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BrokerCheck Report
QUESTAR CAPITAL CORPORATION
Section Title
Report Summary
Firm History
CRD# 43100
1
10
Firm Profile 2 - 9
Page(s)
Firm Operations 11 - 21
Disclosure Events 22
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QUESTAR CAPITAL CORPORATION
CRD# 43100
SEC# 8-50174
Main Office Location
5701 GOLDEN HILLS DRIVEMINNEAPOLIS, MN 55416Regulated by FINRA Kansas City Office
Mailing Address
P O BOX 59177MINNEAPOLIS, MN 55459-0177
Business Telephone Number
888-446-5872
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 8
Arbitration 1
Firm Profile
This firm is classified as a corporation.
This firm was formed in Minnesota on 02/15/2007.
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 15 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• 51 U.S. states and territories
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1©2018 FINRA. All rights reserved. Report about QUESTAR CAPITAL CORPORATION
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This firm is classified as a corporation.
This firm was formed in Minnesota on 02/15/2007.
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.
QUESTAR CAPITAL CORPORATION
SEC#
43100
8-50174
Main Office Location
Mailing Address
Business Telephone Number
Doing business as QUESTAR CAPITAL CORPORATION
888-446-5872
Regulated by FINRA Kansas City Office
5701 GOLDEN HILLS DRIVEMINNEAPOLIS, MN 55416
P O BOX 59177MINNEAPOLIS, MN 55459-0177
2©2018 FINRA. All rights reserved. Report about QUESTAR CAPITAL CORPORATION
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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?
YORKTOWN FINANCIAL COMPANIES, INC. - INDIANA
SHAREHOLDER
75% or more
No
Domestic Entity
02/2001
Yes
Is this a domestic or foreignentity or an individual?
Legal Name & CRD# (if any):
Position
Percentage of Ownership
Is this a public reportingcompany?
Position Start Date
Does this owner direct themanagement or policies ofthe firm?
BRAUN, BARBARA J
CHIEF TECHNOLOGY AND EXECUTIVE PROJECTS OFFICER
Less than 5%
No
Individual
09/2017
Yes
6839583
Is this a domestic or foreignentity or an individual?
Legal Name & CRD# (if any):
Position
Percentage of Ownership
Position Start Date
BURNS, THOMAS PATRICK
CHAIRMAN
Less than 5%
Individual
12/2007
1028109
Is this a domestic or foreignentity or an individual?
Legal Name & CRD# (if any):
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Direct Owners and Executive Officers (continued)
Firm Profile
Percentage of Ownership
Is this a public reportingcompany?
Does this owner direct themanagement or policies ofthe firm?
Less than 5%
No
Yes
Position
Percentage of Ownership
Is this a public reportingcompany?
Position Start Date
Does this owner direct themanagement or policies ofthe firm?
DIAN, MATTHEW CHRISTOPHER
CHIEF OPERATING AND SUPERVISION OFFICER
Less than 5%
No
Individual
09/2015
Yes
2246088
Is this a domestic or foreignentity or an individual?
Legal Name & CRD# (if any):
Position
Percentage of Ownership
Is this a public reportingcompany?
Position Start Date
Does this owner direct themanagement or policies ofthe firm?
DU MOND, SHARON LEA
PRESIDENT, CHIEF EXECUTIVE OFFICER, DIRECTOR
Less than 5%
No
Individual
07/2015
Yes
2134316
Is this a domestic or foreignentity or an individual?
Legal Name & CRD# (if any):
GAUMOND, WILLIAM EDWARD
5294073
Legal Name & CRD# (if any):
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Direct Owners and Executive Officers (continued)
Firm Profile
Position
Percentage of Ownership
Is this a public reportingcompany?
Position Start Date
Does this owner direct themanagement or policies ofthe firm?
DIRECTOR
Less than 5%
No
Individual
01/2016
Yes
5294073
Is this a domestic or foreignentity or an individual?
Position
Percentage of Ownership
Is this a public reportingcompany?
Position Start Date
Does this owner direct themanagement or policies ofthe firm?
HALVERSON, AMY CATHERINE
CHIEF FINANCIAL OFFICER
Less than 5%
No
Individual
04/2016
Yes
3231087
Is this a domestic or foreignentity or an individual?
Legal Name & CRD# (if any):
Position
Percentage of Ownership
Position Start Date
Does this owner direct themanagement or policies ofthe firm?
LORD-KRAHN, KRISTINE MARIE
CHIEF LEGAL OFFICER, SECRETARY
Less than 5%
Individual
10/2005
Yes
4241291
Is this a domestic or foreignentity or an individual?
Legal Name & CRD# (if any):
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Direct Owners and Executive Officers (continued)
Firm Profile
Is this a public reportingcompany?
Does this owner direct themanagement or policies ofthe firm?
No
Yes
Position
Percentage of Ownership
Is this a public reportingcompany?
Position Start Date
Does this owner direct themanagement or policies ofthe firm?
MATZ, DARCY LYN
CHIEF FIELD DEVELOPMENT AND MARKETING OFFICER
Less than 5%
No
Individual
11/2015
Yes
4847207
Is this a domestic or foreignentity or an individual?
Legal Name & CRD# (if any):
Position
Percentage of Ownership
Is this a public reportingcompany?
Position Start Date
Does this owner direct themanagement or policies ofthe firm?
STARKMAN, KRISTINE ALANE
CHIEF COMPLIANCE OFFICER
Less than 5%
No
Individual
09/2017
Yes
2409241
Is this a domestic or foreignentity or an individual?
Legal Name & CRD# (if any):
WHITE, WALTER REX
IndividualIs this a domestic or foreignentity or an individual?
Legal Name & CRD# (if any):
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Direct Owners and Executive Officers (continued)
Firm Profile
Position
Percentage of Ownership
Is this a public reportingcompany?
Position Start Date
Does this owner direct themanagement or policies ofthe firm?
DIRECTOR
Less than 5%
No
Individual
02/2009
Yes
Is this a domestic or foreignentity or an individual?
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This section provides information relating to any indirect owners of the brokerage firm.
Indirect Owners
Firm Profile
ALLIANZ EUROPE B.V.
SHAREHOLDER
ALLIANZ OF AMERICA, INC.
75% or more
No
Foreign Entity
06/2012
Yes
Legal Name & CRD# (if any):
Is this a domestic or foreignentity or an individual?
Company through whichindirect ownership isestablished
Relationship to Direct Owner
Relationship Established
Percentage of Ownership
Does this owner direct themanagement or policies ofthe firm?
Is this a public reportingcompany?
ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
SHAREHOLDER
YORKTOWN FINANCIAL COMPANIES, INC. INDIANA
75% or more
No
Domestic Entity
11/2005
Yes
Legal Name & CRD# (if any):
Is this a domestic or foreignentity or an individual?
Company through whichindirect ownership isestablished
Relationship to Direct Owner
Relationship Established
Percentage of Ownership
Does this owner direct themanagement or policies ofthe firm?
Is this a public reportingcompany?
ALLIANZ OF AMERICA INC
ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Domestic Entity
Legal Name & CRD# (if any):
Is this a domestic or foreignentity or an individual?
Company through whichindirect ownership isestablished
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Indirect Owners (continued)
Firm Profile
SHAREHOLDER
ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
75% or more
No
04/1996
Yes
Company through whichindirect ownership isestablished
Relationship to Direct Owner
Relationship Established
Percentage of Ownership
Does this owner direct themanagement or policies ofthe firm?
Is this a public reportingcompany?
ALLIANZ SOCIETAS EUROPAEA
SHAREHOLDER
ALLIANZ EUROPE B.V.
75% or more
No
Foreign Entity
06/2012
Yes
Legal Name & CRD# (if any):
Is this a domestic or foreignentity or an individual?
Company through whichindirect ownership isestablished
Relationship to Direct Owner
Relationship Established
Percentage of Ownership
Does this owner direct themanagement or policies ofthe firm?
Is this a public reportingcompany?
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Firm History
This section provides information relating to any successions (e.g., mergers, acquisitions) involving the firm.
No information reported.
