, PURSUANT TO RULE 506(C) OFREGULATION D UNDER THE SECURITIES ACT, THE COMPANY BEGANOFFERING SHARES TO ACCREDITED INVESTORS ON A CONTINUOUSBASIS. COMPANY SHARES ARE RESTRICTED SECURITIES AND,THEREFORE, SUBJECT TO RESALE RESTRICTIONS. THE COMPANY ISSUESSHARES IN "BASKETS," OR 100-SHARE BLOCKS, IN EXCHANGE FORDEPOSITS OF BITCOINS. THE COMPANY SHARES ARE OFFERED BY THE APAT THE COMPANY'S NET ASSET VALUE PER SHARE, WHICH ISCALCULATED BASED ON THE MARKET PRICE OF BITCOIN USING AFORMULA ESTABLISHED BY THE PPM. AS OF APRIL 29, 2016, THECOMPANY HAD A TOTAL OF 1,557,300 SHARES OUTSTANDING. INVESTORSIN THE COMPANY ACQUIRE SHARES IN THE OFFERING THROUGHSECONDMARKET. AS THE COMPANY'S SOLE AP, SECONDMARKET ACTS ASINTERMEDIARY FOR THE CREATION AND REDEMPTION OF SHARES BYINVESTORS. THERE IS NO LIMIT TO THE NUMBER OF COMPANY SHARESOFFERED AND BOTH THE COMPANY AND SECONDMARKET STAND READYTO TRANSFER COMPANY SHARES FROM THE ISSUER TO INVESTORS ATANY TIME. FROM THE COMPANY'S INCEPTION AND WITHOUT LIMITATION,THE PPM ESTABLISHED THAT SECONDMARKET WAS PERMITTED TOREDEEM SHARES (PURCHASED IN ITS CAPACITY AS THE COMPANY'S APAND FOR ITS OWN PROPRIETARY ACCOUNT). DURING THE PERIODNOVEMBER 4, 2013 THROUGH SEPTEMBER 4, 2014, THE COMPANYPURCHASED A TOTAL OF 6,479 ITS SHARES FROM SECONDMARKET INCONNECTION WITH REDEMPTIONS MADE BY SECONDMARKET. THECOMPANY'S OFFERING CONSTITUTES A DISTRIBUTION DUE TO ITSMAGNITUDE AND THE SPECIAL SELLING EFFORTS AND METHODS USEDTO FACILITATE THE DISTRIBUTION. SECONDMARKET, AS THE COMPANY'SAP, IS A "DISTRIBUTION PARTICIPANT" AND THE COMPANY'S SHARES ARE "COVERED SECURITIES," AS DEFINED BY REGULATION M. FURTHER, THERESTRICTED PERIOD FOR PURPOSES OF RULES 101 AND 102 OFREGULATION M IS ALSO CONTINUOUS. DURING THE PERIOD APRIL 2, 2014THROUGH SEPTEMBER 4, 2014, SECONDMARKET PURCHASED 85,721COMPANY SHARES FROM SHAREHOLDERS DURING THE RESTRICTEDPERIOD IN VIOLATION OF RULE 101 OF REGULATION M OF THE EXCHANGEACT, DURING THE PERIOD NOVEMBER 4, 2013 THROUGH SEPTEMBER 4,2014, THE COMPANY PURCHASED 6,479 COMPANY SHARES FROMSECONDMARKET DURING THE RESTRICTED PERIOD IN VIOLATION OFRULE 102 OF REGULATION M OF THE EXCHANGE ACT.







Initiated By: UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Cease and Desist