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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 51 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
Yes
No
No
Federal Regulator Status Date Effective
SEC Approved 02/15/2007
Self-Regulatory Organization Status Date Effective
FINRA Approved 07/07/1997
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Firm Operations
Registrations (continued)
U.S. States &Territories
Status Date Effective
Alabama Approved 07/02/1998
Alaska Approved 10/01/1997
Arizona Approved 09/03/1997
Arkansas Approved 05/23/2001
California Approved 09/02/1997
Colorado Approved 07/24/1997
Connecticut Approved 02/03/1999
Delaware Approved 05/03/1999
District of Columbia Approved 08/30/1997
Florida Approved 08/07/1997
Georgia Approved 08/18/1997
Hawaii Approved 01/24/2002
Idaho Approved 05/13/1999
Illinois Approved 08/07/1997
Indiana Approved 09/02/1997
Iowa Approved 05/13/1998
Kansas Approved 04/10/1998
Kentucky Approved 02/17/1998
Louisiana Approved 12/07/2000
Maine Approved 07/31/2000
Maryland Approved 09/16/1997
Massachusetts Approved 10/01/1997
Michigan Approved 07/18/1997
Minnesota Approved 03/03/1998
Mississippi Approved 07/13/1999
Missouri Approved 06/24/1998
Montana Approved 04/17/1998
Nebraska Approved 07/02/1999
Nevada Approved 10/20/1998
New Hampshire Approved 10/24/1997
New Jersey Approved 09/03/1997
New Mexico Approved 08/21/1998
New York Approved 09/12/1997
U.S. States &Territories
Status Date Effective
North Carolina Approved 10/30/1997
North Dakota Approved 08/04/2000
Ohio Approved 07/16/1997
Oklahoma Approved 06/04/1998
Oregon Approved 01/11/1999
Pennsylvania Approved 09/16/1997
Rhode Island Approved 03/23/1998
South Carolina Approved 08/19/1997
South Dakota Approved 12/06/1999
Tennessee Approved 08/11/1997
Texas Approved 10/17/1997
Utah Approved 09/18/1997
Vermont Approved 07/16/2001
Virginia Approved 08/27/1997
Washington Approved 01/01/1999
West Virginia Approved 11/10/1997
Wisconsin Approved 09/04/1997
Wyoming Approved 04/07/1998
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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 not effect transactions in commodities, commodity futures, or commodity options.This firm does engage in other non-securities business.
Non-Securities Business Description: INSURANCE, EQUITY INDEXED ANNUITIES
This firm currently conducts 15 types of businesses.
Types of Business
Broker or dealer retailing corporate equity securities over-the-counter
Broker or dealer selling corporate debt securities
Mutual fund retailer
U S. government securities broker
Municipal securities broker
Broker or dealer selling variable life insurance or annuities
Solicitor of time deposits in a financial institution
Put and call broker or dealer or option writer
Broker or dealer selling tax shelters or limited partnerships in primary distributions
Broker or dealer selling tax shelters or limited partnerships in the secondary market
Non-exchange member arranging for transactions in listed securities by exchange member
Private placements of securities
Broker or dealer involved in a networking, kiosk or similar arrangment with a: bank, savings bank or association, orcredit union
Broker or dealer involved in a networking, kiosk or similar arrangment with a: insurance company or agency
Other - THE FIRM WILL OFFER AND SELL REAL ESTATE INVESTMENT TRUSTS.
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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: 1515 WEST 22ND STREETOAK BROOK, IL 60521
CRD #: 7560
Effective Date: 05/05/1997
Description: APPLICANT IS A FULLY DISCLOSED, INTRODUCING BROKER DEALERWITH AN AGREEMENT WITH PERSHING LLC FOR CLEARINGBROKERAGE TRANSACTIONS
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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.
Name: BUSINESS DATA RECORD SERVICES
Business Address: 201 9TH AVENUE SWNEW BRIGHTON, MN 55112
Effective Date: 12/01/2006
Description: APPLICANT HAS AN AGREEMENT WITH BDRS FOR OFF-SITE RECORDSSTORAGE FOR BOOKS AND RECORDS OF THE FIRM INCLUDINGCUSTOMER FILES AND REGISTERED REPRESENTATIVE FILES.
Name: THE CARLYLE GROUP
Business Address: 1001 PENNSYLVANIA AVENUE NWWASHINGTON, DC 20004
Effective Date: 01/20/2003
Description: SERVICE PROVIDER CONTRACTED FOR STORAGE OF ELECTRONICCOMMUNICATIONS (EMAIL)
Name: ACCUITY, INC.
Business Address: 10089 WILLOW CREEK ROADSUITE 120SAN DIEGO, CA 92131
Effective Date: 01/01/2007
Description: SERVICE PROVIDER CONTRACTED FOR RETENTION OF BOOKS ANDRECORDS RELATED TO COMPLIANCE INSPECTIONS AND AUDITS
Name: PERSHING LLC
Business Address: 1515 WEST 22ND STREETSUITE 1000OAK BROOK, IL 60521
CRD #: 7560
Effective Date: 05/05/1997
Description: APPLICANT IS A FULLY DISCLOSED, INTRODUCING BROKER DEALERWITH AN AGREEMENT WITH PERSHING LLC FOR CLEARINGBROKERAGE TRANSACTIONS
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Firm Operations
Industry Arrangements (continued)
This firm does have customer accounts, funds, or securities maintained by a third party.
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
Name: PERSHING LLC
Business Address: 1515 WEST 22ND STREETSUITE 1000OAK BROOK, IL 60521
CRD #: 7560
Effective Date: 05/05/1997
Description: APPLICANT IS A FULLY DISCLOSED, INTRODUCING BROKER DEALERWITH AN AGREEMENT WITH PERSHING LLC FOR CLEARINGBROKERAGE TRANSACTIONS
Name: PERSHING LLC
Business Address: 1515 WEST 22ND STREETSUITE 1000OAK BROOK, IL 60521
CRD #: 7560
Effective Date: 05/05/1997
Description: APPLICANT IS A FULLY DISCLOSED, INTRODUCING BROKER DEALERWITH AN AGREEMENT WITH PERSHING LLC FOR CLEARINGBROKERAGE TRANSACTIONS
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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.
Yes
No
No
04/01/2018
1633 BROADWAYNEW YORK, NY 10019
161684
ALLIANZ CAPITAL PARTNERS OF AMERICA LLC is under common control with the firm.
FIRM IS UNDER COMMON CONTROL WITH QUESTAR CAPITALCORPORATION
Description:
Investment AdvisoryActivities:
Securities Activities:
Country:
Foreign Entity:
Effective Date:
Business Address:
CRD #:
Yes
No
HONG KONG
Yes
09/15/2017
27TH FL, ICBC TOWER3 GARDEN ROAD, CENTRALHONG KONG, HONG KONG
289358
ALLIANZ GLOBAL INVESTORS ASIA PACIFIC LIMITED is under common control with the firm.
ALLIANZ SE INDIRECTLY OWNS THE APPLICANT AND ALLIANZ GLOBALINVESTORS ASIA PACIFIC LIMITED
Description:
Investment AdvisoryActivities:
Securities Activities:
Country:
Foreign Entity:
Effective Date:
Business Address:
CRD #:
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Firm Operations
Organization Affiliates (continued)ALLIANZ SE INDIRECTLY OWNS THE APPLICANT AND ALLIANZ GLOBALINVESTORS ASIA PACIFIC LIMITED
Description:
Yes
Yes
PARENT ORGANIZATION: GERMANY AND EUROPEAN UNION
Yes
11/17/2005
GROUP: KOENIGINSTRASSE 28 D-80802MUNICH, GERMANY
ALLIANZ GROUP FOREIGN SECURITIES OR INVESTMENT ADVISER ENTITIES is under common control withthe firm.
APPLICANT IS PART OF A LARGE GROUP OF COMPANIES INCLUDINGFOREIGN BROKER-DEALERS AND ADVISERS NOT INVOLVED INAPPLICANT'S BUSINESS. APPLICANT DOES NOT DO BUSINESS ORCONDUCT JOINT OPERATIONS WITH OR PROVIDE SERVICES TO THESEFOREIGN ENTITIES; THE ENTITIES DO NOT PROVIDE SERVICES TOAPPLICANT; THE ENTITIES DO NOT FORMULATE APPLICANT'SRECOMMENDATIONS; AND THERE IS NO POTENTIAL CONFLICT OFINTEREST BETWEEN THE ENTITIES AND APPLICANT'S CUSTOMERS.
Description:
Investment AdvisoryActivities:
Securities Activities:
Country:
Foreign Entity:
Effective Date:
Business Address:
No
Yes
No
06/27/2011
1633 BROADWAYNEW YORK, NY 10019
25567
ALLIANZ GLOBAL INVESTORS DISTRIBUTORS LLC is under common control with the firm.
FIRM IS UNDER COMMON CONTROL WITH QUESTAR CAPITALCORPORATION
Description:
Investment AdvisoryActivities:
Securities Activities:
Country:
Foreign Entity:
Effective Date:
Business Address:
CRD #:
104559
PACIFIC INVESTMENT MANAGEMENT COMPANY LLC is under common control with the firm.
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Firm Operations
Organization Affiliates (continued)
Yes
No
No
11/17/2005
650 NEWPORT CENTER DRIVENEWPORT BEACH, CA 92660
104559
FIRM IS UNDER COMMON CONTROL WITH QUESTAR CAPITALCORPORATION
Description:
Investment AdvisoryActivities:
Securities Activities:
Country:
Foreign Entity:
Effective Date:
Business Address:
CRD #:
Yes
No
No
12/31/2012
1633 BROADWAYNEW YORK, NY 10019
149003
ALLIANZ GLOBAL INVESTORS U.S. LLC is under common control with the firm.
FIRM IS UNDER COMMON CONTROL WITH QUESTAR CAPITALCORPORATION
Description:
Investment AdvisoryActivities:
Securities Activities:
Country:
Foreign Entity:
Effective Date:
Business Address:
CRD #:
No
06/27/2011
1633 BROADWAY45TH FLOORNEW YORK, NY 10019
154957
PIMCO INVESTMENTS LLC is under common control with the firm.