Docket/Case Number: 3-17335


Other Product Type(s): COMPANY SHARES

SEC ADMIN RELEASE 34-78282, JULY 11, 2016: THE SEC DEEMS ITAPPROPRIATE THAT CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBYARE, INSTITUTED PURSUANT TO SECTION 21C OF THE SECURITIESEXCHANGE ACT OF 1934 AGAINST SECONDMARKET, INC. IN ANTICIPATIONOF THE INSTITUTION OF THESE PROCEEDINGS, RESPONDENT HASSUBMITTED AN OFFER OF SETTLEMENT WHICH THE COMMISSION HASDETERMINED TO ACCEPT. SOLELY FOR THE PURPOSE OF THESEPROCEEDINGS AND ANY OTHER PROCEEDINGS BROUGHT BY OR ONBEHALF OF THE COMMISSION, OR TO WHICH THE COMMISSION IS APARTY, AND WITHOUT ADMITTING OR DENYING THE FINDINGS HEREIN,EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER IT AND THESUBJECT MATTER OF THESE PROCEEDINGS, WHICH ARE ADMITTED,RESPONDENT CONSENTS TO THE ENTRY OF THIS ORDER INSTITUTINGCEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTION 21C OF THEEXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSING A CEASE-AND-DESIST ORDER. ON THE BASIS OF THIS ORDER AND RESPONDENT'SOFFER, THE COMMISSION FINDS THAT SECONDMARKET IS THE SOLEAUTHORIZED PARTICIPANT ("AP") FOR A PRIVATE DELAWARE TRUST (THE "COMPANY") WHOSE SOLE ASSETS ARE BITCOINS AND AS SUCHSECONDMARKET IS THE ONLY ENTITY THAT MAY PLACE ORDERS TOCREATE AND REDEEM THE COMPANY SHARES. ACCORDING TO ITSPRIVATE PLACEMENT MEMORANDUM ("PPM"), THE COMPANY'SINVESTMENT OBJECTIVE IS FOR ITS SHARES TO REFLECT THEPERFORMANCE OF THE MARKET PRICE OF BITCOIN, LESS THE TRUST'SEXPENSES. ON SEPTEMBER 25, 2013, AN AFFILIATE OF SECONDMARKETCAPITALIZED THE COMPANY BY CONTRIBUTING 17,800 BITCOINS (VALUEDAT $2.25 MILLION AT THE TIME) TO IT IN EXCHANGE FOR 178,000 COMPANYSHARES. ALSO ON SEPTEMBER 25, 2013, PURSUANT TO RULE 506(C) OFREGULATION D UNDER THE SECURITIES ACT, THE COMPANY BEGANOFFERING SHARES TO ACCREDITED INVESTORS ON A CONTINUOUSBASIS. COMPANY SHARES ARE RESTRICTED SECURITIES AND,THEREFORE, SUBJECT TO RESALE RESTRICTIONS. THE COMPANY ISSUESSHARES IN "BASKETS," OR 100-SHARE BLOCKS, IN EXCHANGE FORDEPOSITS OF BITCOINS. THE COMPANY SHARES ARE OFFERED BY THE APAT THE COMPANY'S NET ASSET VALUE PER SHARE, WHICH ISCALCULATED BASED ON THE MARKET PRICE OF BITCOIN USING AFORMULA ESTABLISHED BY THE PPM. AS OF APRIL 29, 2016, THECOMPANY HAD A TOTAL OF 1,557,300 SHARES OUTSTANDING. INVESTORSIN THE COMPANY ACQUIRE SHARES IN THE OFFERING THROUGHSECONDMARKET. AS THE COMPANY'S SOLE AP, SECONDMARKET ACTS ASINTERMEDIARY FOR THE CREATION AND REDEMPTION OF SHARES BYINVESTORS. THERE IS NO LIMIT TO THE NUMBER OF COMPANY SHARESOFFERED AND BOTH THE COMPANY AND SECONDMARKET STAND READYTO TRANSFER COMPANY SHARES FROM THE ISSUER TO INVESTORS ATANY TIME. FROM THE COMPANY'S INCEPTION AND WITHOUT LIMITATION,THE PPM ESTABLISHED THAT SECONDMARKET WAS PERMITTED TOREDEEM SHARES (PURCHASED IN ITS CAPACITY AS THE COMPANY'S APAND FOR ITS OWN PROPRIETARY ACCOUNT). DURING THE PERIODNOVEMBER 4, 2013 THROUGH SEPTEMBER 4, 2014, THE COMPANYPURCHASED A TOTAL OF 6,479 ITS SHARES FROM SECONDMARKET INCONNECTION WITH REDEMPTIONS MADE BY SECONDMARKET. THECOMPANY'S OFFERING CONSTITUTES A DISTRIBUTION DUE TO ITSMAGNITUDE AND THE SPECIAL SELLING EFFORTS AND METHODS USEDTO FACILITATE THE DISTRIBUTION. SECONDMARKET, AS THE COMPANY'SAP, IS A "DISTRIBUTION PARTICIPANT" AND THE COMPANY'S SHARES ARE "COVERED SECURITIES," AS DEFINED BY REGULATION M. FURTHER, THERESTRICTED PERIOD FOR PURPOSES OF RULES 101 AND 102 OFREGULATION M IS ALSO CONTINUOUS. DURING THE PERIOD APRIL 2, 2014THROUGH SEPTEMBER 4, 2014, SECONDMARKET PURCHASED 85,721COMPANY SHARES FROM SHAREHOLDERS DURING THE RESTRICTEDPERIOD IN VIOLATION OF RULE 101 OF REGULATION M OF THE EXCHANGEACT, DURING THE PERIOD NOVEMBER 4, 2013 THROUGH SEPTEMBER 4,2014, THE COMPANY PURCHASED 6,479 COMPANY SHARES FROMSECONDMARKET DURING THE RESTRICTED PERIOD IN VIOLATION OFRULE 102 OF REGULATION M OF THE EXCHANGE ACT.