Country:
Foreign Entity:
Effective Date:
Business Address:
CRD #:
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Firm Operations
Organization Affiliates (continued)
No
Yes
FIRM IS UNDER COMMON CONTROL WITH QUESTAR CAPITALCORPORATION
Description:
Investment AdvisoryActivities:
Securities Activities:
Yes
No
No
05/01/2008
5701 GOLDEN HILLS DRIVEMINNEAPOLIS, MN 55416
111925
ALLIANZ INVESTMENT MANAGEMENT LLC is under common control with the firm.
FIRM IS UNDER COMMON CONTROL WITH QUESTAR CAPITALCORPORATION
Description:
Investment AdvisoryActivities:
Securities Activities:
Country:
Foreign Entity:
Effective Date:
Business Address:
CRD #:
No
Yes
No
11/17/2005
5701 GOLDEN HILLS DRIVEMINNEAPOLIS, MN 55416
612
ALLIANZ LIFE FINANCIAL SERVICES, LLC is under common control with the firm.
FIRM IS UNDER COMMON CONTROL WITH QUESTAR CAPITALCORPORATION.
Description:
Investment AdvisoryActivities:
Securities Activities:
Country:
Foreign Entity:
Effective Date:
Business Address:
CRD #:
133358
QUESTAR ASSET MANAGEMENT, INC. is under common control with the firm.
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Firm Operations
Organization Affiliates (continued)
Yes
No
No
04/15/2004
5701 GOLDEN HILLS DRIVEMINNEAPOLIS, MN 55416
133358
FIRM IS UNDER COMMON CONTROL WITH QUESTAR CAPITALCORPORATION
Description:
Investment AdvisoryActivities:
Securities Activities:
Country:
Foreign Entity:
Effective Date:
Business Address:
CRD #:
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
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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 8 0
Arbitration N/A 1 N/A
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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.
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§ 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.
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or (2) an administrative panel in an action brought by a regulator that is contested by the partycharged with some alleged wrongdoing.
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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 8
Reporting Source: Regulator
Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITDISADVANTAGED CERTAIN RETIREMENT PLAN AND CHARITABLEORGANIZATION CUSTOMERS THAT WERE ELIGIBLE TO PURCHASE CLASSA SHARES IN CERTAIN MUTUAL FUNDS WITHOUT A FRONT-END SALESCHARGE. THE FINDINGS STATED THAT THESE ELIGIBLE CUSTOMERSWERE INSTEAD SOLD CLASS A SHARES WITH A FRONT-END SALESCHARGE OR CLASS B OR C SHARES WITH BACK-END SALES CHARGESAND HIGHER ONGOING FEES AND EXPENSES. THESE SALESDISADVANTAGED ELIGIBLE CUSTOMERS BY CAUSING SUCH CUSTOMERSTO PAY HIGHER FEES THAN THEY WERE ACTUALLY REQUIRED TO PAY.THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO REASONABLYSUPERVISE THE APPLICATION OF SALES-CHARGE WAIVERS TO ELIGIBLEMUTUAL FUND SALES. THE FIRM RELIED ON ITS FINANCIAL ADVISORS TODETERMINE THE APPLICABILITY OF SALES-CHARGE WAIVERS, BUT FAILEDTO MAINTAIN ADEQUATE WRITTEN POLICIES OR PROCEDURES TO ASSISTFINANCIAL ADVISORS IN MAKING THIS DETERMINATION. IN ADDITION, THEFIRM FAILED TO ADEQUATELY NOTIFY AND TRAIN ITS FINANCIALADVISORS REGARDING THE AVAILABILITY OF MUTUAL FUND SALES-CHARGE WAIVERS FOR ELIGIBLE CUSTOMERS. THE FIRM ALSO FAILED TOADOPT ADEQUATE CONTROLS TO DETECT INSTANCES IN WHICH THEY DIDNOT PROVIDE SALES-CHARGE WAIVERS TO ELIGIBLE CUSTOMERS INCONNECTION WITH THEIR MUTUAL FUND PURCHASES. AS A RESULT OFTHE FIRM'S FAILURE TO APPLY AVAILABLE SALES-CHARGE WAIVERS, THEFIRM ESTIMATES THAT ELIGIBLE CUSTOMERS WERE OVERCHARGED BYAPPROXIMATELY $686,334 FOR MUTUAL FUND PURCHASES MADE SINCEJULY 1, 2009.
Current Status: Final
23©2018 FINRA. All rights reserved. Report about QUESTAR CAPITAL CORPORATION
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Initiated By: FINRA
Principal Sanction(s)/ReliefSought:
Other
Other Sanction(s)/ReliefSought:
N/A
Date Initiated: 11/02/2017
Docket/Case Number: 2016049977801
Principal Product Type: Mutual Fund(s)
Other Product Type(s):
Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITDISADVANTAGED CERTAIN RETIREMENT PLAN AND CHARITABLEORGANIZATION CUSTOMERS THAT WERE ELIGIBLE TO PURCHASE CLASSA SHARES IN CERTAIN MUTUAL FUNDS WITHOUT A FRONT-END SALESCHARGE. THE FINDINGS STATED THAT THESE ELIGIBLE CUSTOMERSWERE INSTEAD SOLD CLASS A SHARES WITH A FRONT-END SALESCHARGE OR CLASS B OR C SHARES WITH BACK-END SALES CHARGESAND HIGHER ONGOING FEES AND EXPENSES. THESE SALESDISADVANTAGED ELIGIBLE CUSTOMERS BY CAUSING SUCH CUSTOMERSTO PAY HIGHER FEES THAN THEY WERE ACTUALLY REQUIRED TO PAY.THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO REASONABLYSUPERVISE THE APPLICATION OF SALES-CHARGE WAIVERS TO ELIGIBLEMUTUAL FUND SALES. THE FIRM RELIED ON ITS FINANCIAL ADVISORS TODETERMINE THE APPLICABILITY OF SALES-CHARGE WAIVERS, BUT FAILEDTO MAINTAIN ADEQUATE WRITTEN POLICIES OR PROCEDURES TO ASSISTFINANCIAL ADVISORS IN MAKING THIS DETERMINATION. IN ADDITION, THEFIRM FAILED TO ADEQUATELY NOTIFY AND TRAIN ITS FINANCIALADVISORS REGARDING THE AVAILABILITY OF MUTUAL FUND SALES-CHARGE WAIVERS FOR ELIGIBLE CUSTOMERS. THE FIRM ALSO FAILED TOADOPT ADEQUATE CONTROLS TO DETECT INSTANCES IN WHICH THEY DIDNOT PROVIDE SALES-CHARGE WAIVERS TO ELIGIBLE CUSTOMERS INCONNECTION WITH THEIR MUTUAL FUND PURCHASES. AS A RESULT OFTHE FIRM'S FAILURE TO APPLY AVAILABLE SALES-CHARGE WAIVERS, THEFIRM ESTIMATES THAT ELIGIBLE CUSTOMERS WERE OVERCHARGED BYAPPROXIMATELY $686,334 FOR MUTUAL FUND PURCHASES MADE SINCEJULY 1, 2009.
Resolution Date: 11/02/2017
Resolution:
Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?
No
Acceptance, Waiver & Consent(AWC)
24©2018 FINRA. All rights reserved. Report about QUESTAR CAPITAL CORPORATION
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Other Sanctions Ordered: INTEREST
Sanction Details: THE FIRM WAS CENSURED AND REQUIRED TO PROVIDE FINRA WITH AREMEDIATION PLAN TO REMEDIATE ELIGIBLE CUSTOMERS WHOQUALIFIED FOR, BUT DID NOT RECEIVE, THE APPLICABLE MUTUAL FUNDSALES-CHARGE WAIVER. AS PART OF THIS SETTLEMENT, THE FIRMAGREES TO PAY RESTITUTION TO ELIGIBLE CUSTOMERS, WHICH ISESTIMATED TO TOTAL $796,892 (THE AMOUNT ELIGIBLE CUSTOMERSWERE OVERCHARGED, INCLUSIVE OF INTEREST).
Regulator Statement IN RESOLVING THIS MATTER, FINRA HAS RECOGNIZED THEEXTRAORDINARY COOPERATION OF THE FIRM FOR HAVING: (1) INITIATEDAN INVESTIGATION TO IDENTIFY WHETHER ELIGIBLE CUSTOMERSRECEIVED SALES CHARGE WAIVERS DURING THE RELEVANT PERIOD; (2)VOLUNTARILY EXPANDED THE LOOK BACK PERIOD REQUESTED BY F1NRATO JULY 1, 2009, OR AN ADDITIONAL 18 MONTHS, RESULTING INADDITIONAL RESTITUTION TO CUSTOMERS OF APPROXIMATELY $325,000;(3) PROMPTLY ESTABLISHED A PLAN OF REMEDIATION FOR ELIGIBLECUSTOMERS WHO DID NOT RECEIVE APPROPRIATE SALES CHARGEWAIVERS; (4) PROMPTLY TAKEN ACTION AND REMEDIAL STEPS TOCORRECT THE VIOLATIVE CONDUCT; AND (5) EMPLOYED SUBSEQUENTCORRECTIVE MEASURES TO REVISE ITS PROCEDURES TO AVOIDRECURRENCE OF THE MISCONDUCT.
Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?
No
Sanctions Ordered: CensureDisgorgement/Restitution
iReporting Source: Firm
Allegations: FINRA ALLEGED THE FIRM VIOLATED NASD CONDUCT RULE 3010, FINRARULE 3110 AND FINRA RULE 2010 BETWEEN JULY 1, 2009 AND NOVEMBER1, 2016. DURING THIS TIME THE FIRM DISADVANTAGED CERTAINRETIREMENT PLAN AND CHARITABLE ORGANIZATION CUSTOMERS THATWERE ELIGIBLE TO PURCHASE CLASS A SHARES IN CERTAIN MUTUALFUNDS WITHOUT A FRONT-END SALES CHARGE. THE FIRM FAILED TOESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM AND PROCEDURESREASONABLY DESIGNED TO ENSURE THAT ELIGIBLE CUSTOMERS WHOPURCHASED MUTUAL FUND SHARES RECEIVED THE BENEFIT OFAPPLICABLE SALES CHARGE WAIVERS.
Current Status: Final
25©2018 FINRA. All rights reserved. Report about QUESTAR CAPITAL CORPORATION
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Initiated By: FINRA
Principal Sanction(s)/ReliefSought:
Other Sanction(s)/ReliefSought:
Date Initiated: 11/02/2017
Docket/Case Number: 2016049977801
Principal Product Type: Mutual Fund(s)
Other Product Type(s):
FINRA ALLEGED THE FIRM VIOLATED NASD CONDUCT RULE 3010, FINRARULE 3110 AND FINRA RULE 2010 BETWEEN JULY 1, 2009 AND NOVEMBER1, 2016. DURING THIS TIME THE FIRM DISADVANTAGED CERTAINRETIREMENT PLAN AND CHARITABLE ORGANIZATION CUSTOMERS THATWERE ELIGIBLE TO PURCHASE CLASS A SHARES IN CERTAIN MUTUALFUNDS WITHOUT A FRONT-END SALES CHARGE. THE FIRM FAILED TOESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM AND PROCEDURESREASONABLY DESIGNED TO ENSURE THAT ELIGIBLE CUSTOMERS WHOPURCHASED MUTUAL FUND SHARES RECEIVED THE BENEFIT OFAPPLICABLE SALES CHARGE WAIVERS.
Resolution Date: 11/02/2017
Resolution:
Other Sanctions Ordered: INTEREST
Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WASCENSURED AND REQUIRED TO PROVIDE FINRA WITH A REMEDIATIONPLAN TO REMEDIATE ELIGIBLE CUSTOMERS WHO QUALIFIED FOR, BUTDID NOT RECEIVE, THE APPLICABLE MUTUAL FUND SALES-CHARGEWAIVER. AS PART OF THIS SETTLEMENT, THE FIRM AGREES TO PAYRESTITUTION TO ELIGIBLE CUSTOMERS, WHICH IS ESTIMATED TO TOTAL$796,892 (THE AMOUNT ELIGIBLE CUSTOMERS WERE OVERCHARGED,INCLUSIVE OF INTEREST).
Firm Statement WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WASCENSURED AND REQUIRED TO PROVIDE FINRA WITH A REMEDIATIONPLAN TO REMEDIATE ELIGIBLE CUSTOMERS WHO QUALIFIED FOR, BUTDID NOT RECEIVE, THE APPLICABLE MUTUAL FUND SALES-CHARGEWAIVER. AS PART OF THIS SETTLEMENT, THE FIRM AGREES TO PAYRESTITUTION TO ELIGIBLE CUSTOMERS, WHICH IS ESTIMATED TO TOTAL$796,892 (THE AMOUNT ELIGIBLE CUSTOMERS WERE OVERCHARGED,INCLUSIVE OF INTEREST). IN RESOLVING THIS MATTER, FINRA HASRECOGNIZED THE EXTRAORDINARY COOPERATION OF THE FIRM FORHAVING: (1) INITIATED AN INVESTIGATION TO IDENTIFY WHETHER ELIGIBLECUSTOMERS RECEIVED SALES CHARGE WAIVERS DURING THE RELEVANTPERIOD; (2) VOLUNTARILY EXPANDED THE LOOK BACK PERIODREQUESTED BY F1NRA TO JULY 1, 2009, OR AN ADDITIONAL 18 MONTHS,RESULTING IN ADDITIONAL RESTITUTION TO CUSTOMERS OFAPPROXIMATELY $325,000; (3) PROMPTLY ESTABLISHED A PLAN OFREMEDIATION FOR ELIGIBLE CUSTOMERS WHO DID NOT RECEIVEAPPROPRIATE SALES CHARGE WAIVERS; (4) PROMPTLY TAKEN ACTIONAND REMEDIAL STEPS TO CORRECT THE VIOLATIVE CONDUCT; AND (5)EMPLOYED SUBSEQUENT CORRECTIVE MEASURES TO REVISE ITSPROCEDURES TO AVOID RECURRENCE OF THE MISCONDUCT.
Sanctions Ordered: CensureDisgorgement/Restitution
Acceptance, Waiver & Consent(AWC)
26©2018 FINRA. All rights reserved. Report about QUESTAR CAPITAL CORPORATION
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WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM WASCENSURED AND REQUIRED TO PROVIDE FINRA WITH A REMEDIATIONPLAN TO REMEDIATE ELIGIBLE CUSTOMERS WHO QUALIFIED FOR, BUTDID NOT RECEIVE, THE APPLICABLE MUTUAL FUND SALES-CHARGEWAIVER. AS PART OF THIS SETTLEMENT, THE FIRM AGREES TO PAYRESTITUTION TO ELIGIBLE CUSTOMERS, WHICH IS ESTIMATED TO TOTAL$796,892 (THE AMOUNT ELIGIBLE CUSTOMERS WERE OVERCHARGED,INCLUSIVE OF INTEREST). IN RESOLVING THIS MATTER, FINRA HASRECOGNIZED THE EXTRAORDINARY COOPERATION OF THE FIRM FORHAVING: (1) INITIATED AN INVESTIGATION TO IDENTIFY WHETHER ELIGIBLECUSTOMERS RECEIVED SALES CHARGE WAIVERS DURING THE RELEVANTPERIOD; (2) VOLUNTARILY EXPANDED THE LOOK BACK PERIODREQUESTED BY F1NRA TO JULY 1, 2009, OR AN ADDITIONAL 18 MONTHS,RESULTING IN ADDITIONAL RESTITUTION TO CUSTOMERS OFAPPROXIMATELY $325,000; (3) PROMPTLY ESTABLISHED A PLAN OFREMEDIATION FOR ELIGIBLE CUSTOMERS WHO DID NOT RECEIVEAPPROPRIATE SALES CHARGE WAIVERS; (4) PROMPTLY TAKEN ACTIONAND REMEDIAL STEPS TO CORRECT THE VIOLATIVE CONDUCT; AND (5)EMPLOYED SUBSEQUENT CORRECTIVE MEASURES TO REVISE ITSPROCEDURES TO AVOID RECURRENCE OF THE MISCONDUCT.
Disclosure 2 of 8
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Reporting Source: Regulator
Initiated By: FINRA
Date Initiated: 06/30/2017
Docket/Case Number: 2016051317701
Principal Product Type: No Product
Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOMAINTAIN A SIGNIFICANT NUMBER OF ELECTRONIC BROKERAGERECORDS, ESSENTIAL TO ITS BUSINESS, IN NON-ERASABLE AND NON-REWRITABLE FORMAT KNOWN AS THE "WRITE ONCE, READMANY" (WORM) FORMAT, THAT IS INTENDED TO PREVENT THE ALTERATIONOR DESTRUCTION OF BROKER-DEALER RECORDS STOREDELECTRONICALLY.THE FINDINGS STATED THAT THESE REQUIREMENTS ARE AN ESSENTIALPART OF THE INVESTOR PROTECTION FUNCTION BECAUSEPRESERVATION OF THESE RECORDS IS THE PRIMARY MEANS OFMONITORING COMPLIANCE WITH APPLICABLE SECURITIES LAWS,INCLUDING ANTIFRAUD PROVISIONS AND FINANCIAL RESPONSIBILITYSTANDARDS. THIS DEFICIENCY AFFECTED 18 CATEGORIES OFELECTRONIC RECORDS, INCLUDING RECORDS RELATING TO CUSTOMERACCOUNTS, FINANCIAL RECORDS, AND RECORDS RELATING TODISCIPLINARY ACTIONS AND ANTI-MONEY LAUNDERING COMPLIANCE.THE FINDINGS ALSO STATED THAT THE FIRM EXPERIENCED RELATEDAUDIT DEFICIENCIES THAT AFFECTED ITS ABILITY TO ADEQUATELY RETAINAND PRESERVE ELECTRONIC RECORDS. MAINLY, THE FIRM DID NOT HAVEAN AUDIT SYSTEM AS REQUIRED FOR THOSE RECORDS IT FAILED TOMAINTAIN IN WORM FORMAT.THE FINDINGS ALSO INCLUDED THAT THE FIRM FAILED TO ESTABLISH,MAINTAIN AND ENFORCE WRITTEN SUPERVISORY PROCEDURES (WSPS)REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLERECORD RETENTION REQUIREMENTS. THE FIRM' WSPS FAILED TOSPECIFY HOW IT WOULD SUPERVISE ITS COMPLIANCE WITH THE WORM-RELATED REQUIREMENTS.