Resolution:

Other Sanctions Ordered: PREJUDGMENT INTEREST

Sanction Details: THE FIRM IS ORDERED TO CEASE AND DESIST AND SHALL PAYDISGORGEMENT OF $51,650.11 AND PREJUDGMENT INTEREST OF$2,105.68.

Regulator Statement IN DETERMINING TO ACCEPT THE OFFER, THE COMMISSION CONSIDEREDRESPONDENT'S RELIANCE ON COUNSEL. SPECIFICALLY, PRIOR TO THEIMPLEMENTATION OF THE COMPANY'S SHAREHOLDER REDEMPTIONPROGRAM, SECONDMARKET SOUGHT AND RECEIVED LEGAL ADVICEREGARDING THE DEVELOPMENT AND IMPLEMENTATION OF THATPROGRAM.IN VIEW OF THE FOREGOING, THE COMMISSION DEEMS IT APPROPRIATETO IMPOSE THE SANCTIONS AGREED TO IN RESPONDENT'S OFFER.ACCORDINGLY, IT IS HEREBY ORDERED THAT PURSUANT TO 21C OF THEEXCHANGE ACT, RESPONDENT SECONDMARKET CEASE AND DESISTFROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTUREVIOLATIONS OF RULE 101 OF REGULATION M OF THE EXCHANGE ACT. IT ISFURTHER ORDERED THAT RESPONDENT SECONDMARKET SHALL, WITHINTEN DAYS OF THE ENTRY OF THIS ORDER, PAY DISGORGEMENT OF$51,650.11 AND PREJUDGMENT INTEREST OF $2,105.68, FOR A TOTAL OF$53,755.79, TO THE SEC.


No

Sanctions Ordered: Disgorgement/RestitutionCease and Desist/Injunction

Order


Allegations: FROM APRIL 2014 THROUGH SEPTEMBER 2014, THE FIRM, IN ITS ROLE ASTHE AUTHORIZED PARTICIPANT OF THE BITCOIN INVESTMENT TRUST(BIT), PURCHASED BIT SHARES FROM BIT SHAREHOLDERS AS PART OF ASHAREHOLDER REDEMPTION PROGRAM. THE PURCHASES OCCURREDDURING THE RESTRICTED PERIOD IN VIOLATION OF RULE 101 OFREGULATION M. ALSO AS PART OF THE REDEMPTION PROGRAM, FROMNOVEMBER 2013 THROUGH SEPTEMBER 2014, BIT PURCHASED BITSHARES FROM THE FIRM DURING THE RESTRICTED PERIOD IN VIOLATIONOF RULE 102 OF REGULATION M. PRIOR TO THE IMPLEMENTATION OF THEBIT SHAREHOLDER REDEMPTION PROGRAM, THE FIRM AND BIT SOUGHTAND RECEIVED LEGAL ADVICE REGARDING THE DEVELOPMENT ANDIMPLEMENTATION OF THE REDEMPTION PROGRAM.