Current Status: Final
27©2018 FINRA. All rights reserved. Report about QUESTAR CAPITAL CORPORATION
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Principal Sanction(s)/ReliefSought:
Other Sanction(s)/ReliefSought:
Principal Product Type: No Product
Other Product Type(s):
Resolution Date: 06/30/2017
Resolution:
Other Sanctions Ordered:
Sanction Details: THE FIRM WAS CENSURED AND FINED $150,000, JOINTLY AND SEVERALLY.
Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?
No
Sanctions Ordered: CensureMonetary/Fine $150,000.00
Acceptance, Waiver & Consent(AWC)
iReporting Source: Firm
Initiated By: FINRA
Date Initiated: 06/30/2017
Docket/Case Number: 2016051317701
Principal Product Type: No Product
Other Product Type(s):
Allegations: FINRA ALLEGED THAT THE FIRM VIOLATED SECTION 17(A) OF THEEXCHANGE ACT OF 1934, RULE 17A-4(F), NASD RULE 3110 AND FINRA RULE4511, BY FAILING TO MAINTAIN A SIGNIFICANT NUMBER OF ELECTRONICBROKERAGE RECORDS IN NON-ERASABLE AND NON-REWRITABLEFORMAT, KNOWN AS WORM FORMAT. FINRA ALSO ALLEGED THE FIRMEXPERIENCED RELATED AUDIT DEFICIENCIES AFFECTING THE ABILITY TOADEQUATELY RETAIN AND PRESERVE ELECTRONIC RECORDS AND FAILEDTO ENFORCE WRITTEN SUPERVISORY PROCEDURES REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE RECORDRETENTION REQUIREMENTS.
Current Status: Final
28©2018 FINRA. All rights reserved. Report about QUESTAR CAPITAL CORPORATION
www.finra.org/brokercheck User Guidance
Principal Sanction(s)/ReliefSought:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanction(s)/ReliefSought:
Other Product Type(s):
Resolution Date: 06/30/2017
Resolution:
Other Sanctions Ordered:
Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THROUGH A FINRALETTER OF ACCEPTANCE, WAIVER AND CONSENT ACCEPTED ON JUNE 30,2017, THE FIRM AGREED TO THE IMPOSITION OF A CENSURE AND $150,000FINE, JOINTLY AND SEVERALLY BETWEEN THE FIRM AND OUR AFFILIATEALLIANZ LIFE FINANCIAL SERVICES, LLC.
Firm Statement WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THROUGH A FINRALETTER OF ACCEPTANCE, WAIVER AND CONSENT ACCEPTED ON JUNE 30,2017, THE FIRM AGREED TO THE IMPOSITION OF A CENSURE AND $150,000FINE, JOINTLY AND SEVERALLY BETWEEN THE FIRM AND OUR AFFILIATEALLIANZ LIFE FINANCIAL SERVICES, LLC.
Sanctions Ordered: CensureMonetary/Fine $150,000.00
Acceptance, Waiver & Consent(AWC)
Disclosure 3 of 8
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Reporting Source: Regulator
Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOESTABLISH AND MAINTAIN ADEQUATE SUPERVISORY SYSTEMSREGARDING ITS USE OF CONSOLIDATED REPORTS AND REGARDING ITSREVIEW OF CERTAIN HOME OFFICE EMAIL CORRESPONDENCE. THEFINDINGS STATED THAT THE FIRM PERMITTED ITS REGISTEREDREPRESENTATIVES TO CREATE CONSOLIDATED REPORTS USING AVENDOR-PROVIDED SYSTEM THAT ALLOWED FOR MANUAL ENTRIES OFVARIOUS ASSETS HELD AWAY FROM THE FIRM. DURING THAT TIME, THEFIRM GENERATED 559,518 CONSOLIDATED REPORTS, OF WHICH NEARLY60,000 CONTAINED MANUAL ENTRIES. THE FIRM FAILED TO ENFORCE ITSWRITTEN SUPERVISORY PROCEDURE REQUIREMENT THAT BEFORE AREGISTERED REPRESENTATIVE COULD USE THE MANUAL-ENTRYFUNCTION, THE REPRESENTATIVE FIRST HAD TO COMPLETE TRAINING.MORE THAN HALF OF THE FIRM REGISTERED REPRESENTATIVES WHOGENERATED CONSOLIDATED REPORTS WITH MANUAL ENTRIES DID SOWITHOUT FIRST COMPLETING THE REQUIRED TRAINING. THE FIRM ALSOFELL SHORT OF ITS REQUIREMENT TO PERFORM A MANUAL ENTRY SPOTCHECK WHICH REQUIRED AUDITING 50 PERCENT OF THE REGISTEREDREPRESENTATIVES WHO CREATED CONSOLIDATED REPORTS WITHMANUAL ENTRIES EACH MONTH. THE MANUAL ENTRY SPOT CHECK,MOREOVER, WAS INADEQUATE. ALTHOUGH 50 PERCENT OF THEREGISTERED REPRESENTATIVES WHO CREATED MANUAL ENTRIES WERETO BE AUDITED EACH MONTH, THE FIRM'S WRITTEN PROCEDURES DIDNOT SPECIFY WHAT PORTION OF THOSE REPRESENTATIVES' ENTRIESWOULD BE REVIEWED AND DID NOT IDENTIFY ANY RISK-BASED CRITERIAFOR SELECTING WHICH REPRESENTATIVES' ENTRIES TO REVIEW. AS ARESULT, THE FIRM'S SUPERVISORY PROCEDURES WERE NOTREASONABLY DESIGNED TO ENSURE THAT CONSOLIDATED REPORTSWERE ACCURATE AND NOT MISLEADING. THE FINDINGS ALSO STATEDTHAT SOME EMAIL CORRESPONDENCE OF CERTAIN FIRM HOME OFFICEEMPLOYEES WAS NOT COPIED OR JOURNALED TO THE APPROPRIATESERVER FOR REVIEW OF EMAIL COMMUNICATIONS AT THE FIRM,RESULTING IN THOSE EMAILS NOT BEING SUBJECT TO SUPERVISORYREVIEW. THE FIRM WAS UNABLE TO DETERMINE EXACTLY HOW MANYEMAILS WERE NOT SUBJECTED TO SUPERVISORY REVIEW DURING APERIOD OF TIME.
Current Status: Final
29©2018 FINRA. All rights reserved. Report about QUESTAR CAPITAL CORPORATION
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Initiated By: FINRA
Principal Sanction(s)/ReliefSought:
Other Sanction(s)/ReliefSought:
Date Initiated: 11/09/2015
Docket/Case Number: 2013037301701
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 TOESTABLISH AND MAINTAIN ADEQUATE SUPERVISORY SYSTEMSREGARDING ITS USE OF CONSOLIDATED REPORTS AND REGARDING ITSREVIEW OF CERTAIN HOME OFFICE EMAIL CORRESPONDENCE. THEFINDINGS STATED THAT THE FIRM PERMITTED ITS REGISTEREDREPRESENTATIVES TO CREATE CONSOLIDATED REPORTS USING AVENDOR-PROVIDED SYSTEM THAT ALLOWED FOR MANUAL ENTRIES OFVARIOUS ASSETS HELD AWAY FROM THE FIRM. DURING THAT TIME, THEFIRM GENERATED 559,518 CONSOLIDATED REPORTS, OF WHICH NEARLY60,000 CONTAINED MANUAL ENTRIES. THE FIRM FAILED TO ENFORCE ITSWRITTEN SUPERVISORY PROCEDURE REQUIREMENT THAT BEFORE AREGISTERED REPRESENTATIVE COULD USE THE MANUAL-ENTRYFUNCTION, THE REPRESENTATIVE FIRST HAD TO COMPLETE TRAINING.MORE THAN HALF OF THE FIRM REGISTERED REPRESENTATIVES WHOGENERATED CONSOLIDATED REPORTS WITH MANUAL ENTRIES DID SOWITHOUT FIRST COMPLETING THE REQUIRED TRAINING. THE FIRM ALSOFELL SHORT OF ITS REQUIREMENT TO PERFORM A MANUAL ENTRY SPOTCHECK WHICH REQUIRED AUDITING 50 PERCENT OF THE REGISTEREDREPRESENTATIVES WHO CREATED CONSOLIDATED REPORTS WITHMANUAL ENTRIES EACH MONTH. THE MANUAL ENTRY SPOT CHECK,MOREOVER, WAS INADEQUATE. ALTHOUGH 50 PERCENT OF THEREGISTERED REPRESENTATIVES WHO CREATED MANUAL ENTRIES WERETO BE AUDITED EACH MONTH, THE FIRM'S WRITTEN PROCEDURES DIDNOT SPECIFY WHAT PORTION OF THOSE REPRESENTATIVES' ENTRIESWOULD BE REVIEWED AND DID NOT IDENTIFY ANY RISK-BASED CRITERIAFOR SELECTING WHICH REPRESENTATIVES' ENTRIES TO REVIEW. AS ARESULT, THE FIRM'S SUPERVISORY PROCEDURES WERE NOTREASONABLY DESIGNED TO ENSURE THAT CONSOLIDATED REPORTSWERE ACCURATE AND NOT MISLEADING. THE FINDINGS ALSO STATEDTHAT SOME EMAIL CORRESPONDENCE OF CERTAIN FIRM HOME OFFICEEMPLOYEES WAS NOT COPIED OR JOURNALED TO THE APPROPRIATESERVER FOR REVIEW OF EMAIL COMMUNICATIONS AT THE FIRM,RESULTING IN THOSE EMAILS NOT BEING SUBJECT TO SUPERVISORYREVIEW. THE FIRM WAS UNABLE TO DETERMINE EXACTLY HOW MANYEMAILS WERE NOT SUBJECTED TO SUPERVISORY REVIEW DURING APERIOD OF TIME.
Resolution Date: 11/09/2015
Resolution:
Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?
No
Acceptance, Waiver & Consent(AWC)
30©2018 FINRA. All rights reserved. Report about QUESTAR CAPITAL CORPORATION
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Other Sanctions Ordered:
Sanction Details: THE FIRM WAS CENSURED AND FINED $125,000. (ASSOCIATED CASE#2014038871401)FINE PAID IN FULL ON DECEMBER 28, 2015.
Sanctions Ordered: CensureMonetary/Fine $125,000.00
iReporting Source: Firm
Initiated By: FINRA
Principal Sanction(s)/ReliefSought:
Other Sanction(s)/ReliefSought:
Date Initiated: 11/09/2015
Docket/Case Number: 2013037301701 AND 2014038871401
Principal Product Type: No Product
Other Product Type(s):
Allegations: FINRA ALLEGED THAT THE FIRM VIOLATED NASD RULES 3010 AND 2110,AND FINRA RULE 2010, BY FAILING TO ESTABLISH AND MAINTAINADEQUATE SUPERVISORY SYSTEMS REGARDING THE USE OFCONSOLIDATED REPORTS AND THE REVIEW OF CERTAIN HOME OFFICEEMAIL CORRESPONDENCE.
Current Status: Final
Resolution Date: 11/09/2015
Resolution:
Other Sanctions Ordered:
Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THROUGH A FINRALETTER OF ACCEPTANCE, WAIVER AND CONSENT ACCEPTED ON NOV. 9,2015, THE FIRM AGREED TO THE IMPOSITION OF A $125,000 FINE AND ACENSURE.
Firm Statement WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THROUGH A FINRALETTER OF ACCEPTANCE, WAIVER AND CONSENT ACCEPTED ON NOV. 9,2015, THE FIRM AGREED TO THE IMPOSITION OF A $125,000 FINE AND ACENSURE.
Sanctions Ordered: CensureMonetary/Fine $125,000.00
Acceptance, Waiver & Consent(AWC)
31©2018 FINRA. All rights reserved. Report about QUESTAR CAPITAL CORPORATION
www.finra.org/brokercheck User Guidance
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THROUGH A FINRALETTER OF ACCEPTANCE, WAIVER AND CONSENT ACCEPTED ON NOV. 9,2015, THE FIRM AGREED TO THE IMPOSITION OF A $125,000 FINE AND ACENSURE.
Disclosure 4 of 8
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Reporting Source: Regulator
Initiated By: PENNSYLVANIA CONTACT: COUNSEL PAUL E. VON GEIS, JR. (412)-565-5083
Principal Sanction(s)/ReliefSought:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanction(s)/ReliefSought:
QUESTAR CAPITAL CORPORATION PAID A $200,000.00 ADMINISTRATIVEASSESSMENT AND $35,000.00 IN INVESTIGATIVE AND LEGAL COSTS.
Date Initiated: 01/20/2010
Docket/Case Number: 2009-04-02
URL for Regulatory Action:
Principal Product Type: Other
Other Product Type(s): ANNUITIES CONTRACTS AND REAL ESTATE INVESTMENT TRUSTS
Allegations: QUESTAR CAPITAL CORPORATION FAILED TO SUPERVISE AN AGENT WHOSOLD SHAM SECURITIES TO BOTH QUESTAR AND NON-QUESTAR CLIENTSAND USED THEIR MONEY ON HIS PERSONAL AND BUSINESS EXPENSES INVIOLATION OF THE PA SECURITIES ACT OF 1972.
Current Status: Final
Resolution Date: 01/20/2010
Resolution:
Other Sanctions Ordered:
Sanction Details: QUESTAR CAPITAL CORPORATION PAID A $200,000.00 ADMINISTRATIVEASSESSMENT AND $35,000.00 IN INVESTIGATIVE AND LEGAL COSTS.
Regulator Statement FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER ISSUED TOQUESTAR CAPITAL CORPORATION.
Sanctions Ordered: Monetary/Fine $200,000.00
Settled
iReporting Source: Firm
Allegations: ALLEGATIONS THAT QUESTAR CAPITAL CORPORATION VIOLATED CERTAINPROVISIONS OF THE PENNSYLVANIA SECURITIES ACT OF 1972, 70 P.S.SECTION 1-101, ET SEQ., (1972 ACT) IN CONNECTION WITH THE OFFERAND SALE OF SECURITIES IN THE COMMONWEALTH OF PENNSYLVANIA BYA REPRESENTATIVE OF QUESTAR THAT THE FIRM TERMINATED FORCAUSE. QUESTAR CAPITAL AGREES TO AN OFFER OF SETTLEMENT WITHTHE COMMISSION FOR THE PURPOSE OF SETTLING THIS PROCEEDINGAND CONSENTS TO THE COMMISSION MAKING FINDINGS ANDCONCLUSIONS AND IMPOSING SANCTIONS WITHOUT ADMITTING ORDENYING THE ALLEGATIONS.
Current Status: Final
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Initiated By: COMMONWEALTH OF PENNSYLVANIA, PENNSYLVANIA SECURITIESCOMMISSION
Principal Sanction(s)/ReliefSought:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanction(s)/ReliefSought:
Date Initiated: 12/29/2009
Docket/Case Number: 2009-04-02
Principal Product Type: No Product
Other Product Type(s):
ALLEGATIONS THAT QUESTAR CAPITAL CORPORATION VIOLATED CERTAINPROVISIONS OF THE PENNSYLVANIA SECURITIES ACT OF 1972, 70 P.S.SECTION 1-101, ET SEQ., (1972 ACT) IN CONNECTION WITH THE OFFERAND SALE OF SECURITIES IN THE COMMONWEALTH OF PENNSYLVANIA BYA REPRESENTATIVE OF QUESTAR THAT THE FIRM TERMINATED FORCAUSE. QUESTAR CAPITAL AGREES TO AN OFFER OF SETTLEMENT WITHTHE COMMISSION FOR THE PURPOSE OF SETTLING THIS PROCEEDINGAND CONSENTS TO THE COMMISSION MAKING FINDINGS ANDCONCLUSIONS AND IMPOSING SANCTIONS WITHOUT ADMITTING ORDENYING THE ALLEGATIONS.
Resolution Date: 01/21/2010
Resolution:
Other Sanctions Ordered:
Sanction Details: $200,000 ADMINISTRATIVE ASSESSMENT. $35,000 INVESTIGATIVE ANDLEGAL COST.
Firm Statement COMMONWEALTH OF PENNSYLVANIA, PENNSYLVANIA SECURITIESCOMMISSION FINED QUESTAR $235,000 AND ORDERED IT TO COMPLYWITH PENNSYLVANIA SECURITIES ACT, IN PARTICULAR SECTION 305.