Initiated By: SECURITIES AND EXCHANGE COMMISSION


Cease and Desist


DISGORGEMENT OF $53755.79.


Docket/Case Number: 3-17335


Other Product Type(s): PRIVATE SECURITY

FROM APRIL 2014 THROUGH SEPTEMBER 2014, THE FIRM, IN ITS ROLE ASTHE AUTHORIZED PARTICIPANT OF THE BITCOIN INVESTMENT TRUST(BIT), PURCHASED BIT SHARES FROM BIT SHAREHOLDERS AS PART OF ASHAREHOLDER REDEMPTION PROGRAM. THE PURCHASES OCCURREDDURING THE RESTRICTED PERIOD IN VIOLATION OF RULE 101 OFREGULATION M. ALSO AS PART OF THE REDEMPTION PROGRAM, FROMNOVEMBER 2013 THROUGH SEPTEMBER 2014, BIT PURCHASED BITSHARES FROM THE FIRM DURING THE RESTRICTED PERIOD IN VIOLATIONOF RULE 102 OF REGULATION M. PRIOR TO THE IMPLEMENTATION OF THEBIT SHAREHOLDER REDEMPTION PROGRAM, THE FIRM AND BIT SOUGHTAND RECEIVED LEGAL ADVICE REGARDING THE DEVELOPMENT ANDIMPLEMENTATION OF THE REDEMPTION PROGRAM.


Resolution:


Sanction Details: DISGORGEMENT OF $53,756.79, WHICH REPRESENTS FEES EARNED BYFIRM IN CONNECTION TO THE SHAREHOLDER REDEMPTIONS PLUSPREJUDGMENT INTEREST.

Sanctions Ordered: Disgorgement/RestitutionCease and Desist/Injunction

Decision & Order of Offer of Settlement

Disclosure 3 of 3

i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TORETAIN, AND DELIVER TO ITS EMAIL ARCHIVING PROVIDER, INFORMATIONAS TO WHICH EMAIL ADDRESSES WERE BLIND CARBON COPIED. THEFINDINGS STATED THAT THE FIRM'S FAILURE BEGAN WHEN IT INSTALLED ANEW E-MAIL SERVER WITHOUT ENSURING IT WAS PROPERLYCONFIGURED AND ENDED WHEN IT REPLACED THAT SERVER OVERTHREE YEARS LATER. DURING THIS PERIOD, FIRM EMPLOYEES SENT758,933 EMAILS, HOWEVER THE FIRM FAILED TO RETAIN INFORMATIONIDENTIFYING WHO RECEIVED A BLIND CARBON COPY.







Initiated By: FINRA


Other


N/A



Principal Product Type: No Product

Other Product Type(s):

WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TORETAIN, AND DELIVER TO ITS EMAIL ARCHIVING PROVIDER, INFORMATIONAS TO WHICH EMAIL ADDRESSES WERE BLIND CARBON COPIED. THEFINDINGS STATED THAT THE FIRM'S FAILURE BEGAN WHEN IT INSTALLED ANEW E-MAIL SERVER WITHOUT ENSURING IT WAS PROPERLYCONFIGURED AND ENDED WHEN IT REPLACED THAT SERVER OVERTHREE YEARS LATER. DURING THIS PERIOD, FIRM EMPLOYEES SENT758,933 EMAILS, HOWEVER THE FIRM FAILED TO RETAIN INFORMATIONIDENTIFYING WHO RECEIVED A BLIND CARBON COPY.


Resolution:


Sanction Details: THE FIRM IS CENSURED AND FINED $100,000.00.

FINE PAID IN FULL ON JANUARY 6, 2015.


No




Initiated By: FINRA




Allegations: FAILURE TO CAPTURE BCC. EMAILS FROM 2006-2010










Other


AWC ON 12/23/14 IN CONJUNCTION WITH COMPLAINT NUMBER2011029759901


Other Product Type(s): EMAIL RETENTION


Resolution:

Other Sanctions Ordered: NONE

Sanction Details: FINE PAID.

Firm Statement FIRM SERVER DID NOT CATURE BCC. EMAILS. NOTICED WHEN THE FIRMCHANGED TO A NEW SERVER IN SEPTEMBER 2010.








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