Sanctions Ordered: Monetary/Fine $235,000.00
Order
Disclosure 5 of 8
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Reporting Source: Firm
Initiated By: COMMONWEALTH OF KENTUCKY, DEPARTMENT OF FINANCIALINSTITUTIONS
Allegations: FAILURE TO ADEQUATELY SUPERVISE THE ACTIVITIES OF A REGISTEREDREPRESENTATIVE AND PERMITTING A REGISTERED REPRESENTATIVE TOHOLD HIMSELF OUT AS A REGISTERED INVESTMENT ADVISERREPRESENTATIVE
Current Status: Final
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Initiated By: COMMONWEALTH OF KENTUCKY, DEPARTMENT OF FINANCIALINSTITUTIONS
Principal Sanction(s)/ReliefSought:
Other
Other Sanction(s)/ReliefSought:
SETTLEMENT AND ORDER
Date Initiated: 04/22/2009
Docket/Case Number: 2009-AH-025
Principal Product Type: No Product
Other Product Type(s):
Resolution Date: 04/28/2009
Resolution:
Other Sanctions Ordered:
Sanction Details: FINE OF $6,250.00 PAID ON 04/23/2009 AND ACCEPTED ON 04/28/2009 BYCOMMONWEALTH OF KENTUCKY, OFFICE OF FINANCIAL INSTITUTIONS
Firm Statement FINE OF $6,250.00 PAID ON 04/23/2009 AND ACCEPTED ON 04/28/2009 BYCOMMONWEALTH OF KENTUCKY, OFFICE OF FINANCIAL INSTITUTIONS
Sanctions Ordered: Monetary/Fine $6,250.00
Decision & Order of Offer of Settlement
Disclosure 6 of 8
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Reporting Source: Regulator
Initiated By: KENTUCKY OFFICE OF FINANCIAL INSTITUTIONS, DIVISION OF SECURITIES
Date Initiated: 09/28/2007
Docket/Case Number:
URL for Regulatory Action:
Principal Product Type: No Product
Other Product Type(s):
Allegations: AGENT THOMAS GORTER (CRD# 1008601)HELD HIMSELF OUT AS ANINVESTMENT ADVISER REPRESENTATIVE WHEN HE WAS NOT SOREGISTERED FOR APPROXIMATELY THREE (3) YEARS. QUESTAR CAPITALCORPORATION APPROVED ADVERTISING AND BUSINESS CARDS STATINGHE WAS AN IAR AND FAILED TO DETECT AND CORRECT THE SITUATION ATSEVERAL AUDITS.
Current Status: Final
34©2018 FINRA. All rights reserved. Report about QUESTAR CAPITAL CORPORATION
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Principal Sanction(s)/ReliefSought:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanction(s)/ReliefSought:
Other Product Type(s):
Resolution Date: 01/31/2008
Resolution:
Other Sanctions Ordered:
Sanction Details: FINE IN THE AMOUNT OF $54,668.53 WAS PAID ON 2/4/2008.
Regulator Statement QUESTAR CAPITAL CORPORATION DISCHARGED THOMAS GORTER (CRD #1008601) EFFECTIVE 1/25/2008.
Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?
No
Sanctions Ordered: Monetary/Fine $54,668.53
Decision & Order of Offer of Settlement
iReporting Source: Firm
Initiated By: KENTUCKY OFFICE OF FINANCIAL INSTITUTIONS, DIVISION OF SECURITIES
Principal Sanction(s)/ReliefSought:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanction(s)/ReliefSought:
Date Initiated: 09/28/2007
Docket/Case Number: 2008-AH-008
Principal Product Type: No Product
Other Product Type(s):
Allegations: AGENT THOMAS GORTER (CRD# 1008601) HELD HIMSELF OUT AS ANINVESTMENT ADVISER REPRESENTATIVE WHEN HE WAS NOT SOREGISTERED FOR APPROXIMATELY THREE (3) YEARS. QUESTAR CAPITALCORPORATION APPROVED ADVERTISING AND BUSINESS CARDS STATINGHE WAS AN IAR AND FAILED TO DETECT AND CORRECT THE SITUATION ATSEVERAL AUDITS.
Current Status: Final
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Other Sanction(s)/ReliefSought:
Resolution Date: 02/04/2008
Resolution:
Other Sanctions Ordered:
Sanction Details: FINE IN THE AMOUNT OF $54,668.53 WAS PAID ON 02/04/2008.
Firm Statement QUESTAR CAPITAL CORPORATION DISCHARGED THOMAS GORTER (CRD#1008601) EFFECTIVE 01/25/2008.
Sanctions Ordered: Monetary/Fine $54,668.53
Decision & Order of Offer of Settlement
Disclosure 7 of 8
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Reporting Source: Regulator
Initiated By: CONNECTICUT
Date Initiated: 07/23/2007
Docket/Case Number: CO-07-7159-S
URL for Regulatory Action:
Allegations: ON JULY 23, 2007, THE BANKING COMMISSIONER ENTERED A CONSENTORDER (NO. CO-07-7159-S) WITH RESPECT TO TOWER SQUARESECURITIES, INC. ("TSSI"), USALLIANZ SECURITIES, INC. ("USAS"); ANDADVANTAGE CAPITAL CORPORATION ("ACC"). IN DECEMBER, 2006, USASMERGED WITH AND ASSUMED THE NAME OF QUESTAR CAPITALCORPORATION, A CONNECTICUT-REGISTERED BROKER-DEALER ANDAFFILIATE OF USAS. THE CONSENT ORDER ALLEGED THAT, AT VARIOUSTIMES FROM 1994 THROUGH 2005, THE FIRMS ENGAGED DAVID M.FAUBERT (CRD NUMBER 2150188) ("FAUBERT") AS A BROKER-DEALERAGENT; THAT THE FIRMS FAILED TO DISCOVER THAT FAUBERT HAD BEENPREPARING FRAUDULENT MONTHLY STATEMENTS THAT IMPROPERLYINFLATED THE VALUE OF CLIENT HOLDINGS AND HAD BEEN FORWARDINGTHOSE STATEMENTS TO CLIENTS; THAT FAUBERT WAS DEPOSITINGCLIENT FUNDS INTO THE ACCOUNT OF FAUBERT FINANCIAL GROUP, INC.AND MISAPPROPRIATING THOSE FUNDS FOR HIS PERSONAL USE; ANDTHAT THE FIRMS, AS A RESULT, HAD FAILED TO ESTABLISH, ENFORCE ANDMAINTAIN AN ADEQUATE SUPERVISORY SYSTEM. ON MAY 3, 2007,FAUBERT HAD BEEN SENTENCED IN NEW HAVEN FEDERAL COURT TO 7YEARS IN PRISON FOR STEALING CLIENT FUNDS. FAUBERT'S BROKER-DEALER AGENT REGISTRATION HAD BEEN REVOKED BY THECOMMISSIONER ON MAY 19, 2005 (DOCKET NO. SS-2005-7159-S).
Current Status: Final
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Principal Sanction(s)/ReliefSought:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanction(s)/ReliefSought:
IMPORTANT NOTE: AGAINST MERGER PARTNER/PREDECESSOR.SEE DESCRIPTION BELOW.
URL for Regulatory Action:
Principal Product Type: No Product
Other Product Type(s):
Resolution Date: 07/23/2007
Resolution:
Other Sanctions Ordered: THE CONSENT ORDER IMPOSED FINES OF $300,000 AGAINST TSSI, $75,000AGAINST USAS AND $25,000 AGAINST ACC. THE CONSENT ORDER ALSODIRECTED THE FIRMS TO CONDUCT BRANCH OFFICE AUDITS WITHIN 24MONTHS FOLLOWING THE ENTRY OF THE CONSENT ORDER AND REPORTTHEIR FINDINGS TO THE AGENCY.
Sanction Details: SEE RESPONSE TO ITEM 13.B.
Regulator Statement IN FURTHERANCE OF THEIR DESIRE TO RESOLVE THE MATTERINFORMALLY WITH THE DEPARTMENT, THE FIRMS REPRESENTED TO THECOMMISSIONER THAT THEY HAD EITHER MONETARILY SETTLED THECLAIMS OF AFFECTED INVESTORS OR OFFERED RESTITUTION OF THENET LOSSES ALLEGEDLY INCURRED. INVESTOR LOSSES IN THE MATTERWERE ESTIMATED TO EXCEED $5 MILLION.
Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?
No
Sanctions Ordered: Monetary/Fine $75,000.00
Consent
iReporting Source: Firm
Allegations: ON JULY 23, 2007, THE BANKING COMMISSIONER ENTERED A CONSENTORDER (NO. CO-07-7159-S) WITH RESPECT TO TOWER SQUARESECURITIES, INC. ("TSSI"), USALLIANZ SECURITIES, INC. ("USAS"); ANDADVANTAGE CAPITAL CORPORATION ("ACC"). IN DECEMBER, 2006, USASMERGED WITH AND ASSUMED THE NAME OF QUESTAR CAPITALCORPORATION, A CONNECTICUT-REGISTERED BROKER-DEALER ANDAFFILIATE OF USAS. THE CONSENT ORDER ALLEGED THAT, AT VARIOUSTIMES FROM 1994 THROUGH 2005, THE FIRMS ENGAGED DAVID MFAUBERT (CRD NUMBER 2150188) ("FAUBERT") AS A BROKER-DEALERAGENT; THAT THE FIRMS FAILED TO DISCOVER THAT FAUBERT HAD BEENPREPARING FRAUDULENT MONTHLY STATEMENTS THAT IMPROPERLYINFLATED THE VALUE OF CLIENT HOLDINGS AND HAD BEEN FORWARDINGTHOSE STATEMENTS TO CLIENTS; THAT FAUBERT WAS DEPOSITINGCLIENT FUNDS INTO THE ACCOUNT OF FAUBERT FINANCIAL GROUP, INC.AND MISAPPROPRIATING THOSE FUNDS FOR HIS PERSONAL USE; ANDTHAT THE FIRMS, AS A RESULT, HAD FAILED TO ESTABLISH, ENFORCE ANDMAINTAIN AN ADEQUATE SUPERVISORY SYSTEM, ON MAY 3, 2007,FAUBERT HAD BEEN SENTENCED IN NEW HAVEN FEDERAL COURT TO 7YEARS IN PRISON FOR STEALING CLIENT FUNDS. FAUBERT'S BROKER-DEALER AGENT REGISTRATION HAD BEEN REVOKED BY THECOMMISSIONER ON MAY 19, 2005 (DOCKET NO. SS-2005-7159-S).
Current Status: Final
37©2018 FINRA. All rights reserved. Report about QUESTAR CAPITAL CORPORATION
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Initiated By: CONNECTICUT
Principal Sanction(s)/ReliefSought:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanction(s)/ReliefSought:
IMPORTANT NOTE: AGAINST MERGER PARTNER/PREDECESSOR. SEEDESCRIPTION BELOW.
Date Initiated: 07/23/2007
Docket/Case Number: CO-07-7159-S
Principal Product Type: No Product
Other Product Type(s):
ON JULY 23, 2007, THE BANKING COMMISSIONER ENTERED A CONSENTORDER (NO. CO-07-7159-S) WITH RESPECT TO TOWER SQUARESECURITIES, INC. ("TSSI"), USALLIANZ SECURITIES, INC. ("USAS"); ANDADVANTAGE CAPITAL CORPORATION ("ACC"). IN DECEMBER, 2006, USASMERGED WITH AND ASSUMED THE NAME OF QUESTAR CAPITALCORPORATION, A CONNECTICUT-REGISTERED BROKER-DEALER ANDAFFILIATE OF USAS. THE CONSENT ORDER ALLEGED THAT, AT VARIOUSTIMES FROM 1994 THROUGH 2005, THE FIRMS ENGAGED DAVID MFAUBERT (CRD NUMBER 2150188) ("FAUBERT") AS A BROKER-DEALERAGENT; THAT THE FIRMS FAILED TO DISCOVER THAT FAUBERT HAD BEENPREPARING FRAUDULENT MONTHLY STATEMENTS THAT IMPROPERLYINFLATED THE VALUE OF CLIENT HOLDINGS AND HAD BEEN FORWARDINGTHOSE STATEMENTS TO CLIENTS; THAT FAUBERT WAS DEPOSITINGCLIENT FUNDS INTO THE ACCOUNT OF FAUBERT FINANCIAL GROUP, INC.AND MISAPPROPRIATING THOSE FUNDS FOR HIS PERSONAL USE; ANDTHAT THE FIRMS, AS A RESULT, HAD FAILED TO ESTABLISH, ENFORCE ANDMAINTAIN AN ADEQUATE SUPERVISORY SYSTEM, ON MAY 3, 2007,FAUBERT HAD BEEN SENTENCED IN NEW HAVEN FEDERAL COURT TO 7YEARS IN PRISON FOR STEALING CLIENT FUNDS. FAUBERT'S BROKER-DEALER AGENT REGISTRATION HAD BEEN REVOKED BY THECOMMISSIONER ON MAY 19, 2005 (DOCKET NO. SS-2005-7159-S).
Resolution Date: 07/23/2007
Resolution:
Other Sanctions Ordered: THE CONSENT ORDER IMPOSED FINES OF $300,000 AGAINST TSSI, $75,000AGAINST USAS AND $25,000 AGAINST ACC. THE CONSENT ORDER ALSODIRECTED THE FIRMS TO CONDUCT BRANCH OFFICE AUDITS WITHIN 24MONTHS FOLLOWING THE ENTRY OF THE CONSENT ORDER AND REPORTTHEIR FINDINGS TO THE AGENCY.
Sanction Details: AS STATED ABOVE, THE CONSENT ORDER IMPOSED FINES OF $300,000AGAINST TSSI, $75,000 AGAINST USAS AND $25,000 AGAINST ACC. THECONSENT ORDER ALSO DIRECTED THE FIRMS TO CONDUCT BRANCHOFFICE AUDITS WITHIN 24 MONTHS FOLLOWING THE ENTRY OF THECONSENT ORDER AND REPORT THEIR FINDINGS TO THE AGENCY.
Firm Statement IN FURTHERANCE OF THEIR DESIRE TO RESOLVE THE MATTERINFORMALLY WITH THE DEPARTMENT, THE FIRMS REPRESENTED TO THECOMMISSIONER THAT THEY HAD EITHER MONETARILY SETTLED THECLAIMS OF AFFECTED INVESTORS OR OFFERED RESTITUTION OF THENET LOSSES ALLEGEDLY INCURRED. INVESTOR LOSSES IN THE MATTERWERE ESTIMATED TO EXCEED $5 MILLION.
Sanctions Ordered: Monetary/Fine $75,000.00
Consent
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Firm Statement IN FURTHERANCE OF THEIR DESIRE TO RESOLVE THE MATTERINFORMALLY WITH THE DEPARTMENT, THE FIRMS REPRESENTED TO THECOMMISSIONER THAT THEY HAD EITHER MONETARILY SETTLED THECLAIMS OF AFFECTED INVESTORS OR OFFERED RESTITUTION OF THENET LOSSES ALLEGEDLY INCURRED. INVESTOR LOSSES IN THE MATTERWERE ESTIMATED TO EXCEED $5 MILLION.
Disclosure 8 of 8
i
Reporting Source: Regulator
Initiated By: NASD
Principal Sanction(s)/ReliefSought:
Other Sanction(s)/ReliefSought:
Date Initiated: 06/19/2007
Docket/Case Number: 2005002134702
Principal Product Type: No Product
Other Product Type(s):
Allegations: NASD RULES 2110, 3010 AND 6230(A): THE FIRM FAILED TO REPORT TOTRACE 132 TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES EXECUTEDON A BUSINESS DAY DURING TRACE SYSTEM HOURS WITHIN 15 MINUTESOF THE TIME OF EXECUTION. THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIES LAWS,REGULATIONS AND NASD RULES.
Current Status: Final
Resolution Date: 06/19/2007
Resolution:
Other Sanctions Ordered: UNDERTAKING
Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE THE FIRM IS CENSURED, FINED $12,500 AND REQUIRED TOREVISE ITS WRITTEN SUPERVISORY PROCEDURES CONCERNING TRACEREPORTING.
Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?
No
Sanctions Ordered: CensureMonetary/Fine $12,500.00
Acceptance, Waiver & Consent(AWC)
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Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE THE FIRM IS CENSURED, FINED $12,500 AND REQUIRED TOREVISE ITS WRITTEN SUPERVISORY PROCEDURES CONCERNING TRACEREPORTING.
iReporting Source: Firm
Initiated By: NASD
Principal Sanction(s)/ReliefSought:
Other Sanction(s)/ReliefSought:
Date Initiated: 06/19/2007
Docket/Case Number: 20050021347-02
Principal Product Type: No Product
Other Product Type(s):
Allegations: NASD RULES 2110, 3010 AND 6230(A): THE FIRM FAILED TO REPORT TOTRACE 132 TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES EXECUTEDON A BUSINESS DAY DURING TRACE SYSTEM HOURS WITHIN 15 MINUTESOF THE TIME OF EXECUTION. THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIES LAWS,REGULATIONS AND NASD RULES.
Current Status: Final
Resolution Date: 06/19/2007
Resolution:
Other Sanctions Ordered: UNDERTAKING
Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE THE FIRM IS CENSURED, FINED $12,500.00 AND REQUIRED TOREVISE ITS WRITTEN SUPERVISORY PROCEDURES CONCERNING TRACEREPORTING.
Firm Statement AS STATED ABOVE, THE FIRM CONSENTED TO THE DESCRIBEDSANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE THE FIRM ISCENSURED, FINED $12,500.00 AND REQUIRED TO REVISE ITS WRITTENSUPERVISORY PROCEDURES CONCERNING TRACE REPORTING.
Sanctions Ordered: CensureMonetary/Fine $12,500.00
Acceptance, Waiver & Consent(AWC)
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Firm Statement AS STATED ABOVE, THE FIRM CONSENTED TO THE DESCRIBEDSANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE THE FIRM ISCENSURED, FINED $12,500.00 AND REQUIRED TO REVISE ITS WRITTENSUPERVISORY PROCEDURES CONCERNING TRACE REPORTING.
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Arbitration Award - Award / Judgment
Brokerage firms are not required to report arbitration claims filed against them by customers; however, BrokerCheckprovides summary information regarding FINRA arbitration awards involving securities and commodities disputesbetween public customers and registered securities firms in this section of the report. The full text of arbitration awards issued by FINRA is available at www.finra.org/awardsonline.
Disclosure 1 of 1
Reporting Source: Regulator
Type of Event: ARBITRATION
Arbitration Forum:
Case Initiated:
Case Number:
Allegations:
Disputed Product Type:
Sum of All Relief Requested:
Disposition:
Disposition Date:
Sum of All Relief Awarded:
FINRA
08/23/2013
13-02409
ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-FAILURETO SUPERVISE; ACCOUNT RELATED-NEGLIGENCE
REAL ESTATE INVESTMENT TRUST
$150,000.00
AWARD AGAINST PARTY
03/01/2016
$134,533.29
There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.
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